Tuesday, October 12, 2010

What Can Baseball Teach Us About the Return on Investment (ROI) of Disease Management? Nothing, Actually.

Growing up in New York City and then living outside of Philadelphia, you’d think that the Disease Management Care Blog would have a better appreciation for major league baseball. It likes the stadium spectacle (and food), but league standings, box scores, individual player statistics and television game play is as soporific to the DMCB as looking at the aortic valve “Mercedes Benz” sign on an echocardiogram. Try as it might DMCB cannot understand what gets baseball fans and cardiologists so atwitter.

Maybe it's because the DMCB thinks because baseball is so linear. The entire game consists of a series of singular events involving individual players surrounding one ball occurring over the time dimension of nine innings. Sure, there are other moving parts, enormous talent and high drama and but the game has a compelling degree of compact simplicity.

To each their own, says the DMCB, which is one reason why it tried to compact the moving parts, talent and financial drama of disease management (DM) into a (curvi)linear display. This is an admittedly very simplistic and not-drawn-to-scale graph of what financially happens to the return on investment in an ideally executed one-year DM contract:

The black line represents the typical accumulated savings of a well run disease management program over time. Thanks to the use of health risk assessments and predictive modeling, the patients that initially get recruited in the program are those that are a) most vulnerable and b) most amenable to care management coaching and outreach. They’re “rescued” from unnecessarily visiting emergency rooms and being unnecessarily admitted to the hospital. Note that savings grow rapidly. With time, additional patients at lower risk are recruited, but since they’re at less risk, the savings curve begins to flatten out. As more patients get recruited, it’s possible that savings can erode, because the low risk/low utilizing patients can ironically be prompted to seek out additional care services.

The red line represents the cost of the disease management program over time. Initially, there are steep and fixed start-up costs which then slow down over time but never flatten. As additional patients get recruited, more personnel and infrastructure are required for coaching and follow-up. If the program pursues each and every additional patient with multiple attempts at outreach, costs can accelerate.

The small yellow area displays when the savings exceed the cost. That means the "return on investment" (ROI) is positive. That doesn’t happen early in the program and it doesn’t happen late: it's in the middle. Early and late in the program, there are losses. Also note that the ROI is a moving target that changes that as more patients get recruited. This also explains why a positive ROI can be achieved when far less than 100% of patients are engaged in DM.

Of course, this is very rudimentary and doesn't take into account the moving parts of the baseline utilization patterns, the enormous talent of the nurse-coaches and the high drama of how costs and savings are actually calculated.

Every baseball game is arguably unique, but DM is far more complicated. It's sort of like baseball, but all the players have bats, there are 100 balls, pucks and Frisbees in play and the bases move as the game goes on. That's one of the reasons it's so much fun.

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