Is $1 Billion a Good Investment for Disease Management? We May Finally Have an Answer

Take two of these and call for
savings in the morning

Anyone familiar with the history of disease management industry will almost certainly can recall Soeren Mattke's 2007 article that provocatively asked Evidence for the Effect of Disease Management: Is $1 Billion a Year a Good Investment? Based on what was known in the peer reviewed literature at that time, Dr. Mattke's answer was a desultory "uncertain," and he recommended that buyers of disease management services approach the industry's vendors with "skepticism."

Well, it took him seven years, but Dr. Mattke has finally agreed with the Disease Management Care Blog that investment in disease management can be good.  Writing in the January 2014 issue of Health Affairs, Dr. Mattke and other colleagues from RAND look at the impact of disease management involving thousands of employees at PepsiCo.

In 2003, Pepsi started an employee health program that included risk assessments, on-site wellness events, lifestyle management, disease management, complex care management, telephone nurse advice lines, and maternity management. By 2011, there were 5 telephonic lifestyle programs (weight management, nutrition management, fitness, stress management and tobacco cessation) and 10 telephonic chronic disease management programs (asthma, coronary artery disease, atrial fibrillation, congestive heart failure, stroke, hyperlipidemia, hypertension, diabetes, low back pain, and chronic obstructive pulmonary disease).

Of the greater than 67,000 Pepsi employee participants, 2,610, 17,432 and 2,162 persons with an average 6.4 years of participation in disease management, lifestyle management and both, respectively, were matched, using propensity scoring, to Pepsi non-participants. The two groups' insurance claims expense and absenteeism were compared.

Overall, all the participants had an average of $360 per member per year (PMPY) less cost compared to the non-participants. The participants' vs. the non participants' cost curves diverged and became statistically significant after 3 years

However, it turned out that the savings was confined to the disease management population, which had a lower cost of $1632 PMPY.  Participants in the lifestyle management had negligible savings.  Disease management had a return on investment of $3.78

Participants in both disease management and lifestyle programs had a savings of $1,920 per year.

Despite the lack of any impact on claims expense, lifestyle management was associated with a reduction in self-reported absenteeism of .13 days per year.  In contrast, disease management had no impact on absenteeism.

The DMCB's take:

This builds on the evidence (like this and this) that later generation, remotely based telephonic disease management can reduce claims expense.  $360 PMPY for $67,000 employees translates to more than $24 million in savings per year for Pepsi. Even if the company spent millions on its health programs, the impact is something that both the employees and shareholders can be happy about.

As skeptics continue to wonder at the continuing commercial success of the disease management (now called "population health") industry, the DMCB reminds them that many other companies like Pepsi are also looking at their return on investment. They undoubtedly like what they see, but unlike Pepsi, are not taking the time or effort to publish their results.  Pepsi, in the meantime, deserves kudos for their commitment to the science of population health.

That being said, this is a company sponsored disease management program that is limited to employees and dependents.  The DMCB is less certain about the impact of these programs in typical "free range" commercial or government insurance settings.

The study isn't perfect, because there could be hidden biases.  As the authors point out, even propensity matching can't guarantee that the two populations were truly similar; since participation was voluntary, it's possible that the participants were more health conscious and that characteristic - not the disease management - is what's responsible for the observed savings.