How to maximize your 'return on investment'
January 1, 1997
How to maximize your return on investment’
Maximize achievement of defined health objectives
By John B. Doyle, PhD
Principle
Doyle Consulting
Boulder, CO
Disease state management programs should be designed to achieve objectives. More specifically, they should be designed to maximize health return on investment (ROI), to maximize achievement of the program’s defined health objectives given the amount of money to be invested in the program. Successful programs focus on specific opportunities to enhance health ROI.
Once overall program objectives have been set, the program design can be guided by an explicit attempt to maximize health ROI. The following five steps are suggested as a guide to the development of an outcomes-driven disease management program:
• Step one.
Define a targeted financial investment, or budget, for the program. In disease management, as in any other endeavor, a multitude of factors can influence the budgeting process, including discretionary dollars available, expected return on investment, and politics. A budget sets limits; it is the responsibility of the program designers and manager to maximize outcomes within those limits.
• Step two.
Identify high-leverage opportunities for achieving program objectives. Every disease has specific cost drivers, or high-leverage areas of intervention in the disease process that will generate the greatest cost savings. There also are health drivers, which can produce the greatest impact on health outcomes. Designers of disease management programs should focus on those stages in the disease sequence and in the continuum of care that afford the greatest opportunities for improving high-priority health outcomes.
• Step three.
Identify candidate best practices to use as interventions at leverage points. Disease management programs consist of components; components are made up of specific area practices, or interventions. An outcomes-driven approach to program design ideally relies heavily on evidence-based best practices.1 Effective programs are built on practices and/or interventions that have been shown, by means of outcomes research, to achieve the program’s high-priority objectives.
For example, clinical research indicates that, of the products currently on the market, inhaled corticosteroids or cromolyn sodium are the pharmaceuticals of choice for patients with moderate to severe asthma.2 An asthma management program should encourage appropriate prescribing and patient compliance consistent with that evidence-based best practice.
• Step four.
Define effective tactics for implementing the selected best practices.
• Step five.
Evaluate pro forma health ROI, or the likely impact vs. cost of implementing selected best practices. From a design perspective, not every best practice/intervention is "best" in terms of maximizing management’s health ROI. Program designers must establish a pro forma impact assessment for each best practice considered for incorporation in the disease management program. The pro forma should include the following:
an estimate of the expected health outcomes of each practice/intervention;
the strength of the evidence supporting the outcomes estimate;
the expected cost of implementing the practice/intervention.
The evidenced-based approach to best practices sets the upper limit on what can reasonably be expected in terms of health ROI from the disease management program.
New programs should be designed from the ground up using an explicit orientation to health return on investment. Where design options exist, components with a known higher health ROI should be chosen. In many cases, subjective data may need to be used in making those decisions in first-generation disease management programs. Existing programs should be audited periodically to ensure that each component is cost-justifiable in terms of impact on health objectives.
Here is a case that illustrates the steps outlined above:
Using agreed-on objectives, the planning team for a hospital’s osteoarthritis disease management program identified high leverage in these three aspects of care:
1. Opportunities for reducing cost of care:
Reduce the length of stay for joint replacement surgery.
Maximize prescribing of more cost-effective pain medications.
Replace physical therapy services with self-care where appropriate.
2. Opportunities for reducing joint pain:
Maximize self-care in the appropriate use of heat, cold, and exercise for managing pain.
Offer joint replacement to all appropriate candidates.
Maximize patient compliance with pain medication protocols.
3. Opportunities for increasing employability:
Reduce joint pain.
Adapt the workplace for accessibility to and prevention of arthritis-related physical limitations.
Increase job satisfaction of people with osteoarthritis.
Upon further review, the team decided to focus its initial disease management efforts on the high-leverage area of joint pain management. Pain reduction is a program goal in its own right, and it contributes significantly to the employability goal. Further, the team felt that more consistent use of conservative pain management techniques, coupled with a joint replacement appropriateness guideline, would result in reduction in the overall costs for the osteoarthritis population.
The team next convened task forces to evaluate the published literature and come to consensus regarding possible best practices and their expected impact on health ROI. Based on the literature review, four specific program interventions were selected for development. The four interventions and their pro forma impact assessments are summarized in the osteoarthritis assessment table. (See table, above.)
The task force noted that the cost savings associated with the joint replacement guidelines could be realized only if the patient compliance intervention and the self-care pain management intervention were successfully installed. Most of the implementation costs would be incurred in the first year, whereas savings in cost of care and enhanced health outcomes would continue. Because expected costs were within predetermined budget limits, and because the pro forma health ROI promised an acceptable "bang for the buck," top management authorized the planning team to move into the implementation phase of program development.
[Editor’s note: This column was excerpted with permission from Disease Management: A Systems Approach to Improving Patient Outcomes, published by American Hospital Publishing, copyright 1997. All rights reserved. To order a copy of the book, contact: American Hospital Publishing, 737 North Michigan Ave., Suite 700, Chicago, IL 60611-2615. Telephone: (800) 242-2626. The ISBN number is 1-556648-168-3. The item number is 067103. The AHA member price is $69; for nonmembers, the price is $95.
John Doyle may be reached at: Doyle Consulting, 5695 Aurora Place, Boulder, CO 80303. Telephone: (303) 499-1812. Fax: (303) 499-1910.]
References
1. Eddy DM. A Manual for Assessing Health Practices and Designing Practice Policies: The Explicit Approach. Philadelphia: American College of Physicians; 1992.
2. National Asthma Education Program. Guidelines for the Diagnosis and Management of Asthma. National Institutes of Health Publication 91-3042. U.S. Department of Health and Human Services, Bethesda, MD; 1991.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content