Paper Suggests Method to Gauge Health Management Program Returns

August 15, 2006 ( - As employers begin to pour more and more into health management programs in a long-term effort to curb heath care costs, they are eager to see if their efforts are making a dent.

An article in the July/August 2006 issue of American Journal of Health Promotion sheds some light on how employers might gauge the economic returns on their investments by giving guidelines for measuring heath and productivity management program efficiency.

A recent Mercer survey of more than 600 for-profit and nonprofit US employers found that 19% of respondents with 5,000 or more employees offer a comprehensive health management program with employee outreach, reinforced by a corporate culture that supports a healthy lifestyle, according to the article.

The costs of such programs vary along with their comprehensiveness; among all surveyed employers who provide at least one type of health management program (HMP), the median total annual budget for the program was $25,000; among those with 5,000 or more employees, it was $200,000.

Seth Serxner, Kristin Baker and Daniel Gold – the authors of the article and Mercer Health & Benefits consultants – suggest ways to improve upon the two most common approaches to evaluating health management programs: the population-level model and the individual-level model, amd offer new ways to measure the impact of initiatives.

The authors suggest employers shift from a cost-based evaluation method to an evaluation that looks at services used by the plan participants, such as inpatient admissions, outpatient visits, emergency department visits, professional services visits and prescription drug use. The reason offered is because utilization of services is more directly related to program impact than are health costs.

The guidelines laid out in the article now being tested by the RAND Corporation using data from a Mercer client, and the final results of the RAND analysis are expected before the end of 2006.

The paper can be purchased here .