Monitoring Program Performance


In the modern days of limited healthcare resources and decreased insurance reimbursements, it is not only helpful for healthcare organizations to analyze how new programs affect them economically, but also very useful to monitor the economic outcome of existing healthcare programs or treatments.

I was asked to analyze an existing disease management program by a large healthcare organization. They had developed a disease management program for COPD and wished to know if it was economically sound to continue this program.

I concluded that the most thorough way to evaluate this program was to use a Cost Effectiveness Markov Model. These models are excellent for looking at chronic on going conditions such as COPD. Differing from ROI calculations, this modeling allows values to be placed on outcomes as well as process, not just on dollars in and dollars out. For this study, there were three possible disease states: Stable, somewhat sick and visiting urgent care, very sick and requiring hospitalization.

We were able to calculate not only costs associated with each state but also the quality of life as expressed in quality adjusted life years (QALY). The program was analyzed using incremental cost effectiveness ratio (ICER).

The conclusion was that the program was successful by a significant amount, and furthermore that the savings was due to significant cost decrease in hospitalization of COPD patients involved in the program. Thus CEA can not only evaluate existing programs, but guide us into how those programs prove their effectiveness. CEA is starting to show its increased versatility in the modern healthcare economic environment.    

If your objective is to provide the best decision-making for your organization and take a global view of your business, expanding your sights beyond ROI, and educating other decision-makers, Cost Effectiveness Analysis can make your organization more competitive and more profitable.