Impact of 2 Employer-Sponsored Population Health Management Programs on Medical Care Cost and Utilization

BACKGROUND: Integrated health management programs combining disease prevention and disease management services, although popular with employers, have been insufficiently researched with respect to their effect on costs. OBJECTIVE: To estimate the overall impact of a population health management program and its components on cost and utilization. STUDY DESIGN, SETTING, AND PARTICIPANTS: Observational study of 2 employer-sponsored health management programs involving more than 200,000 health plan members. METHODS: The authors used claims data for the first program year and the 2 preceding years to calculate cost and utilization metrics, and program activity data to determine program uptake. Using an intent-to-treat approach and regression-based risk adjustment, they estimated whether the program was associated with changes in cost and utilization. Data on program fees were unavailable. RESULTS: Overall, the program was associated with a nonsignificant cost increase of $13.75 per member per month (PMPM). The wellness component alone was associated with a significant increase of $20.14 PMPM. Case and disease management were associated with a significant decrease in hospital admissions of 4 and 1 per 1000 patient-years, respectively. CONCLUSIONS: Our results suggest that the programs did not reduce medical cost in their first year, despite a beneficial effect on hospital admissions. If we had been able to include program fees, it is likely that the overall cost would have increased significantly. Although this study had important limitations, the results suggest that a belief that these programs will save money may be too optimistic and better evaluation is needed.