Our recent piece on strategies for making the transition to value-based contracting for executives of bed-based provider organizations, Moving Health Care From Beds to Wellness, spurred some interesting commentary from our readers. Many of the comments were about prevention—or specifically where prevention fits into this new equation. As an example, one reader wrote:
Both hospitals and nursing home need to change the mindset of their caregivers and give a larger place prevention. Educating and practicing physical exercise, cognitive exercise, stress reduction and emotional health, promoting and providing practical advice on healthy nutrition and encouraging socializing are critical to success in a VBR system in the long term.
I couldn’t agree more that wellness and prevention are big issues and critical to lowering health care costs. But there are a few financing realities that shape how we think about wellness and prevention programs in the U.S. health system. First, the return-on-investment (ROI) data on wellness and prevention programs is spotty. Second, wellness and prevention programs are designed to affect a consumer’s overall health over the course of their lifetime. With our current system, this means that there isn’t a direct financial incentive for many payers or provider organizations to implement these programs.
On the first issue, studies have shown different results when it comes to the effectiveness of wellness and prevention programs. One example, The RAND Wellness Programs Study, found that the two primary parts of wellness and prevention programs—a lifestyle management program and a disease management program—both showed a ROI. Lifestyle management programs focus on employees with health risks, such as smoking and obesity, and helps reduce those risks to help prevent future chronic conditions. Disease management programs help employees who already have a chronic disease, to manage that disease. Combined, these programs reduced the employer’s average health care costs by about $30 per member per month (PMPM)—with disease management saving the most. This management accounted for 87% of the savings and saved $136 PMPM, thanks to a 30% reduction in hospital admissions (see Do Workplace Wellness Programs Save Employers Money?).
There have also been developments in programs that promote physical exercise, socialization, and emotional well-being as a path to wellness. Recent studies suggest that these actions potentially increase brain health in older adults (see Exercise Activates Memory Networks In Older Adults) and consumers with dementia (see ‘Mindful’ Exercise Program Improved Cognitive & Physical Function Among Dementia Patients More Than Traditional Exercise). And consistent socialization is proving an important tool in keeping adults mentally, physically, and emotionally fit (see What Are The Health Benefits Of Being Social?).
On the other hand, a recent JAMA Network article, Effect of a Workplace Wellness Program on Employee Health and Economic Outcomes, found that the employee wellness program they analyzed did not lead to better health outcomes, lower health care spending, or improved employment outcomes. The 33,000 workers studied did show some improved health behaviors, such as weight management and regular exercise, over an 18-month period—yet these behavior changes didn’t translate to any tangible ROI.
Second, while there may be wellness or prevention programs that are effective, there is the issue of who actually sees the ROI and when – often times this is unlikely to be the stakeholder paying for the intervention. Though our fractured health and human service financing system is steadily tilting toward value-based reimbursement, a great deal of our system still functions in funding silos making find the funding for wellness and prevention difficult.
For example, we know that stable housing decreases health care costs. But for a health plan to invest in housing, they need to see that the ROI would specifically apply to their consumer population within the average time frame that the consumer belongs to their health plan—otherwise, they will never see that direct ROI. Another example, injectable antipsychotic medications have been shown to have benefits for certain consumers (decreasing emergency room use, reducing hospital readmissions, etc.), but often medication budgets and service budgets are financed separately, making these interventions impossible to finance. And I’ve spent a great deal of time working on the design of programs for diversion/reentry of individuals with behavioral disorders from the corrections system—programs that in pilots are proven to be effective, but fail to scale when they meet the realities of siloed funding.
There are also many emerging digital wellness and prevention programs coming to market—including programs for weight loss, mindfulness, meditation, and fitness. Most of the ones I have explored show clinical effectiveness in small projects, but whether they actually provide an ROI in a real-world situation (and at scale) is another issue.
For managers of accountable care organizations (ACOs) with a broad population, or for provider organizations managing a specialty medical home or a bundled rate, the investment in prevention and wellness services are big clinical and financial issues. To make a a wellness or prevention program worth the investment, they need to see a “proof of concept”, with a demonstrated ROI within their service system and with their consumers population—and in a time-frame that reflects the length of their contract. For many primary prevention and wellness initiatives, the only way they will be funded is through broader public health funding sources or by mandates to states, counties, or health plans. I’m hopeful that in the future we’ll see more payers, health plans, or provider organizations in value-based payment arrangements funding prevention and wellness programs—but for that mindset to become the new reality, the programs will be put to a very specific ROI test.
For more on the “fit” of prevention and wellness initiatives in a value-based health and human service environment, check out these resources from the OPEN MINDS Circle Library:
- Consumer Engagement = Performance
- Consumer Satisfaction, Consumer Engagement & Shared Decisionmaking
- Consumer Engagement Is The Missing Piece In Population Health
- How One Payer Is Upping Its Consumer Engagement Game
- How Consumer Engagement Is Reshaping Service Delivery
- The ROI Of Recidivism Prevention
- Social Determinant ROI-The Early Returns
- Social Services ROI Essential To Social Determinants Wave
- 27% of Health Care Organizations Report Health Coaching ROI of 2:1 or Higher
- For Telehealth, The ROI Is Where You Plan For It
And for more help on adapting to a changing market, join me on September 12 at The 2019 OPEN MINDS Executive Leadership Retreat for my keynote, “The ‘Melting’ Value Chain: How To Position Your Organization For Success In A New Era.”