Documenting the Cost/Benefit and Return on Investment of Disease Management Programs: Practical Examples,Tools,and Templates

The decision to implement and provide ongoing support for disease management programs is often based primarily upon financial considerations. As such, program leaders should be advised to understand and apply the same financial approaches and rigor that the organization would apply to any other venture. This article discusses the application of standard financial analysis to the evaluation of disease management programs. There are several different approaches that can be utilized, with the most complete being a detailed cost/benefit analysis. Regardless of approach, financial evaluation centers primarily around cost reduction. An understanding of proper cost determination is the critical starting point for any approach used. Organizations must also move towards the factoring in of less tangible impacts such as clinical quality improvement, increased patient and provider satisfaction, and the value of various accreditations. These issues are more difficult to quantify but can be integrated into return on investment work. Disease management programs dealing with shorter-term conditions, such as birth or pneumonia, have been documented as providing positive return on investments using standard financial analysis. Longer-term conditions, however, have been more difficult to analyze. Certain programs are also showing negative returns on investment, but are clearly reducing adverse health events. All of these issues are becoming major considerations as organizations continue to pursue disease management as a core strategy.