Return on Investment Guidebook

Economic Evaluation of Population-Based Prevention Interventions

The worlds of healthcare and public health are currently undergoing rapid and fundamental change. Driven by the Affordable Care Act and by the unsustainable rise in healthcare costs, the healthcare community is moving from fee-for-service reimbursement  to pay-for-performance reimbursement. Profitability will increase not by doing more procedures but through using resources more efficiently and effectively. Quality and efficiency are thus becoming drivers, and the enhanced savings will become the source of greater profitability.

There are a number of forms that this outcomes-based reimbursement model might take. Examples are Patient Centered Medical Homes (PCMH), Accountable Care Organizations (ACO), bundled payments, and shared savings arrangements.

Shared characteristics of these models include:

1. The “healthcare continuum” extends beyond acute clinical care to include prevention, preventive health care and disease management;
2. Care requires a team of partners who collaborate to provide the range of services included in the expanded continuum of healthcare;
3. Risks and savings are shared among the partners,
4. Data collection and analysis are essential to evaluate performance, and
5. Both individual patients and the population of patients are the targets of care.

These developments in the world of outcomes-based reimbursement bring a new and important role for local public health departments local health depatments (LHDs). LHDs are the experts in prevention and in the surveillance of and response to communicable diseases. They are also experts in assessing the public health status of a community, and they are experienced in bringing together teams of community partners to address a community’s health issues. However, for many LHDs, a major obstacle to playing this new role is the fact that many potential partners, particularly hospitals/health systems, are unaware of LHD expertise. They may also need to be convinced that this expertise brings real value to a partnership with LHDs.

With these issues in mind, A Guidebook: Economic Evaluation of Population-Based Prevention Interventions in an ACO Community (PDF) is designed to assist local health department staff assess the value of their contributions, with a particular focus on population-based prevention interventions. The Guidebook provides a description of steps and things to keep in mind when calculating the economic value of population-based prevention interventions with a particular reference to potential ACO stakeholders. The steps include:

1. Engaging key stakeholders in the process
2. Specifying the intervention
3. Planning the evaluation project
4. Identifying and measuring costs and benefits
5. Calculating the return on investment (ROI)
6. Presenting findings