PEBB’s new HEM

8/4/2011 – 8/5/2011:

The “Health Engagement Model” changes to PEBB are going to be very interesting. I encourage people to check out the PEBB FAQ on it, here. Comments welcome. More on this sometime next week. A bit more background in this Lund Report story, another here.

Here is a 2009 CBO study:

Researchers who have examined the effects of preventive care generally find that the added costs of widespread use of preventive services tend to exceed the savings from averted illness.

They cite this 2008 NEJM study:

Indeed, some evidence does suggest that there are opportunities to save money and improve health through prevention. Preventable causes of death, such as tobacco smoking, poor diet and physical inactivity, and misuse of alcohol have been estimated to be responsible for 900,000 deaths annually – nearly 40% of total yearly mortality in the United States.1 Moreover, some of the measures identified by the U.S. Preventive Services Task Force, such as counseling adults to quit smoking, screening for colorectal cancer, and providing influenza vaccination, reduce mortality either at low cost or at a cost savings.2 Sweeping statements about the cost-saving potential of prevention, however, are overreaching.

Jay Bhattacharya, a doctor and economist at Stanford’s School of Medicine, estimates that to prevent one new case of diabetes, an antiobesity program must treat five people – “not cheaply,” he says. Along the same lines, Mr. Gruber found that when retirees in California began visiting their doctor less often and filling fewer prescriptions, overall medical spending fell. People did get sick more often, but treating their illnesses was still less costly than widespread basic care – in the form of doctors visits and drugs. Louise Russell, an economist at Rutgers, points out that programs that focus on at-risk patients cost the least, but even they are rarely free.

As Dr. Mark R. Chassin, a former New York state health commissioner, says, preventive care “reduces costs, yes, for the individual who didn’t get sick.”

“But that savings is overwhelmed by the cost of continuously treating everybody else.”

On the other hand there is this study – by some damn economists – “Workplace Wellness Programs Can Generate Savings” with this abstract:

Amid soaring health spending, there is growing interest in workplace disease prevention and wellness programs to improve health and lower costs. This can come in many forms but one of the most important is employees taking care of their physical health as much as possible, which may mean changing their diet, exercising with resources like powerlife, the possibilities are endless for those who want to feel and function better. In a critical meta-analysis of the literature on costs and savings associated with such programs, we found that medical costs fall by about $3.27 for every dollar spent on wellness programs and that absenteeism costs fall by about $2.73 for every dollar spent. Although further exploration of the mechanisms at work and broader applicability of the findings is needed, this return on investment suggests that the wider adoption of such programs could prove beneficial for budgets and productivity as well as health outcomes.