What's the Financial Impact of Disease Management Programs?

December 24, 2014

Disease management (DM) is becoming increasingly commonplace in health plans of all sizes. In the large employer arena, 70% offer at least one DM program, according to Mercer Human Resource Consulting's National Survey of Employer-Sponsored Health Plans 2004. A separate survey by Aon Consulting of human resources executives found that 43% of the surveyed companies had formal disease management programs in place. And, a survey by Kaiser Family Foundation/Health Research and Educational Trust (KFF/HRT) of public and private firms ranging in size from upwards of three employees reports that 56% of workers with health care coverage are in plans that have at least one DM program.

A disease management program focuses on a particular condition-usually a chronic one-and offers care monitoring and coordination, along with patient education and care strategies. The end goal is to enable the patient to manage the condition in a way that enhances quality of life and day-to-day functioning, while providing appropriate care, avoiding complications, reducing hospitalizations and, hopefully, containing costs.

Prevalent DM programs are for conditions such as diabetes (99% of the workers covered in the KFF/HRT survey who were enrolled in plans with a disease management component had access to a DM program for diabetes), asthma (86%), hypertension (82%) and high cholesterol (66%). Other conditions frequently subject to disease management include congestive heart failure, depression and multiple diseases.

On an intuitive level, DM programs would seem to offer the potential for substantial cost savings. Among the Mercer survey participants, 31% reported a positive return on the investment (ROI) they had made in a DM program, although a majority of these employers (59%) had not attempted to measure the program's financial impact.

A study from Cornell University and Thomson Medstat examined 44 separate studies on the ROI generated by disease management programs and came to the conclusion that "evidence of their economic impact is scant." The review revealed mixed results for programs targeting depression, diabetes and asthma, but positive ROI for programs targeting congestive heart failure or multiple diseases.


  • Congestive heart failure DM programs cost an average of $1,399 per participant, but generated medical savings of $3,884, meaning that $2.78 was saved for every dollar spent on the program.
  • DM programs managing patients with multiple diseases produced $4.37-$10.87 in savings for every dollar spent on the program.
  • The reviewed studies for diabetes DM programs were "too variable" to draw conclusions; only two of the reviewed studies for asthma DM programs showed enough savings to produce a positive ROI.
  • DM programs targeting depression consistently cost more-about $500 more a year-than they saved in direct medical costs.

While disease management programs may be implemented with the hope that they will have a positive financial impact on the employer's health care costs, a look at the health plan's bottom line alone shouldn't be the end of the cost-benefit analysis for these programs. By enhancing quality of life and reducing the risk of complications that can arise from a chronic condition, individuals who participate in such programs may have reduced absenteeism, be more productive on the job, have fewer instances of short- or long-term disability, and experience greater overall job satisfaction. In assessing the financial impact of a DM program in the workplace, these are important factors that should not be overlooked.