Program Development Guide
Cost-Effectiveness Analysis and Business Case
In this Chapter:
4. Cost-Effectiveness Analysis and Business Case
Rigorous economic evaluation is critical in securing immediate buy-in and long-term investment in peer support programs. Decision-makers and policy-makers need concrete evidence of the financial benefits, sustainability and value added of peer support programs. Some approaches may be taken to examine the economic impact of peer support, including:
|Peers for Progress funded five projects to develop systematic evidence for the economic value of peer support and to address methodological challenges in the field.The Economic Analysis Report presents approaches to economic analyses in the evaluation of peer support programs and the development of a robust business case for peer support that Peers for Progress grantees conducted.|
Cost-Benefit Analysis (CBA): By estimating and totaling up the money value of the benefits and costs of peer support to the community, cost-benefit analysis helps measure the benefits and costs of peer support and determine whether the intervention is worthwhile. CBA can be used where analysis is needed to add or change a peer support program for decision making. In many cases, third party payers – such as private insurance or government – may require CBA to decide what services should be covered.
Cost-Effectiveness Analysis: As a truncated form of CBA, cost-effectiveness analysis fully investigates the cost side but does not translate the benefits (lives saved, a patient’s additional days of activity, illness prevented) into a monetary value. By comparing the relative cost and outcomes of diabetes management programs with and without peer support, cost-effectiveness analysis helps to identify strategies that optimize health outcomes with limited resources. This approach can redirect resources from ineffective to effective programs and also allocate resources from less cost-effective to more cost-effective care models.
A business case provides comprehensive information on health outcomes and financial analysis to assist organizational decision-makers to justify investments in specific peer support programs. The broad perspective of a business case is especially pertinent to decision makers because quality improvement initiatives like peer support are typically not reimbursed under fee-for-service systems and do not generate direct revenue. Thus, a business case for peer support may guide organizational support for programs with new payment models such as bundled payment, per-member-per-month (PMPM), capitation and pay for performance, all of which pay providers based on clinical outcomes and value rather than volume.
A business case is distinct from cost-effectiveness and other economic analytic models in taking into consideration a wide range of financial and non-financial costs and benefits of a program. In making a business case for peer support, it is important to emphasize how peer support contributes to the allocation of scarce resources, quality improvement in patient care, and positive return on investment (ROI).
|Whitley EM Everhart RM Wright RA (2006) Measuring return on investment of outreach by community health workers||This study evaluates the financial impact of community health workers (CHWs) on health care systems and policies. A longitudinal repeated measures design was used to assess the return on investment (ROI) of outreach by CHWs employed by Denver Health Community Voices|
|Brownson CA Hoerger TJ Fisher EB Kilpatrick KE (2009) Cost-effectiveness of Diabetes Self-management Programs in Community Primary Care Settings||This article estimates the cost-effectiveness of diabetes self-management programs in real-world community primary care settings. Estimates incorporated lifetime reductions in disease progression, costs of adverse events, and increases in quality of life.|
|Building the Business Case for Self-Management||Developed by the Robert Wood Johnson Foundation’s Diabetes Initiative, this handbook is a useful resource to help program managers understand the rational, methods and tool for building a business case for self-management of diabetes.|
|Reiter KL Song PH Minasian L Good M Weiner BJ McAlearney AS (2012) A Method for Analyzing the Business Case for Provider Participation in the National Cancer Institute’s Community Clinical Oncology Program and Similar Federally Funded Provider-Based Research Networks||In this article, the authors present a conceptual model of the business case for PBRN participation, a spreadsheet-based tool and advice for evaluating the business case for provider participation in a Community Clinical Oncology Program (CCOP) organization|
|Reiter KL Kilpatrick KE Greene SB Lohr KN Leatherman S (2007) How to develop a business case for quality||This paper describes the steps in developing a business case for quality-enhancing interventions (QEIs) in health care|
|Song PH Reiter KL Weiner BJ Minasian L McAlearney AS (2013) The business case for provider participation in clinical trials research: An application to the National Cancer Institute’s community clinical oncology program||This study explores whether providers believe there is a business case for participating in provider-based research networks and what factors contribute to the business case.|
© 2015 | Peers for Progress