What is this about?

The document in this edition of Connections is a comprehensive 22-page article from JAMA that provides a great deal of health care cost summary information for the period 1996 to 2016 and a great look at condition-specific average cost information and patterns that can be linked back to targeted wellness program interventions.  The information also provided help by capsulizing the pattern of health costs for various populations to help reflect their cost patterns which is very helpful when you do not have actual claims data for your population.

Why is this important?

This document represents one of the most authoritative national sources available for condition-specific average health care costs.  This data allows us to show senior management credible national data on likely average costs of various medical conditions that are directly related to health habits among employees and their family members and that are usually addressed by employee wellness programs.  This data is critical for the preparation of economic-based budget appeals for program funding and expansion post-COVID.

What can you do with this document?

• First, skim through the article to get a sense of what types of data are provided.
• Next, identify the specific medical conditions or diagnoses that your program addresses through it’s behavior change and risk reduction interventions.
• Next, for each of these specific medical conditions determine what the most recent average cost is likely to be. You can update them from 2016 by adjusting them annually for medical trend inflation rates.  (These are usually in the range of 4% to 8%) The adjustment sources can include the Bureau of Labor Statistics, Employer Cost Index.
• Next, If you have any health condition prevalence information before and after data for your program/population, make an estimate of what the economic effects of the reduction of medical conditions are likely to be.
• Next, if you can identify the age and gender-related factors associated with the medical conditions that are relevant to your population you can possibly make an economic estimate of the amount of potential economic savings that is present in your population.
• Finally, you can use the 2016 average costs multiplied by actual medical trend (for example, 5% to 8%) to estimate the cost of doing nothing versus the costs of various levels of anticipated program effectiveness.

In summary, this article provides very useful data on the average cost of selected medical conditions that can be used to help make projections about the potential economic trends associated with wellness program targets and interventions to senior management.