Prevention for a Healthier America: Return on Investment for Disease Prevention at the Community Level

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Prevention for a Healthier America Return on
Investment for Disease Prevention at the
Community Level

• Jeffrey Levi, PhD
• Beyond Health Care Coverage
• The Commonwealth Club
• San Francisco, CA
• February 23, 2009

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Prevention for a Healthier America
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Prevention for a Healthier America Financial
Return on Investment?
With a Strategic Investment in Proven
Community-Based Prevention Programs to Increase
Physical Activity and Good Nutrition and Prevent
Smoking and Other Tobacco Use
INVESTMENT 10 per person per year
HEATH CARE COST NET SAVINGS 16 Billion annually within 5 years
RETURN ON INVESTMENT (ROI) 5.60 for every 1
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Key premises

• Coverage is important, but what surrounds (or
  precedes) coverage is also important
• Achieving good health outcomes requires healthy
  communities, not just healthy individuals
• Drivers of health care costs (chronic disease)
  can often be effectively prevented in the
  community as opposed to managed in the health
  care setting
• Reducing costs as a critical policy outcome
• Disparities in chronic diseases related to
  disparities in the health of communities
• Poverty, race/ethnicity and obesity
• Poor communities provide less support for healthy
  lifestyles (food, physical activity)

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Health Care Spending 2.2 Trillion in 2007
Prevention 4
Health Behaviors 50
Medical Services 96
Environment 20
Genetics 20
Access to Care 10
Factors InfluencingHealth
National Health Expenditures
SOURCE CDC, Blue Sky Initiative, University of
California at San Francisco, Institute of the
Future, 2000
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Focus on Community-Level Prevention Reduces
Health Care Costs

• Universal agreement that prevention is a good
  thing increases length and quality of life
• Growing evidence that some clinical prevention
  interventions show savings in health care costs
• Clinical interventions one person at a time
• Community interventions an entire population
  (those ill, those at risk, those well)
• Evidence of savings from some population level
  interventions (tobacco control, helmet laws,
  sanitation)

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What is Community-Level Prevention?

• Interventions that promote healthy environments
  and behaviors making it easier for people to
  make healthy choices, such as
• Changing community norms and empowering
  communities
• Coalition and social network building
• Social marketing campaigns
• Changing the physical and social environments
• Organizational practices and governmental
  policies
• Facilities and programs
• Walkability lighting, sidewalks, signs
• Access to healthy foods
• Increasing individual knowledge and skills

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How does community prevention differ from
workplace efforts?

• Non-clinical
• Creates a supportive environment that reinforces
  efforts at the workplace
• Reaches families, not just employees

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Examples of community programs

• Shape Up Somerville
• School food, school activities, parent and
  community outreach, restaurants, safe routes to
  school
• Healthy Eating Active Communities (HEAC)
• Schools, after school, neighborhoods, healthcare
  sector, marketing changes
• YMCA Pioneering Healthier Communities
• Community coalitions, policy changes, leverage
  other funding
• Healthier Communities, Steps, REACH

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Key Findings

• 1. Are there community-level interventions that
  could reduce chronic disease levels and thus
  affect the biggest driver of increased disease,
  disability, and cost?
• Yes. Regardless of chronic condition targeted,
  most interventions fell into 4 categories
  physical activity, nutrition, obesity, and
  smoking cessation.
• Reduced or delayed incidence of disease
  mitigation of disease

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Key Findings (2)

• 2. If we increased funding for community-level
  interventions, we could see a return on
  investment and more than break even in terms of
  ROI.
• 3. Savings can be shown by payer with private
  payers and Medicare the biggest winners.

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Or Are We Just Delaying High End-of-Life Costs?

• Compression of morbidity extending healthy life
  expectancy more than total life expectancy
  literally compressing chronic disease and
  disability into a smaller proportion of life
• Primary prevention delays or prevents disability
  vs. management of disability (current focus of
  health care system)
• Preventing obesity delaying or avoiding a knee
  replacement
• Managing disability providing a knee
  replacement
• Obesity results in more chronic conditions, but
  not shorter life

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Focus of the Model

• Interventions
• Type of intervention
• Effect on disease
• Associated costs

• Diseases
• Expensive
• Chronic
• Amenable to community-based prevention

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Most Expensive Conditions

• Arthritis
• Pneumonia
• Kidney disease
• Endocrine disorders
• Skin disorders
• Back problems
• Infectious diseases

• Heart disease
• Cancer
• Trauma
• Mental disorders
• Pulmonary conditions
• Diabetes
• Hypertension
• Cerebrovascular disease

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Priority Conditions

• Arthritis
• Pneumonia
• Kidney disease
• Endocrine disorders
• Skin disorders
• Back problems
• Infectious diseases

• Heart disease
• Cancer (selected)
• Trauma
• Mental disorders
• Pulmonary conditions (selected)
• Diabetes
• Hypertension
• Cerebrovascular disease

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Data Analysis

• Data
• Medical Expenditures Panel Survey (MEPS), pooled
  2003-2005 (adults only, excludes nursing home
  care)
• Methods
• Regression analysis to predict expenditures
• by disease cluster
• by disease trajectory
• by payer

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Disease Clusters-Intervention PathwaysShort Run
Medium Run Long Run
Physical activity, obesity, nutrition, smoking
cessation
cancer
arthritis
heart disease stroke renal disease
COPD
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Effect of Interventions

• We assume a sustained reduction in the prevalence
  of diabetes and hypertension
• Modeled as a one-time permanent change in
  response to an ongoing community-level
  intervention
• We also assume a steady state population
• In the current iteration of the model, we have
  not yet taken into account changes in mortality

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Plausible Intervention Effect

• Literature review offers a broad range of impact
  of community interventions
• Literature supports that interventions can have
  an impact of 10, but we modeled a 5 impact to
  be conservative (2.5 for cancers)
• Literature does not consistently present data to
  make comparisons across interventions

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Cost-Benefit

• Data are variable regarding per capita costs of
  interventions.
• Range in the literature is quite wide.
• For the purpose of this exercise, we are assuming
  an average of 10 per capita to be very
  conservative and to permit a group of
  interventions to be introduced, including some
  that might be targeted and higher cost.

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Net Savings 5 Impact at 10 Per Capita Cost (in
Millions) (in 2004 dollars)
Short Medium Long
U.S. (Mid-term ROI 5.601) U.S. (Mid-term ROI 5.601) U.S. (Mid-term ROI 5.601) U.S. (Mid-term ROI 5.601)
Care Cost Savings 5,784 19,479 21,387
Intervention Costs 2,936 2,936 2,936
Net Savings 2,848 16,543 18,451
Short Run 1 to 2 Yrs. ? Medium Run 5 Yrs. ?
Long Run 10 to 20 Yrs.
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Net Savings By Payer 5 Impact at 10 Per Capita
Cost (in 2004 dollars)
1-2 Years 5 Years 10-20 Years
Medicare 487 million 5.213 billion 5.971 billion
Medicaid 370 million 1.951 billion 2.195 billion
Private payers/Out of Pocket 1.991 billion 9.380 billion 10.285 billion
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Annual Net Savings California(5 effect, 10
per capita cost, in 2004 dollars)
Short Medium Long
California (Mid-term ROI 4.841) California (Mid-term ROI 4.841) California (Mid-term ROI 4.841) California (Mid-term ROI 4.841)
Care Cost Savings 621.4 million 2,092.7 million 2,297.7 million
Intervention Costs 358.41 million 358.41 million 358.41 million
Net Savings 262.9 million 1,734.3 million 1,939.3 million
Short Run 1 to 2 Yrs. ? Medium Run 5 Yrs. ?
Long Run 10 to 20 Yrs.
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Net Savings by Payer California(5 effect, 10
per capita cost, in 2004 dollars)
Short Medium Long
MediCal (state) 12.7 million 84.1 million 94 million
Private Payer/Out of Pocket 166.4 million 1,097.8 million 1,227.6 million
Medicare (federal) 71 million 468.2 million 523.6 million
Short Run 1 to 2 Yrs. ? Medium Run 5 Yrs. ?
Long Run 10 to 20 Yrs.
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Whats not captured

• Nursing home costs which would increase MediCal
  savings
• Targeted efforts in high prevalence communities
  would increase the return on investment
• Non-health care costs

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Multiplier Effect
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Limitations

• Limited data on sustainability and scalability
  hence the assumption that only a one-time effect
  even though intervention sustained over time. (Or
  new interventions introduced over time.)
• Model calculates savings from reductions in
  prevalence other models look at stemming the
  rise.
• Savings in 2004 dollars, though costs have risen.
• Model incorporates marginal cost of
  interventions, not the cost of basic
  infrastructure.

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Contributors

• Trust for Americas Health
• Jeff Levi, Chrissie Juliano, and Sherry Kaiman
• New York Academy of Medicine
• Ruth Finkelstein, Gabriel Cohen, Ana Garcia, and
  Julie Netherland
• Prevention Institute
• Larry Cohen, Jeremy Cantor, and Janani
  Srikantharajah
• The Urban Institute
• Barbara Ormond, Brenda Spillman, Timothy
  Waidmann, and Bogdan Tereshchenko

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Policy Implications (1)

• Messages
• Community-level prevention needs to be equal
  partner with screening and clinical prevention
• We cannot do health reform (or afford it) without
  addressing community and clinical prevention
• Workplace wellness programs need community-level
  prevention to support or reinforce their impact
• Business and labor should participate in
  community-level activities
• Certain prevention interventions can save money
• Polling shows the public is willing to invest in
  prevention
• Congress and incoming Administration should
  recognize improving the health of Americans as a
  national priority

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Policy implications (2)

• Need to identify creative ways to finance
  community-level prevention
• Contributions from those payers who benefit
• Health reform all funding options should be in
  play
• Medicare, Medicaid demonstrations
• Economic Recovery Act Opportunity to invest in
  communities and make population healthier as we
  move toward health reform

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Policy implications (3)

• Healthy communities perspective requires
  eliminating stovepipes and thinking how all
  funding streams come together to improve health
• How can primary care and community prevention
  work together?
• How can we fund more creatively?
• Appropriated funds, new streams (e.g., soda tax,
  premium tax)

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A Wellness Trust at state/local level?
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A natural experiment

• 650 million in stimulus bill to carry out
  evidence-based clinical and community-based
  prevention and wellness strategiesthat deliver
  specific, measurable health outcomes that address
  chronic disease rates.
• a historic commitment to wellness initiatives
  will keep millions of Americans from setting foot
  in the doctor's office in the first place --
  because these are preventable diseases and we're
  going to invest in prevention. President
  Barack Obama, Feb. 17, 2009

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Questions

• To access the national edition of Prevention for
  a Healthier America
• www.healthyamericans.org

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The American Recovery and Reinvestment Act of
2009 Social Disparities and Health Improvement

• Jeffrey Levi, PhD
• Beyond Health Care Coverage
• The Commonwealth Club
• San Francisco, CA
• February 23, 2009

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Stimulus address multiple aspects of social
determinants of health

• Poverty, education, and employment
• Making Work Pay tax credit
• Food stamp benefit increase
• Unemployment insurance increases/expansions
• Education funding
• Workforce training and employment services
• Emergency shelter
• General support for states
• Access to coverage and care
• Access to prevention and support for a healthier
  environment

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Health specific aspects of stimulus

• Medicaid support for states (87.1 billion)
• Extending health insurance for the unemployed
  (COBRA) (25 billion)
• (9 months, 65 of premium with income
  lt125K/250K)
• Health center investments (1.5 billion)
• Health workforce (500 million)
• Steps toward reform Health IT (19.2 billion)
  and comparative effectiveness (1.1 billion)
• Public health investments (1 billion)

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Public health investments

• 300 million for immunizations, including adult
  immunizations
• 650 million for community prevention programs
  such as Healthier Communities

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Rationale for stimulus

• Overall objective Meeting immediate economic
  needs of states and those most affected by the
  recession
• Health IT, comparative effectiveness and
  prevention funding down payment on systemic
  reform

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Californias share 2009-11 (estimates from
Center on Budget and Policy Priorities)

• Administration estimates creates or saves 396,000
  jobs in CA over 2 years
• Making Work Pay Tax credit 12,570,000 people
• Medicaid 11.23 billion
• Increase in federal match by 6.2 additional
  increase based on unemployment level
• State Fiscal Stabilization Fund
• Education 4.9 billion
• Flexible 1.084 billion

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Californias share 2009-11 (2)

• Education
• Title I 1.591 billion
• IDEA 1.28 billion
• Unemployment Insurance
• 2.4 million recipients will receive 25 increase
• 506,000 new beneficiaries
• Supplemental Nutrition Assistance Program
• 1.466 billion 13.6 increase in benefits
• 2,432,000 beneficiaries affected

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Californias share 2009-11(3)

• Workforce Training and Employment Services
• Youth Services 185 million
• Dislocated Workers 225 million
• Adult Activities 80.9 million
• Emergency Shelter Grant Program
• 190.7 million
• Assist 25,200 households in CA

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OMB Guidance Transparency and Accountability

• Funds are awarded and distributed in a prompt,
  fair, and reasonable manner
• The recipients and uses of all funds are
  transparent to the public, and the public
  benefits of these funds are reported clearly,
  accurately, and in a timely manner
• Funds are used for authorized purposes and
  instances of fraud, waste, error, and abuse are
  mitigated
• Projects funded under this Act avoid unnecessary
  delays and cost overruns and
• Program goals are achieved, including specific
  program outcomes and improved results on broader
  economic indicators.

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Keeping the focus

• Assuring that discretionary dollars are used in
  targeted ways that address social determinants of
  health
• Research agenda
• Measuring impact on social determinants and on
  health regardless of motivation for funding
• Showing a return on investment

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For further information

• Center for Budget and Policy Priorities
• www.cbpp.org
• GWU analysis of health provisions
• www.gwhealthpolicy.org
• TFAH efforts on stimulus
• www.healthyamericans.org/stimulusdocs
• Federal site
• www.recovery.gov