economic analysis in peer support

ECONOMIC ANALYSIS IN PEER SUPPORT
Breadth of Approaches and Implications for Peer Support Programs
There is strong evidence that peer support helps
individuals prevent disease, manage chronic
conditions, cope with emotional and psychological
challenges, and become more engaged in health
care systems (1-3). Research studies also indicate
that peer support may be a cost-effective and
cost-saving strategy for providing personcentered care; according to a literature review of
economic evaluations of peer support between
2000 and 2014, 15 cost-effectiveness studies and
12 other economic analyses of peer support
interventions 1 highlight the economic value of
peer support using a variety of approaches (4-24).
These evaluations focus on peer support in the
context of diabetes, mental health and substance
abuse, breastfeeding and postnatal care, and
primary care. The table on the right summarizes
key findings from seven of these studies.
Economic Analysis Studies for Peer Support Programs
1. Encourage – Diabetes Peer Advisor Program in rural Alabama
(4)
 59% probability of cost-saving
 55% to 93% probability of being cost-effective,
depending on those included (e.g., higher likelihood of
being cost-effective for those with greater need, those
with depression or poorer baseline clinical status)
2. CHWs outreach in Federally Qualified Health Center in Denver
(5)
 Shifted costs from urgent care, inpatient care, and
outpatient behavioral health care
 Increased utilization of primary & specialty care visits
 Return on investment (ROI) = $2.28 for every dollar spent
3. Diabetes Initiative of Robert Wood Johnson Foundation (7)
 Cost per Quality Adjusted Life Year (QALY) = $39,563 (well
within $50,000 criterion for good value)
4. Asthma Community Health Worker Project with Medicaid
Covered Children in Chicago (15)
 3-4 home visits over 6 months, liaison with care team
 ROI = $5.58 for every dollar spent
Rigorous economic evaluation is critical in
securing immediate buy-in and long-term
investment in peer support programs. Decisionmakers and policy-makers need concrete
evidence of the financial benefits, sustainability
and value added of peer support programs. Thus,
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. In October 2014, Peers for
Progress convened these grantees and health care
leaders to discuss approaches to economic
analyses in the evaluation of peer support
programs and the development of a robust
business case for peer support.
5. Lifestyle Modification for Low-Income Latino Adults with
Diabetes in South Texas (6)
 CHWs and nurse educators: home visits, self-management
education, individual counseling
 $10,995 to $33,319 per QALY
 Especially cost-effective among those with high initial
blood sugar levels
6. Preventing Re-hospitalization in Schizophrenia, Depression,
Bipolar Disorder (23)
 Recovery Mentors provided individualized support
 Over 9 months: 0.89 vs. 1.53 hospitalizations, 10.08 vs.
19.08 days in hospital (p < 0.05)
7. Reducing Depression/Anxiety Disorders in India (18)
 Provided education about psychological problems,
ways of coping, and interpersonal therapy delivered
by lay health counselors with primary care and
psychiatric back-up
 30% decrease in prevalence, 36% decrease in suicide
attempts, 4.43 fewer days no work/reduced work in
previous 30 days
 Intervention was cost-effective and cost-saving
1
“Peer support” is used generically to include community
health worker (CHW), lay health advisor, health coach,
promotor de salud and similar interventions.
1
APPROACHES TO ECONOMIC ANALYSIS IN PEER SUPPORT
As illustrated in the five projects supported by Peers for Progress, a variety of approaches may be taken
to examine the economic impact of peer support. Cost-effective analysis, business case analysis,
comparison of organizational settings and related financial structures, and payment models are four
methodologies that were implemented in the grantee projects.
1. Cost-effectiveness analysis
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 (25). This approach can redirect resources from ineffective to effective programs and also
allocate resources from less cost-effective to more cost-effective care models (25, 26). The two projects
below focused on analyzing the cost-effectiveness of peer support interventions for people with type 2
diabetes in different national and international locations.
Comparing Peer Support
Interventions with Usual Care
Cost Effectiveness of Group-Based and
One-on-One Peer Support
Investigators: Dr. Maria Pisu and her colleagues from the
University of Alabama at Birmingham
Investigators: A team of British and American
researchers led by Dr. David Simmons of Cambridge
University.
Focus: Cost-effectiveness of peer support intervention
among rural, low income African Americans in Alabama
and in other projects funded by Peers for Progress.
Focus: Cost-effectiveness of group-based and one-onone peer support using self-reported data from the
Peers for Progress-funded project RAPSID (randomized
controlled trial of peer support in type 2 diabetes in
Cambridgeshire, England).(29)
Following guidelines of Panel on Cost-Effectiveness
Analysis in Health and Medicine, the research team
determined cost-effectiveness by calculating the
incremental cost-effectiveness ratio (27).
Evaluation included the incremental cost per
incremental point reduction in HbA1c, blood pressure,
and QALY gained per patient, which can be used to
predict the incremental cost-effectiveness over a time
horizon of one year.
Results: Peer support had a 55% probability of being
cost-saving and from a societal perspective, a 55%–93%
probability of being cost-effective using threshold values
ranging from $50,000–$100,000/QALY (Quality Adjusted
Life Year).
The data were incorporated into the UK Prospective
Diabetes Study risk engine to extend analysis to a
lifetime horizon.
Probability of being cost effective was greater in subpopulations with higher needs – depressed or in poor
metabolic control.
Preliminary analyses indicate savings of over £100
(approximately $150) per participant after including
implementation costs.
Preliminary analysis from a project supported by Peers
for Progress in San Francisco (28) suggests that the peer
support intervention is cost-effective when compared to
usual care from a payer’s perspective.
Future research should address the costs of scaling up
these interventions as well as sustaining them.
2
2. Business case analysis
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 quality
improvement in patient care and positive return on investment (ROI) (30). Drawing attention to these
benefits may cause decision-makers to change their perceptions of peer supporters from “non-essential
personnel” to critical members of a team that help improve the quality of care and reduce overall health
care costs (31-33).
Dr. Paula Song, along with her colleagues Drs. Kristin Reiter, Christopher Shea and Charles Belden at the
University of North Carolina at Chapel Hill, are currently examining whether existing models and tools to
evaluate business cases may be applied to developing business cases for peer support programs. The team
will identify both direct and incidental costs and benefits as well as non-financial considerations for peer
support programs from the perspective of the organization that will be paying for the program.
Specifically,
▪ Direct costs and benefits may include the expenditures invested in developing and implementing peer
support programs, the continuing costs of operating the intervention over time, and the savings (i.e.,
increases in revenues or other quantifiable financial benefits that go to the organization investing in
the intervention) (30, 34);
▪ Non-financial factors may include conditions of participation, alignment of performance incentives,
organizational image, relevance to organization’s mission, and impact on organizational culture.
Major Takeaways from Building the Business Case
1. The perspectives and objectives of the target audience(s) shape the design of a business case.
As the business case considers only the perspective of investing entities of the peer support programs (e.g., providers,
funders, payers and policy makers), the choice of evaluation indicators will depend on their pertinence to the specific
investing entity. Particularly, different investing entities hold different objectives. For example, the objectives for a
payer who wants to reduce emergency room visits will differ from a provider who tries to improve service quality but
still ensure profits. Not all common measures (e.g., emergency visits, hospitalizations, quality of life, lost days of work)
should be included in every business case. Instead, the design of a business case needs to be tailored to the investing
entity for whom the benefits and costs will accrue.
2. ROI within a reasonable timeframe is a powerful tool.
The calculation of ROI is usually based on the net present value, using a risk-adjusted cost of capital as a discount rate.
In addition, different than cost-effectiveness analysis, a business case often considers the ROI within a reasonable time
frame with a maximum time horizon of five years.
3
Comparing organizational and financial structure of two contrasting models
Dr. Richard Crespo and his team from Marshall University School of Medicine in West Virginia compared
organizational and financing structures of two contrasting peer support models: a clinic-based model and
a social service model. Analysis of key informant interviews, costs, and clinical outcomes over six months
suggests that peer supporters from each organization contributed to improving community health in
different ways based on their populations. The table below summarizes the findings from both projects.
Clinic-Based Model:
Mingo County Diabetes Coalition
Social Service Model:
Northwest Georgia Heathcare Partnership
Community health workers (CHWs) targeted high-risk
diabetes patients for intensive care management and inhome follow-up.
CHWs were recruited from local hospitals and communitybased organizations and connected uninsured patients to
needed medical and social services including diabetes selfmanagement education.
Each CHW worked directly for the clinic and provided
support to up to 30 high-risk diabetic patients through
weekly home visits. CHWs were able to form strong
partnerships with their patients.
Each CHW worked for a local non-profit and served up to
100 clients. CHWs worked to eliminate a language barrier,
improve access to the health system and advocate for the
Hispanic population.
Substantial reductions in HbA1c were reached among highrisk patients. Of 73 patients, 77% achieved a decrease of at
least 1-percentage point that is generally considered
clinically significant.
Impacts were less pronounced in individual patients, but
there was improved access to health care across the large
population reached.
Patients were ensured access to medications, which
allowed the intervention to meet qualifications for
adherence. There was a total annual projected cost-saving
of $474,500 for 73 patients (adherence was defined as the
percentage of days for which the patient had a supply of
one or more maintenance medications).
Using reduced hospitalization and diabetic foot care as
measurement indicators, annual cost saving from diabetes
case management was projected to be $400,300.
Specifically, projected total cost savings from preventing
hospitalization for 20 clients was $198,100, and savings
from diabetes foot care for 84 clients was $202,200.
In sum, results indicate that the intervention in a clinical setting achieved substantial individual clinical
improvement in HbA1c for a small group of high-risk patients. On the other hand, the intervention based
in the community reached more individuals but with less pronounced individual impacts. It is striking that
the estimated cost savings ($400 to $500 thousand) were similar. Analyses also suggest the
complementarity of the two approaches and the advisability of their combination, both promoting care
and self management among community members and improving clinical status among high-risk
individuals.
4
3. Developing an innovative payment model for CHWs: A case study
As Medicaid expands under the Affordable Care
Act and fee-for-service is shifting to capitation,
there is a need for Managed Care Organizations
(MCOs) to develop, design and institutionalize
procedures, mechanisms and infrastructure
appropriate for the new care environment. This
initiative may occur through the expansion of the
role of CHWs in reducing cost and improving
health. With the launch of the Centennial Care
initiative in New Mexico, Medicaid enrollees were
stratified into: Level I (individuals with good to
excellent health), Level II (those with long-term Maintain current contrac ng for Level 3 members, through MCO referral process: $321 PMPM
Popula on management for Level 2 & 1 members: ~$5.75 PMPM
chronic disease or high cost conditions), and Level III
(those
complex health needs such as
(base
popula onwith
of 5,000very
members)
multiple chronic conditions, high hospitalization rates, high prescription drug use rates, and high
emergency department usage) (35).
Researchers at the University of New Mexico (UNM) and Hidalgo Medical Services (HMS) collaborated
with MCOs to develop identification strategies for each level within Centennial Care. At each level, they
developed a realistic caseload for CHWs working with patients and identified activities and interventions
that work best. Each CHW was assigned to provide services to 25–30 enrollees over a period of three to
six months. Services included health literacy (e.g., navigating the healthcare system, understanding the
importance of medication adherence) and other non-clinical support (e.g., assistance with transportation,
obtaining food stamps). The highest-need individuals received intensive individualized patient support
services, whereas those with lesser needs generally received interventions that addressed community
health barriers with a focus on system navigation and non-clinical social services.
In estimating the overall costs to MCOs (i.e., the cost of the investment in the “upstream” CHW model
and any decreased treatment costs):
▪ CHW payment model for the highest-risk patients (Level III) remained the same, outside of the Level
I and II combined PMPM rate. Not all Level III members were referred for services but were chosen
by MCO case managers at a monthly fee of $321 per month for each member referred for CHW
intensive intervention.
▪ A population management approach was taken for Levels I and II. An initial estimate of the necessary
PMPM rate to provide CHW services to all Level I and II members, based on a cohort of 5,000
members in a neighborhood or cluster of neighborhoods, was $5.75 PMPM. For a 12 month period,
the total cost was $345,000 equivalent to the total revenue generated by this PMPM approach.
Linear regression was used to estimate overall savings to fully allocate the CHWs’ salaried costs for Levels
I and II. Reimbursed care was assessed through billing records to estimate MCO costs. The return from
cost savings was higher for Level III beneficiaries, smaller but substantial for Level II, and low for Level I
beneficiaries. However, the long-term savings were significant because this expansion of CHW services
prevents members from becoming complex, high cost, and high utilizers. The conservative estimated ROI
for a 3-year program is 1.5:1.
5
IMPLICATIONS FOR RESEARCH AND ECONOMIC ANALYSIS OF
PEER SUPPORT PROGRAMS
Consider a variety of approaches to economic evaluation in the agenda of
research projects.
Similar to the range of peer support models, there are numerous approaches to economic evaluation
that reflect diverse analytic perspectives on varied programs in unique settings and populations.
Address challenges and gaps in research methodology.
1. Generalizability. To enhance the generalizability of outcomes, it is important to address
methodological issues such as analytic model selection, data availability, lack of comparison
groups, small sample sizes, time horizon, and proper discount rates.
2. Comparisons. Not all cost-effectiveness assessments are comparable as the measurement of costs
varies across peer support programs. Each program has a different function, operation model, and
focus on disease(s) or health condition(s), and different techniques used to measure costs hinder
the ability to compare findings across studies and in general literature.
3. Organizational Infrastructure and Data Management. Sustainable financing requires attention to
organizational infrastructure as well as data collection. It is important to consider: clarification of
the role of peer support in health care, establishment of common payment and reimbursement
policies, adequate and appropriate quality assurance, and increased quality of data collection for
analysis and evaluation of cost-effectiveness and ROI of peer support.
Think locally.
From a research perspective, rigorous economic analysis must address aspects of peer support
programs that may have tangible and/or intangible value. Whether the considerations are tangible,
intangible or combine both elements will vary from site to site. Site-specific considerations include
socio-economic status, culture, personnel, organizational structure, infrastructure and technology.
Ultimately, a business case combines the tangibles and intangibles as it considers monetary, nonmonetary and other intangible values.
From a payer perspective, representatives of health care enterprises emphasize the role of local
community to scale up and sustain their business model. The emphasis on local appraisal is congruent
with an emphasis on developing of health services within the context of local settings. For example,
the perspective of the business case focuses on local resources and strength and must be developed
within a specific site. On the other hand, Centene Corporation has collaborated with local
communities (e.g., churches, civil rights organizations) to develop their service network because they
believe that their model is “to make it a community solution instead of just giving a dollar for a shot.”
This decentralized approach has been described as an effective way to ensure sustainability by
engaging knowledgeable community members about local culture, people, and language, which is
crucial to the success of any business model.
6
IMPLICATIONS FOR IMPLEMENTATION AND QUALITY ASSURANCE
Peer support has the potential to greatly increase in value as it gains widespread recognition as an
effective and cost-effective strategy to improve quality of care and expand access to health care.
When shifting from reimbursing instances of care to developing innovative financial models, one should
consider the following implications for peer support programs:
Establishing a business case model for peer support is a high priority.
It is important to understand how to make a business case for peer support in general before creating
a business case for a specific peer support program. Preliminary results from a comprehensive
literature review indicate that despite a growing focus on the business case for quality improvement,
there is limited information on how the existing models and tools to evaluate a business case can be
applied to peer support programs (30, 36, 37). The establishment of a business case for peer support
can only go forward once these information gaps are filled.
Consider more innovative payment models for peer support/CHW programs and evaluate
costs under those payment models.
Because grant funding inherently limits the sustainability of peer support programs, researchers
should explore more innovative payment models that finance the entire system as opposed to
services delivered. New opportunities through the Affordable Care Act may provide funding for peer
supporters/CHWs as part of health management teams, as patient navigators, and as behavioral
health specialists. One avenue that can be explored is a business model that is owned and operated
by peer supporters.
Commercial opportunities for peer support may open doors to sustainability.
Representatives from health care enterprises encourage researchers and program managers to
envision peer support as a commercial model that can serve larger populations and generate positive
investment returns. Academic researchers and decision-makers of health programs are encouraged to
view peer support more in economic and profit-making terms. To address these differences in
perspective, the following questions should be considered: How peer support intervention can fit
into the niche of the health care business? How we can make peer support profitable? How we can
develop peer support into a business model?
Conclusion
Substantial emerging evidence indicates that peer support programs in a variety of areas of health care
and prevention are cost-effective. Additionally, payment models are emerging that point the way
toward financial stability of peer support programs reaching individuals with a wide range of needs as
well as clear value for payors. Different settings and audiences of peer support programs will lead to
different business cases of costs, strengths and added value. As in the example here, a community
based program may reach more people but with less dramatic impacts with each individual reached
than a program aimed at patients at high risk for unnecessary and costly intensive or hospital care.
A challenge for all of health care is economic feasibility. Clearly, peer support is well on its way to
establishing the economic feasibility of many of its applications.
7
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9
MEETING PARTICIPANTS
Charlie Alfero
Executive Director
HMS – Center for Health Innovation
Silver City, New Mexico
Jenny Hudson
Williamson Redevelopment
Authority
Williamson, West Virginia
Sarah Barger
Program Manager
Peers for Progress Program
Development Center
UNC Chapel Hill
Arthur Kaufman, MD
Vice Chancellor for Community
Health
Professor, Family & Community
Medicine
University of New Mexico
Health Sciences Center
Mike Belden, GCPH
Research Assistant
Doctoral Candidate
Health Policy and Management
Department
UNC Chapel Hill
Arvan Chan, MHA, MBA
Vice President, International and
Chief of Staff
Centene Corporation
St. Louis, Missouri
Muchieh Maggy Coufal, MPH, MA
Senior Program Manager
Peers for Progress Program
Development Center
UNC Chapel Hill
Richard Crespo, PhD
Professor of Community Health
Robert C. Byrd Center for Rural
Health
Marshall University School of
Medicine
Huntington, West Virginia
Edwin Fisher, PhD
Global Director, Peers for Progress
Professor, Department of Health
Behavior
UNC Chapel Hill
Cary Hobbs, MA
Senior Vice President and Chief of
Staff
Centene Corporation
St. Louis, Missouri
Manuela McDonough, MPH, CPH
Associate Director
Institute for Hispanic Health
National Council of La Raza
Washington, D.C.
Maria Pisu, PhD
Associate Professor
Dept. of Medicine
Division of Preventive Medicine
University of Alabama at
Birmingham
Kristin Reiter, PhD
Associate Professor
Health Policy and Management
Department
UNC Chapel Hill
Monika Safford, MD
Professor
Diabetes Prevention and Outcomes
Research in the Division of
Preventive Medicine
University of Alabama at
Birmingham
Christopher Shea, PhD
Assistant Professor
Health Policy and Management
Department
UNC Chapel Hill
10
David Simmons, MD
Lead Diabetes Consultant
Cambridge University Hospitals,
NHS Foundation Trust
University of Cambridge
Cambridge, UK
Paula Song, PhD
Associate Professor
Health Policy and Management
Department
UNC Chapel Hill
Tonya Taylor
Campaign Director
Newman Center
UNC Chapel Hill
Mike Van Den Eynde, MBA
Director of Medical Management
Life Sciences & Health Care
Deloitte Consulting LPP
Atlanta, Georgia
Huyen Vu, MSPH
Program Manager
Peers for Progress Program
Development Center
UNC Chapel Hill
La’Marcus Wingate, PhD
Prevention Effectiveness Fellow,
Centers for Disease Control and
Prevention
Assistant Professor, Howard
University
Washington, D.C.
Richard Wittberg, PhD
Adjunct Assistant Professor
School of Public Health
West Virginia University
Rebeccah Lyn Woodke
Graduate Research Assistant
Health Behavior Department
UNC Chapel Hill