What Are You Worth? Demonstrating the Value of Your Program to Your Community and Potential Investors Ethan Joselow, MPH

Presentation Goals To give an overview of common methods for demonstrating your value. To provide a set of tools that you can use to define the value of your program for: –Your community –Potential investors (grantmakers, the state, the community itself)

Presentation Structure 1.Understanding the costs avoided, savings enjoyed –Cost-benefit analysis –Cost-comparison analysis 2.Social Costs Avoided –Sick days, wages 3.Health Costs Avoided –ER visits, hospitalizations

What were your program’s costs? –Budget: Fixed and recurring costs… What costs were avoided as a result? –Lost time, wages, health care costs… –AKA Parts 2 and 3 of this presentation. Are the avoided costs greater than the program’s costs? 1. Cost-Benefit Analysis Challenge: How do you find savings? Looking at a program on its own…

1. Cost-Benefit Analysis Program Element Total Cost Survey administration$20,000 Medical screening$50,000 Educational programs$25,000 Administrative costs$5,000 TOTAL$100,000 Return on Investment Findings Expenditures$100,000 Program Benefit (savings in health care expenditures)$400,000 Savings$300,000 Return On Investment4:1 The Company X Worksite Wellness Program Adapted from RTI-UNC Center of Excellence in Health Promotion Economics November 2006 Volume 1, Issue 3. What are your savings?

1. Cost Comparison Analysis Need to know: –Upfront costs –Recurring (unit) costs –Number of units delivered Ideal for: –Considering efficiency and practicality –Talking to funders about long-term savings from an initial investment It’ll pay for itself! Comparing two otherwise equal program choices…

1. Cost-Comparison Analysis Program Goal: To monitor blood pressure, weight and a few other clinical measures for a homebound rural population. Plan A:Plan B: Nurse Home VisitsTelehealth Monitoring Upfront Costs$1,000$10,000 Recurring Costs$30/visit$3/upload Cost after 300 units$10,000$10,900 Cost after 600 units$19,000$11,800 Cost after 900 units$28,000$12,700 Value Statement: After 900 units of monitoring, the telehealth system saves us $15,300 over nurse visits.

2. Social Costs Avoided Information on avoided sick days, lost productivity saved through services you provide. Evidence and Estimates. Especially useful for speaking to employers and their representatives.

2. Social Costs Avoided What do you need to make an estimate? Your evaluation data –Number served, cost of the intervention. Research on the value of your intervention –Journal articles, evaluations of similar programs… Local information –Average wage, labor participation rate…

2. Social Costs: Examples The Facts: In 2004, Georgia Federally-Qualified Community Health Centers (FQHCs) treated: –About 24,000 Diabetic Workers. –About 12,000 Hypertensive Workers. The state average annual wage was: –About $24,000 per year. …evaluation data …local information

2. Social Costs: Examples The Research: “Economic Consequences of Diabetes Mellitus in the US in 1997” Diabetes Care, 1998 Feb; 21(2): Berndt ER, et al. “Workplace Performance Effects from Chronic Depression and its Treatment”. Journal of Health Economics, 1998; 17: “The average untreated diabetic has 8.3 additional sick days a year. Proper diabetes management can reduce sick days to 1.4 per year.” “A person with uncontrolled hypertension works an average of 6 percent fewer hours per week compared to someone receiving proper care and attention. This works out to about 20 days of work lost a year.” …or about 3% more workdays. …or about 6% more workdays.

2. Social Costs Avoided The Savings: Sick days earnings saved by treatment of diabetes: $8,352,470 –Cost to treat: $5,961,144 Sick day earnings saved by treatment of hypertension: $34,907,048 –Cost to treat: $10,138,394 …a return of $1.40 for each dollar spent. …a return of $3.50 for each dollar spent.

3. Health Costs Avoided Medical Expenditures Per Patient –Do you promote physical activity? –If so, you may be saving $1365 a year in medical expenses for every inactive patient you get moving. † –Ask the local hospital how much of that money is likely coming out of their pockets. –You save them money. † Pratt M, Macera CA, and Wang G. Higher Direct Medical Costs Associated With Physical Inactivity The Physician And Sportsmedicine 28(10). October Dollar figure for 2006 based on medical inflation estimated between 1987 and 2006 by the CMS National Health Expenditures tables.

3. Health Costs: Diabetes Savings Research shows a decrease in health care costs by reducing HbA1c levels of diabetics. Adapted from: Gilmer TP, O'Conner PJ, Rush WA, Crain AL, Whitebird R, Hanson AM, Solberg LI: Predictors of Health Care Costs in Adults with Diabetes. Diabetes Care 28(1): 59-64, 2005.

…What does this mean for us? Adapted from: Gilmer TP, O'Conner PJ, Rush WA, Crain AL, Whitebird R, Hanson AM, Solberg LI: Predictors of Health Care Costs in Adults with Diabetes. Diabetes Care 28(1): 59-64, Patient Classification HbA 1C 10%-9%HbA 1C 9%-8%HbA 1C 8%-7% Cost Savings x # of Patients = SAVINGS Cost Savings x # of Patients = SAVINGS Cost Savings x # of Patients = SAVINGS Diabetes w/ Heart Disease and Hypertension $2,675_____$ ______$3,373_____$ ______$96650$ 48,000 Diabetes w/ Heart Disease $2,764_____$ ______$2,620_____$ ______$750_____$ ______ Diabetes w/ Hypertension $1,503_____$ ______$1,424_____$ ______$407_____$ ______ Diabetes Only $1,071_____$ ______$1,015_____$ ______$290_____$ ______ $966 x 50 = $48,000 savings in health care costs 3. Health Costs: Diabetes Savings

A Few Sources Web-based ROI calculators you can use NOW. –Alcohol Cost Calculator: –Obesity Cost Calculator: –ROI Forecasting Calculator:

Our Library of Resources 1.Access to Care and ER Visits 2.Behavioral Health 3.Case Management and Promotoras 4.Data Resources and Methodology 5.Diabetes and Obesity 6.Economic Impact Analysis and General ROI 7.HIT 8.Maternal/Child Health 9.Migrant/Seasonal Farmworkers 10.Prescription Drugs

The CHSD ROI Calculator A stand-alone tool developed by the TA team especially for rural health. Download the calculator at

Questions? Ethan Joselow