System takes guesswork out of program evaluation

Claims analysis, wellness wedded in projections

One of the greatest ongoing challenges for wellness professionals is cost-justifying their programs to senior management. In the past few years, that task has been made easier by the development of data analysis systems that can determine the cost-effectiveness of existing health promotion programs — and even project the likely cost benefit of a planned program.

One such system is the Parallax suite of decision support tools, developed by New Haven CT-based Corporate Health Strategies (CHS), a provider of health information systems and services. CHS is a wholly owned subsidiary of Applied HealthCare Informatics, a managed care information company which is a subsidiary of Minneapolis-based United HealthCare Corporation.

"Parallax is a medical claims data analysis system," says Peter Wagner, president of CHS. "You could say it’s a modular suite of products." The latest version of the "suite," Parallax ES (Enterprise System), includes the following applications:

• benefits modeling;

• integrated disability;

• prescription drug;

• plan performance (a summary overview of a plan's experience, with the built-in ability to "drill down" by demographics, divisions, employee status, etc.).

"The system can be used to assess the need for a program and target the audience that will give you the best return," explains Katherine A. Durso, PhD, consulting director with CHS. "It can also be used retroactively to get a sense of whether the program has been successful."

"You can look at your claims in terms of lifestyle factors, see which of them are modifiable, and put a number on the dollar cost based on the number of claimants involved in a particular condition that most of the literature says can be modified through health promotion and better self-care," says Bob Bertera, DrPH, a senior consultant in human resources with Wilmington, DE-based DuPont Company, a research and technology-based global chemical and energy company offering high-performance products based on chemicals, polymers, fibers, and petroleum. "Then, you can look at the actual impact of your benefit plan design — particular items that are supposed to influence prevention and wellness." Bertera says DuPont has been working with CHS for nearly five years.

A practical tool

Parallax has a number of practical applications for health promotion, notes Durso. For example, it can be used to help determine where you might best spend your "preventable health care cost" dollars — wellness programs, disease management and demand management, rehabilitation, or some combination of all four. Or, you might be considering implementing a smoking cessation program, and you want to know if it would be cost-effective given your employee population.

In order to answer those questions, the client provides CHS with their medical claims data, and any other pertinent statistics they may have on workers’ comp, absenteeism, enrollment, demographics, etc. "If they’ve done HRAs [Health Risk Appraisals], we integrate them, too," says Durso.

CHS then analyzes the data by examining those diagnoses identified as having a substantial lifestyle-related component — i.e., obesity and diabetes. "The factor could be negative, like smoking, or positive, like having regular health screenings," Durso explains.

The system is then used to isolate the amount of money that has been spent on those diagnoses. "Then we start to ‘drill down’ to the specific population where the condition typically happens — for example, there may be more employees in certain departments, or divisions, with that specific diagnosis," says Durso. "Then we look at which of those populations require which interventions."

Armed with this information, CHS can provide recommendations such as the following: "We have "X" dollars associated with this condition. It may be worthwhile to have a particular program specifically targeted to this population. We expect it to be X% effective, given X% program participation. You can expect to see savings of $X over 10 to 15 years."

After all the various data are factored in, CHS projects the client’s return on investment (ROI). "Of course, the projection is only as good as the information we’re given," Durso cautions.

A solid wellness component

CHS has ensured that its analysis system will appropriately target health promotion concerns by seeking ongoing input from the wellness industry. "We have organized an advisory group of wellness coordinators from among our customers," says Durso. "They have given us direction and acted as resources to one another." The group, with whom CHS meets or communicates periodically, includes representatives from DuPont, MetLife, and Florida Power & Light. What about at the worksite itself? "Typically, on most of our engagements we start working with the benefits manager," notes Durso. "But as the wellness directors find out what we have available, they get involved."

In the future, there will be more they can become involved with, as CHS has just announced a new forecasting tool, WELLCAST ROI. Like other CHS products, it evaluates return-on-investment for disease prevention, disease management, and occupational health interventions. What makes it different is that while Parallax evaluates on actual customer claims experience, WELLCAST ROI can be simulated without actual claims experience by using a database of national and regional averages on health risk factors, medical expenses, and productivity measures.

[Editor’s Note: For more information, contact: Corporate Health Strategies, 2 Whitney Avenue, New Haven, CT 06510. Telephone: (203) 781-5100. Fax (203) 624-7935. World Wide Web:]