Searching for a business case for quality in Medicaid managed care.

Background: Despite the prevalence of evidence-based interventions to improve quality in health care systems, there is a paucity of documented evidence of a financial return on investment (ROI) for these interventions from the perspective of the investing entity.

Purposes: To report on a demonstration project designed to measure the business case for selected quality interventions in high-risk high-cost patient populations in 10 Medicaid managed care organizations across the United States.

Methodology/approach: Using claims and enrollment data gathered over a 3-year period and data on the costs of designing, implementing, and operating the interventions, ROIs were computed for 11 discrete evidence-based quality-enhancing interventions.

Findings: A complex case management program to treat adults with multiple comorbidities achieved the largest ROI of 12.21:1. This was followed by an ROI of 6.35:1 for a program which treated children with asthma with a history of high emergency room (ER) use and/or inpatient admissions for their disease. An intervention for high-risk pregnant mothers produced a 1.26:1 ROI, and a program for adult patients with diabetes resulted in a 1.16:1 return. The remaining seven interventions failed to show positive returns, although four sites came close to realizing sufficient savings to offset investment costs.

Practice Implications: Evidence-based interventions designed to improve the quality of patient care may have the best opportunity to yield a positive financial return if it is focused on high-risk high-cost populations and conditions associated with avoidable emergency and inpatient utilization. Developing the necessary tracking systems for the claims and financial investments is critical to perform accurate financial ROI analyses.