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APHA Scientific Session and Event Listing

Recorded presentation

A. James Lee, PhD¹, Donald S. Shepard, PhD², Sarita Bhalotra, MD, PhD², and William B. Stason, MD, MS². (1) Dept. of Community Health & Sustainability, University of Massachusetts Lowell, 528 Andover Street, Lowell, MA 01852, 978-703-0146, AJames_Lee@uml.edu, (2) Schneider Institute for Health Policy, Heller School, Brandeis University, 415 South Street, Waltham, MA 02454-9110

In 2000, the Centers for Medicare & Medicaid Services (CMS) contracted with Brandeis University to evaluate the Medicare Lifestyle Modification Program Demonstration. The Demonstration’s two programs are Dr. Dean Ornish's Program for Reversing Heart Disease (Ornish) and Dr. Herb Benson's Mind/Body Medical Institute (MB). In evaluating these programs, we are concerned not only with health status changes and possible cost offsets, but also with measuring the costs of the interventions themselves. Whatever the program benefits, if the Medicare reimbursement level was not adequate to pay the “steady state” program costs, the programs themselves may not prove viable in the long run. Thus, in evaluating this demonstration, we developed a cost model that sought to estimate what the programs would cost when reasonably mature. We are applying the same model to cardiac rehabilitation (CR) programs at both demonstration and freestanding sites, which provide shorter term and less intensive services for similar patients. We are studying CR costs at both demonstration and independent sites interested in participating in this analysis.

In all six cardiac rehabilitation programs studied, the on-site program directors provided careful estimates of the time required by function (per-patient, per-cohort or annual total) for each staff member involved in program implementation and support. We used this information to develop detailed models of the programs' underlying cost structures—with some cost elements fixed on an annual basis, others varying with the number of patient cohorts, and still others varying with patient volume.

From initial findings, we estimate that an episode of CR at one hospital's traditional CR program entailed 60 scheduled contact hours and cost just $1,359 per Medicare beneficiary; by contrast, the hospital’s Ornish program entailed 220 scheduled contact hours and cost $10,710 per beneficiary. Thus, for what it cost to send one beneficiary through its Ornish program, Medicare could have paid for nearly eight beneficiaries to go through the same hospital's traditional CR program. Although both methodology and findings will be presented, this report will focus on describing the model structure and assumptions.

Learning Objectives: At the conclusion of the session, participants will be able to

• Recognize the difficulty of program costing.
• Apply a systematic approach to program costing.

Keywords: Cost Issues, Methodology

Presenting author's disclosure statement:

Any relevant financial relationships? No

Recorded presentation