This article first appeared in the June/July 2008 issue of the newsletter "States in Action."

Pennsylvania's Medicaid agency, the Office of Medical Assistance Programs or OMAP, used the ROI Calculator to examine the impacts of its existing disease management program on specific populations and determine how to enhance future disease management efforts.

Medicaid officials knew from past analyses that its disease management program for diabetes and four other conditions managed by their Primary Care Case Management vendor had an overall return on investment of 1.8 to 1 in its first year. They used the Calculator to measure the ROI for diabetes patients with one particular comorbidity or different combinations of various comorbidities. Results indicated that disease management focused on care guidelines tailored to patients with multiple comorbidities had particularly high returns on investment. That is, the more comorbidities, the greater the opportunity for savings.

Based on this information, the state plans to focus more intensive disease management on this group of beneficiaries, for example having face-to-face visits instead of telephone contacts. OMAP is currently negotiating these changes with its disease management vendors.

"The ROI Calculator allowed us to model a variety of options. And in modeling, there is always some guesswork. The ability to modify your assumptions is one of the best things about the tool," said Barry Buckingham, senior medical economist at OMAP.

Officials see the Calculator as a tool not only for prospective scenarios, but also to retrospectively determine whether programs achieved the expected returns. "We'll go back and plug in the numbers that really occur, and see just how far off we were," said Buckingham.