Researchers: Significant Return on Investment Found in Use of Community Health Workers

Feb. 4, 2020
A team of healthcare policy researchers has found that investing in specific type of community health workers produces an average 38 percent cost reduction, with an ROI of up to more than $3 per $1 invested

Long discussed, the concept of community health workers has rarely been evaluated in a formal way in terms of its potential effectiveness in communities. Now, a team of healthcare researchers has executed a study on the subject, which was published in the February issue of Health Affairs. The published article, entitled “Evidence-Based Community Health Worker Program Addresses Unmet Social Needs And Generates Positive Return on Investment,” was written by Shreya Kangovi, Nandita Mitra, David Grade, Judith A. Long, and David A. Asch.

“Interventions that address socioeconomic determinants of health are receiving considerable attention from policy makers and health care executives,” the researchers write. “The interest is fueled in part by expected returns on investment. However, many current estimates of returns on investment are likely overestimated, because they are based on pre-post study designs that are susceptible to regression to the mean. We present a return-on-investment analysis that is based on a randomized controlled trial of Individualized Management for Patient-Centered Targets (IMPaCT), a standardized community health worker intervention that addresses unmet social needs for disadvantaged people. We found that every dollar invested in the intervention would return $2.47 to an average Medicaid payer within the fiscal year.”

As the authors note, “IMPaCT is a theory-based intervention in which specially hired and trained community health workers provide tailored social support for high-risk patients. There are varying durations and intensities of IMPaCT depending on population needs. The trial upon which this economic analysis was based tested a six-month, high-intensity program among 302 adult patients who were insured by Medicaid or uninsured, were residents of high-poverty neighborhoods, and had been diagnosed with at least two chronic diseases (diabetes, obesity, tobacco dependence, or hypertension). The trial did not require that patients have a prior hospitalization or otherwise be predicted to incur high costs to be enrolled.” Looking at admissions and outpatient visits, the researchers estimated cost savings generated by the use of IMPaCT community health workers, and looked at annualized expenses, cost savings, and return on investment for an average team of six community health workers serving 330 patients per year.

Calculating costs per patient for enrolled versus control-group (non-enrolled) patients in both the inpatient and outpatient arenas, the researchers write, “The average facility cost to a Medicaid payer for an admission was $14,000, which we increased to $16,478 to reflect the addition of professional fees. The intervention arm had both fewer and lower-cost admissions,” they found, “with a total inpatient cost of $2,267,900.10, compared with $3,681,206.88 in the control arm. When outpatient costs were factored in, the total cost of care was $2,450,881.80 for the intervention arm and $3,852,189.78 for the control arm; thus, the intervention resulted in a 38 percent reduction in cost.”

And thus, “Overall, a team of community health workers saved Medicaid $1,401,307.99. This savings divided by program expenses ($567,950.82) yielded a return of $2.47 for every dollar invested, realized within a single fiscal year. In a sensitivity analysis that varied the number of admissions and outpatient visits attributable to the intervention, we found that the return ranged from $1.84 to $3.09.”

As the authors conclude, “We have described a community health worker model that achieves a favorable return on investment for Medicaid payers by effectively responding to the social determinants of health. Our pragmatic return-on-investment analysis has influenced a regional Medicaid payer to expand its investments from the delivery of patient care, which is directly reimbursed, to the delivery of social support—which was previously not reimbursed but which nevertheless adds health and financial value. We believe that the same calculations are likely to be relevant to other populations, providers, and insurers.”

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