Objectives: To examine costs associated with an asthma management program that reduces asthma-related health services utilization and to calculate potential return on investment (ROI) from the Medicaid managed care plan perspective.
Study design: Cross-sectional.
Methods: Clinical and economic data were obtained for 3298 ethnically diverse children with asthma (48% with persistent asthma) who resided in a poor urban community (Hartford, Connecticut) and were enrolled in Easy Breathing, an asthma management program for pediatricians. We calculated the cost per participating child with asthma during the first 3 years (July 1998 to June 2001) relative to the difference in costs for participating and nonparticipating children calculated by applying Medicaid reimbursement rates to data on services.
Results: Start-up costs were $28.95 per child with asthma in year 1, and operating costs averaged $10.28 in years 2 and 3. The mean reduction in costs was $36.72 per child per year in years 2 and 3. If Medicaid managed care plans had been charged an amount equal to program operating costs after year 1 ($10.28 per child with asthma per year), at-risk health plans could have incurred cost savings of approximately $26.44 per child with asthma per year. The potential ROI for years 2 and 3 was $3.58 per US dollar spent.
Conclusions: Easy Breathing reduced overall costs of care for urban children with asthma of varying severities. If managed care plans held at risk by Medicaid had reimbursed program operating costs for participants in Easy Breathing, they would have experienced a positive ROI.