More than 125 companies market diabetes management programs to employers, and more than 75 additional companies offer musculoskeletal programs.¹ While value statements vary, these and other point solution vendors claim they can achieve savings in medical, pharmacy and disability claims and improve clinical outcomes. They provide case studies, white papers and published research papers. Some vendors have also commissioned third parties to review their methods for calculating savings.

How can an employer objectively validate these claims? Unfortunately, independent researchers have yet to publish the results of randomized trials, while organizations like The Peterson Health Technology Institute have published studies questioning the benefits of many of these programs.²

Asking The Right Questions

In the meantime, employers need to use their own data to see if the “innovative” programs marketed by these vendors have resulted in progress. Among the questions employers should ask:

Is the solution reaching the target population?

For example, say an employer offers a diabetes management vendor program. What percentage of members with Type 2 diabetes engage with it? Are prediabetics slowing their progression to a diagnosis of diabetes? Are there subgroups of employees that are not engaging with the solution? If so, are differences in engagement rates based on social determinants of health, job site, union status, salary band, etc.? Answers suggest opportunities for different communication strategies.

What are the characteristics of members engaging with the program?

A Brown & Brown custom analysis found that 97% of people engaging with one employer’s virtual Musculoskeletal (MSK) program had not used traditional physical therapy in the year prior, and only 60% faced a claim with an MSK diagnosis. In other words, the virtual MSK program was attracting a new group of people who had yet to incur significant MSK costs. Perhaps the virtual MSK program will avoid future costs, but there was no reduction in MSK or physical therapy claims in the near term.

Is there evidence that the use of the program is growing?

How many new members engage with the program over time? Ideally, there will be a “water cooler effect,” meaning that employees who use a program will pass their positive impressions to their colleagues. If a program enrolls spouses and dependents, is growth observed in those sections of the population?

Do we see a reduction in medical and pharmacy claims for the enrolled population that can be attributed to the program?

Too often, vendors will attempt to calculate savings based on avoided utilization and expense, using projected direct cost avoidance calculations. Here is a typical scenario: an MSK solution implemented by an employer last year may result in fewer knee replacement surgeries in the future. It will then take several years of data for employers to verify and compare projected versus actual savings (if any), particularly given employee turnover.

A proper claims analysis typically requires a data warehouse where medical and pharmacy claims can be linked to program participant data at the member level, providing a holistic view of care. With this integrated data, employers can see differences in utilization rates and costs between cohorts, e.g., those that use the program and those with similar demographics or health profiles that do not. Risk adjusting between the participant and non-participant populations will enable a more complete analysis. Alternatively, employers can look at utilization and costs before and after program introduction.

Getting Some Answers

Employers should not be fooled or dazzled by vendors’ claims about the effectiveness or return of these programs. Instead, they should develop a data-driven approach to measure performance on objective terms:

• Set quantifiable, documented measures for each program.
• Examples of these measures might include participation rates, program abandonment rates, the rate of growth in program use, reductions in near-term medical and pharmacy costs, Net Promoter Scores, member-reported data on weight loss, likelihood of pursuing elective surgery, etc.
• Where possible, avoid measures related to possible cost avoidance in the unspecified future or estimates of reductions in lost workdays that cannot be validated in disability data.
• Prioritize quantitative clinical data, like lab results, Body Mass Index (BMI), waist measurement or pain scores; it’s best if those are collected by providers or wearable devices but are still valuable if self-reported by participants.

With these measures in place, employers should meet at least semi-annually with each vendor and review each agreed-upon measure. Discuss if the program needs to be tweaked or communicated differently. If there is no improvement over time, or if the initial impact of the program wanes over time, consider sunsetting the program.

Ideally, employers should collaborate and create common standards for measurement. By working together, employers may compel vendors to reach a higher standard for achieving real progress — now that would be truly innovative.

1. Brown & Brown Vendor Database, accessed January 9, 2025
2. https://petersonhealthcare.org/our-work/fostering-innovative-solutions/health-technology/peterson-health-technology-institute/

Jason Elliott

Principal

Christopher Kardos

Managing Partner