A simulation model approach to analysis of the business case for eliminating health care disparities

BACKGROUND Purchasers can play an important role in eliminating racial and ethnic disparities in health care. A need exists to develop a compelling "business case" from the employer perspective to put, and keep, the issue of racial/ethnic disparities in health care on the quality improvement agenda for health plans and providers. METHODS To illustrate a method for calculating an employer business case for disparity reduction and to compare the business case in two clinical areas, we conducted analyses of the direct (medical care costs paid by employers) and indirect (absenteeism, productivity) effects of eliminating known racial/ethnic disparities in mammography screening and appropriate medication use for patients with asthma. We used Markov simulation models to estimate the consequences, for defined populations of African-American employees or health plan members, of a 10% increase in HEDIS mammography rates or a 10% increase in appropriate medication use among either adults or children/adolescents with asthma. RESULTS The savings per employed African-American woman aged 50-65 associated with a 10% increase in HEDIS mammography rate, from direct medical expenses and indirect costs (absenteeism, productivity) combined, was $50. The findings for asthma were more favorable from an employer point of view at approximately $1,660 per person if raising medication adherence rates in African-American employees or dependents by 10%. CONCLUSIONS For the employer business case, both clinical scenarios modeled showed positive results. There is a greater potential financial gain related to eliminating a disparity in asthma medications than there is for eliminating a disparity in mammography rates.