Asthma Return-on-Investment Calculator

How the Model Works

This page describes the inner workings of the model. The model consists of inputs such as asthma prevalence and size of program impact with values determined by the user, outputs such as net present value that represent the results of the model, and formulas that connect the inputs to the outputs. The model also includes an extensive set of reference values available to populate the inputs. Refer to the Technical Guide for documentation on these default values and additional description of the model's structure.

The model inputs and outputs are listed below, followed by the formulas that connect inputs to outputs.

Model Inputs (controlled by the user):	Model Outputs (results):
Population type Geographic location Size of target population Age and gender Race (available for Medicaid) Program participation rate Asthma severity Health care utilization & cost outcome measures Productivity outcome measures Cost of the program Scope of medical services Cost perspective Study design of literature Time horizon of simulation Program phase-in period Discount rate	Program savings Program cost Net present value (NPV) Return on investment (ROI) Break-even program impact Break-even program cost

Formulas of the model:

1. Estimated number of persons with asthma:

For commercially insured and State employees X_ijd = σ_k (X_ijkd), where X_ijkd = (N_ij * A_ijk * a_ijkd)

For Medicaid X_ijd = σ_k (X_ijkd), where X_ijkd = σ_e (N_ij * A_ijk * B_ije * a_iked)

2. Expenditure per person with no program:

For commercially insured and State employees C_ijdprs = J_jprs * σ_k (X_ijkd * Y_ikdprs * W_ikdprs) / (X_ijd)

For Medicaid C_ijdprs = σ_e (B_ije * R_eprs) * σ_k (X_ijkd * Y_ikdprs * W_ikdprs) / (X_ijd)

3. Expenditure per person under a management program:

D_ijdprstu = σ_k (C_ijkdprsu * (1 + Z_ikdpt * Minimum(1, (u - u_base) / F)))

Results of the model:

Total savings = S = P * X * σ_u ((1/(1+Q)^(u-u_base)) * (C - D_u))

Total program cost = K = P * X * σ_u ((1/(1+Q)^(u-u_base) * M)

Net present value = NPV = S - K

Return on investment = ROI = S / K Note that indices (except year) have been dropped to simplify the presentation of results.

Break-even is the value of Z or M such that ROI = $1.00

Variables in the formulas:	Indices of variables in the formulas:
N = size of the target population	i = population type
A = percentage of target population by age and gender	j = geographic location
B = percentage of target population by race	k = age and gender category
a = asthma prevalence rate	e = race
X = estimated number pf persons with asthma	d = asthma severity
Y = utilization level without a program	p = outcome measure
W = unit cost of utilization	r = scope of services
Z = program impact (percentage decrease or increase)	s = cost perspective
C = expenditure per person with no program	t = study design
D = expenditure per person under a management program	u = year
F = program phase-in period to achieve full impact
M = program cost per participant
S = total program savings
K = total program cost
P = program participation rate
Q = discount rate
J = geographic adjustment factor
R = race adjustment factor