Alabama Medicaid Reduces Costs for Asthma Care With AHRQ Tool

January 2011

As a result of attending the January 2008 AHRQ "State Health Care Quality Improvement Workshop," Alabama Medicaid officials used the Asthma Return-on-Investment Calculator to evaluate the asthma care management component of a 2-year pilot project. The workshop was sponsored by "Quality Diagnostic Tools for States," an AHRQ Knowledge Transfer project.

The AHRQ workshop provided hands-on training in using the calculator, a tool that helps estimate the financial benefits of asthma quality improvement programs. The calculator combines information from the professional literature with real-world data about patients to estimate the net impact of an asthma care quality improvement program.

The Alabama Medicaid team held discussions with both AHRQ staff and the tool developers throughout 2009 to determine what information would capture variables such as asthma-related ancillary costs, outpatient visits, and prescription utilization. Alabama's Medicaid officials were also selected as beta testers of the HTML version of the tool.

Stephanie Lindsay, an Alabama Medicaid Administrator and primary user of the tool, says, "Once we determined the procedure codes, the National Drug Codes, and the costs for each of the variables to enter on the baseline page of the calculator, the process of entering data was not difficult. We were very fortunate to have AHRQ and Thompson Reuters available whenever we had questions."

In July 2010, Alabama Medicaid staff calculated the return on investment for the case management portion of its "Together for Quality" initiative, known as Q4U, which is an effort to transform Medicaid by making it easier for health care providers to access and use information about patients. The program also allows State agencies and providers to share information.

As a result of the initiative, the return on investment for the case management participants was found to be $1.04, or 4 percent-a break-even point. This figure led staff to look for ways to reduce this cost. According to Alabama Medicaid estimates, a reduction in cost of 30 percent could result in a return on investment of $1.30, representing an increase in return from 4 to 30 percent.

The calculator is part of AHRQ's State Snapshots.

Impact Case Study Identifier: 
AHRQ Product(s): Asthma Return-on-Investment Calculator, Quality Diagnostic Tools for States
Topics(s): Chronic Care: Self-Management, Policy, Quality
Geographic Location: Alabama
Implementer: State of Alabama
Date: 01/01/2011
Page last reviewed October 2014