New York —

A new report by the Society of Actuaries validates budget impact models developed by the Peterson Health Technology Institute and advances methods to help purchasers, including health plans and employers, assess the value of digital health solutions.

Independent actuaries at the Society of Actuaries reviewed the methods and results of two PHTI budget impact models—those for digital solutions to manage Type 2 diabetes using non-continuous glucometers and virtual care for musculoskeletal conditions. For each budget model, the actuaries found PHTI’s methods and core assumptions can help payers and employers make evidence-based decisions when combined with actuarial methods.

Using actuarial data and methods, the analysis estimated the impact of these solutions on payers’ total costs of care. The SOA results were consistent with PHTI’s findings, including that digital diabetes solutions generally increase spending, while virtual musculoskeletal solutions have the potential to replace in-person care at lower costs.

Digital health companies included in PHTI assessments regularly submit estimates of their return-on-investment (ROI). These analyses vary in methodological rigor and reliability. Digital health purchasers seek credible estimates about how these technologies impact healthcare spending. The SOA analysis offers a playbook on how payers can approach these estimates using actuarial methods and engage actuarial professionals earlier in their process.

“The Society of Actuaries’ research demonstrates the value PHTI’s rigorous evaluation framework brings to the rapidly moving digital health sector,” said Caroline Pearson, executive director of PHTI. “Combined with actuarial insights, PHTI’s research helps payers make informed decisions about digital health technology based on their clinical and economic effectiveness.” 

PHTI budget impact models are a precursor to actuarial estimates, giving payers a sense of magnitude and directionality of the spending impact. Actuarial methods go further to help plans estimate their per member per month costs, based on their membership mix and utilization patterns.

Read the full report here: https://www.soa.org/resources/research-reports/2024/impact-technology-healthcare/