Anthem Insurance Companies’ Cost Benefit Analysis


This paper provides a cost and benefits analysis (CBA) and the evaluation of patient safety issue from the perspective of Anthem. In general, the problem can be affected by evidence-based education, which will improve the outcomes of care. It is estimated that the program implementation would costs $97,446. However, the total of all monetary and non-monetary benefits is $58,000,000. Thus, Anthem should proceed with developing a patient safety risk management system.

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Analyzing the monetary and non-monetary components of a program can help gain proper insight into a specific strategy. Issues with patient safety are significant for healthcare establishments because they entail many financial, ethical, and health outcomes risks. This paper aims to provide a cost and benefit analysis for the patient safety issue, discuss recommendations for Anthem, and evaluate the context of the proposed program.

Issue Description

Health establishments that neglect this component have a high number of adverse events, such as hospital-acquired infections and falls that cause injuries. While the issue in question primarily concerns health providers, Gruessner (2017) states that insurers across the US have been dedicating more attention towards preventative measures as a part of the value-based care model. In this way, Anthem will be able to reduce costs paid for insufficient care and avoid additional spending connected to secondary diagnoses. Thus, the organizational problem in question is patient safety and its impact on the reputation of Anthem as an insurer and its partner providers.

CBA Evaluation

The program that can help Anthem improve the health outcomes of its patients consists of an educational intervention for providers and their personnel that presents evidence-based data regarding approaches to improving safety in health organizations. The value proposition of this program is in the provision of information about basic safety principles, root causes of central issues, and strategies that can help improve safety (Kirkman et al., 2015).

Anthem will be able to affect the quality of the services provided by its partners on-sight through improved safety that will result in a more accurate diagnosis and mitigation of adverse hospital events. From the financial perspective, the insurer will help manage risks associated with malpractice lawsuits and costs for additional treatments in cases where a secondary provider claims reimbursement for hospital-acquired conditions (HAC) that were caused by a primary healthcare establishment.

According to the table in the Appendix, the estimated costs of this project are $97,446, while the benefit is $58,000,000. The primary financial investment that is requires from Anthem is the development of a web page that will help carry out online courses on patient safety, which is a startup fee and will claim $6,000 with annual maintenance price of $30,000 (“How much does a website for a business cost?,” 2019).

The payroll expenses for a healthcare professional who will oversee the process is $41,446 a year, while the training program development that consists of evidence-based practices and important information is included in the cost since this medical professional will be responsible for the program (“Average healthcare trainer hourly pay,” n.d.). No additional license expenses are required for this issue. All production materials are part of the price of the website startup, and no travel expenses will be necessary because the program will be launched via the Internet.

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The benefits include non-monetary aspects of patient satisfaction that should ensure that Anthem can retain its clients and gain more customers for its healthcare plans due to enhanced reputation of a value-based company that will result in a direct profit, which is estimated at $36,000,000 (“New study shows,” 2015). Patient safety will help the company save costs associated with diagnosing and treating HACs, which improves the efficiency of the existing processes and decreases production costs and is estimated at $3,000,000.

This calculation is based on the savings made by Adventist Health System (AHS) that implemented a similar initiative and was able to cut costs (“New study shows,” 2015). Increased production capabilities that are a result of the mitigation of a need to diagnose and treat HACs will benefit Anthem in the equivalent of $16,000,000 because providers will be able to work with more patients (“New study shows,” 2015). The contribution from investors is estimated at $1,000,000 based on the assumption that Anthem will be able to enhance its productions. Non-monetary costs include the reputation of Anthem as a reliable insurer, production time reduction, increased reliability and durability, greater customer base, which is estimated at $2,000,000 that can be received through additional sales.

The assumptions on which the cost and benefit analysis is based are the following. Firstly, it is anticipated that the majority of healthcare providers will participate in the program by encouraging their staff members to dedicate time to listen to the course on patient safety. Anthem will be able to inform its customers that it developed this program and thus emphasize value-based care.

The study by DiCuccio (2015) provides an assessment of risks associated with patient safety and states that a high chance of malpractice lawsuits exists in establishments with low patient safety indicators. The benefits were calculated based on the study conducted by the AHS, which includes 24 hospitals. Thus, it is anticipated that hospitals that will participate in the program will improve the quality and quantity of services provided to Anthem’s patients.

The focus of this program is on improving treatment outcomes as part of the value-based care program. The primary stakeholders are health providers that cooperate with Anthem because they will be able to enhance the quality of care and avoid additional financial spending associated with paying for hospital-acquired conditions. Moreover, patients will receive better services with smaller health risks of adverse events. Finally, as a stakeholder, Anthem will be able to have more clients that choose its services because it will be perceived as a reliable insurer that emphasizes safety. Based on these assumptions, it can be concluded that all participants of the program will be able to benefit from it and will be interested in the outcomes of the analysis.

CBA Recommendations

In general, based on the CBA calculations it can be concluded that Anthem will benefit from proceeding with the development of this program. The increased patient safety that will be achieved in at least 24 establishments that are Anthem’s partners will provide a total benefit of $58,000,000. Moreover, the company will be able to manage the financial and non-financial risks better and improve its key indicators.

Context for Recommendations

Strategies needed to influence the changes that would enhance patient safety include the participation of providers that work with Anthem on the reduction of HAC risks. Kirkman et al. (2015) and DiCuccio (2015) state that similar educational interventions not only improve the knowledge of physicians and nurses but also result in the adoption of positive behaviors that affect outcomes of hospital stay. Anthem will be affected as a whole because it will integrate this approach in its system since each provider will be able to access the developed resource.

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Relationship to Vision, Mission, and Strategy

Anthem aims to be a reliable provider that utilizes modern technology in its work to help patients. The vision of the company is to use contemporary approaches while the mission includes being a reputable health care insurer for its clients (“Mission, vision and values,” n.d.). The strategy involves continuous improvement of services that are offered to patients. Additionally, the insurer recently invested in the Quality-In-Sights program, that connects payments to the quality of services provided by the establishment (“Hospital quality and safety,” 2015). Thus, considering the CBA and this information, it can be concluded that enhanced patient safety aligns with Anthem’s strategic direction.


The recommendations are appropriate for the organization’s capacity and strategy because Anthem is a large company that works in different states of the US. Thus, a patient safety improvement initiative that will encourage providers to participate has to be easily accessible. The online strategy proposed in this CBA assessment will allow Anthem to avoid unnecessary spending connected to traveling and setting up seminars in each city while achieving the anticipated result of improved safety across the country.

Slawomirski, Auraaen, and Klazinga (2017) present data that can be used to evaluate external benchmarks, such as the spending of other healthcare establishments on safety measures and payments for adverse outcomes. Internal benchmarks will include the number of partners and their employees that participated in the program, and the source of this information is healthcare providers.


Overall, this paper provides an assessment of CBA for patient safety risk from the perspective of Anthem. Based on the evaluation, it can be concluded that the initiative will provide the necessary benefits to the company and its stakeholders. Moreover, it aligns with the strategic direction and current projects of Anthem and will help improve the reputation of the company, decrease the time of service provision, and increase the number of patients.


Average healthcare trainer hourly pay. (n.d.). Web.

DiCuccio, M. H. (2015). The relationship between patient safety culture and patient outcomes: A systematic review. Journal of Patient Safety, 11(3), 135-142. Web.

Gruessner, V. (2017). Top 4 ways payers could improve patient health outcomes. Web.

Hospital quality and safety. (2015). Web.

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How much does a website for a business cost? (2019). Web.

Kirkman, M., Sevdalis, N., Arora, S., Baker, P., Vincent, C., & Ahmed, M. (2015). The outcomes of recent patient safety education interventions for trainee physicians and medical students: A systematic review. BMJ Open, 5(5), e007705-e007705. Web.

Mission, vision and values. (n.d.). Web.

New study shows financial benefit of improving patient safety. (2015). Web.

Slawomirski, L., Auraaen, A., & Klazinga, N. (2017). The economics of patient safety: Strengthening a value-based approach to reducing patient harm at national level. Web.


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