Published by: Substance Abuse and Mental Health Administration

This technical paper demonstrates the use of @RISK to model six different types of preventative interventions that HMOs might consider to reduce health care costs. The preventive services discussed are:

1. Prenatal and infancy home visits for high-risk mothers
2. Targeted cessation education/counseling for smokers
3. Targeted short-term mental health therapy
4. Health promotion through self-care education
5. Presurgical education intervention with adults
6. Brief counseling/advice to reduce alcohol use

The models are spreadsheet-based and include the various factors (input variables) that drive the costs of each intervention, such as professional labor and supplies. Each model includes estimates of the number of probable users, unit of service per user, and price per unit. Monte Carlo simulation was used to estimate the variability of each input variable and combinations of inputs.

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Palisade Corporation is a software developer that produces decision support tools for professionals in many lines of work. The company was founded in 1984, and at present more than 400,000 people use Palisade’s software in fields that range from finance to oil and mineral exploration, real estate to heavy manufacturing, and pharmaceuticals to aerospace. Its software is used by many Fortune 500 companies, including Shell Oil, Procter & Gamble, ExxonMobil, Chase Manhattan, and by prominent economic and financial consultants.