The term "disease management," coined just six years ago, is rapidly being absorbed into the language of mainstream healthcare.
So quick is the growth of disease management--means of care that encompasses a variety of ways of controlling and treating ongoing medical conditions--that a new report issued by the Institute for the Future, a Menlo Park, Calif.-based think tank, predicts its distinction as an unusual approach to healthcare soon will vanish. Instead, the report suggests, it "simply will be part of the care process," one more model for the general delivery of care.
"(The use of disease management) is in toddlerhood right now," says Al Lewis, executive director of the Disease Management Purchasing Consortium in Newton, Mass. "We're past the high-risk newborn stage. We're starting to develop a personality, and we're starting to be taken seriously."
Better quality care is the most obvious benefit of a well-run disease management program. Although the approach hasn't yet proven it is markedly more effective in treating every medical condition, several disease management firms have presented clear evidence that their participation in treatment has averted hospital stays, increased patient compliance with self-care recommendations and resulted overall in happier patients.
Still, despite this success, disease management has continued to get a bad rap in some circles: From a bottom-line point of view, it's not clear that its expense justifies its practice. Many disease management administrators answer that concern with confidence. They say costs per enrollee can be, and already have been, significantly reduced.
Cardiac Solutions, a disease management firm based in Buffalo Grove, Ill., says it can deliver net medical cost savings of 20% to 30%, depending on the condition it targets. In a program that focused on 4,933 Humana patients with congestive heart failure, the firm's participation resulted in net savings of at least 30%, says Peter Smith, chief executive officer of Ralin Medical, parent company of Cardiac Solutions. Before subtracting the program's operating cost and the firm's fees, total medical expenses for patients in the program fell $33 million over two years, a 52.6% reduction in costs.
The savings came largely from the firm's efforts to educate patients and to alert physicians to any problems as early as possible, Smith says. Both approaches represent a big part of the company's marketing pitch. "We don't want anyone to think we're getting cost savings by reducing care, and we don't want (the patients) to think we're using them as guinea pigs," he says.
A simple example of the value of education is that once patients in the program learned too much salt presented a danger, they cut their daily sodium intake to 2,223 milligrams from a pre-enrollment intake of 3,062 milligrams.
In general, disease management steps in where most doctors leave off, typically because doctors lack the time and wherewithal to provide further care. Disease management was developed to solve the problems inherent in treating people with chronic medical conditions, such as diabetes or heart failure. Their care is complex, as they usually present with numerous symptoms and must be seen by more than one physician. A common result is treatment that is ill-coordinated, with dangerous gaps or unnecessary overlaps. The purpose of disease management is to ensure that someone is tracking the entire scope of a patient's care, weeding out what's unnecessary and adding what's missing.
The way such programs work is by having a medical professional--usually a nurse based in a central call station--who can act as a case manager or coordinator of
care. The case manager's job is to track patients' health through regular phone calls or e-mail, to teach patients how to take better care of themselves and to tell patients when they need to see a doctor. When necessary, the case manager also contacts a patient's doctor to report any significant change in the patient's condition. Many disease management firms educate physicians as well, showing them ways to improve quality of care.
The potential financial impact of better management of chronic medical conditions is great. The report issued by the Institute for the Future shows some 105 million people in the United States suffer from at least one chronic condition, costing the country's healthcare system an estimated $503 billion annually.
While some programs boast great results, the industry of disease management is not old enough as yet to show its full return on investment, says William Thar, M.D., medical director for 9-year-old Franklin Health, based in Upper Saddleriver, N.J., one of the nation's oldest disease management firms.
"To be effective," Thar says, "disease management must be patient-centered and fairly low-cost. It needs to improve the connections between patients and physicians, not just intervene."
Al Lewis negotiates disease management contracts for the purchasing consortium's 40 members, which include several large health plans. He says that independent disease management firms dominate the field. Twenty-seven firms, which he declined to name, are "truly fine," he says, but the other 130 "shouldn't have given up their day jobs."
Generally, the best companies guarantee a certain level of savings, Lewis says. Some large physician groups and hospital systems are engaged in limited efforts of their own. Risk-bearing groups lead the way. Small groups and individual doctors have been slower to adopt disease management strategies.
Santa Clara County IPA in San Mateo, Calif., has 800 doctors and 130,000 capitated HMO patients. In 1997, looking for quick payoffs, it established disease management programs for patients with congestive heart failure and asthma.
The asthma program was launched in-house. The IPA's allergists were prepaid and eager to back the effort, says Larry Bonham, M.D., the IPA's president and CEO.
But the IPA didn't have the resources to start up the program that addressed congestive heart failure, so LifeMasters, a Newport Beach, Calif.-based disease manager, was hired to do the initial development.
Both programs are running fine, Bonham says. The IPA ended its contract with LifeMasters in December. Bonham says while LifeMasters is a good company, he felt the IPA could do better on its own once the program was in operation.
Without a middleman, "we expected we would get better feedback from the patients," he says. "And what's more, at that point an in-house program could be cheaper, more flexible and better integrated into the IPA's operations."
About 150 patients are enrolled in the congestive heart failure program. They send daily reports on weight, blood pressure and other clinical measures to the IPA through a device attached to their home telephones. Nurses review the information on a secure Internet site and follow up with patients or, if necessary, directly with their physicians.
It's too early to know how successful the IPA's own effort has been. Compared with two years ago, before the program was started, hospital days have fallen at least 20%, Bonham says. Total impact on costs hasn't been evaluated, but Bonham says costs for specialty physicians have dropped significantly. Other payoffs are clear. After enrollment in the program, 93% of patients say they better understand their conditions; 88% feel more confident taking care of themselves.
"A lot of groups would like to do something similar, but it takes a lot of capital," Bonham says. "Given the market and the challenges, many groups are going to find the resources are not available. Also, they may be strapped in terms of having the skill sets internally."
To justify the investment necessary for running in-house disease management programs, Bonham suggests groups should have at least 100,000 patients under risk-sharing contracts. Those with at least 30,000 capitated patients might benefit from contracting with an outside company if they have the cash, he says.
The IPA's disease management programs use an Internet communications platform known as Health Buddy, developed by Health Hero Network of Mountain View, Calif. Health Buddy offers access to an Internet site, home-telephone devices and applications for patient screening, which must be customized by each provider. It charges $50,000 for setup and $100 per patient.
Steve Brown, president and CEO of Health Hero Network, says doctors all over the country are interested in disease management but are held back by lack of reimbursement for outreach services. Still, he believes that ultimately doctors will be the biggest providers of disease management because they are closest to patient care. "With the right tools, any medical group in this country can offer disease management," he says.
Lovelace Health System, New Mexico's second-largest provider and a subsidiary of Cigna, takes near-total financial risk for the care of 233,000 people. It has developed 19 disease management programs during the past six years, which are called episodes of care, or EOC, and range from programs for pediatric asthma to lower-back pain.
Clinical and financial results vary widely from program to program, says Neal Friedman, M.D., medical director at Lovelace Healthcare Innovations, the system's EOC arm. In some cases, overall cost savings are impossible to determine, he says, particularly when targeted conditions require treatment from many layers of the healthcare system. Diabetes is one example. In such cases, better quality, not lower cost, is the greatest return.
In other cases, programs do not succeed in reducing costs, although they improve quality. One example is the pediatric asthma EOC. Although the roughly 225 children in the program have been hospitalized half as often as they were previously, their outpatient needs grew proportionately. Before participating in the program, each child's asthma-related claims averaged $1,120 per year. After, that amount increased to $1,165. However, Friedman says, "we expect over time our return on investment will improve."
Friedman's expectation is based on more than wishful thinking; many programs earn increasingly higher financial returns over time because, along the way, valuable lessons are learned. Greensboro, N.C.-based Accordant Health Services initially met resistance from the physicians it contacted. Eventually it realized the problem was not with its concept of disease management but with the way physicians were contacted. Accordant is unusual in the disease management field because it targets 14 rare conditions, such as lupus and cystic fibrosis.
Initially, Accordant sent doctors a brief letter introducing the company and explaining simply that one of the doctor's patients had been enrolled in its program. Now, the company describes its objectives and activities in detail.
Doing so gives physicians the information they need to decide whether the company will be intrusive or helpful, says Steve Schelhammer, Accordant's president and CEO.
"Shame on us for not realizing this immediately, but physicians have gone through a lot with managed care that has made them skeptical," Schelhammer says. "We didn't fully appreciate the magnitude of that dynamic."
After four years of operation, Accordant is experiencing a surge in growth. It now has nine contracts covering 7 million people, and its enrollment has leaped from 1,000 patients in July of last year to 6,000.
A reduction in hospitalizations is the easiest way to measure the program's impact on costs, Schelhammer says. Across all conditions, the hospitalization rate of patients in Accordant's programs has dropped 53%. Because of poor claims data, a broader evaluation is difficult, he says. In a study involving 120 patients, however, Accordant recorded a 43% reduction in total claims costs for a net savings of at least 20%.
Disease managers say physician support is vital to their success. Like Accordant, many have learned they need to be cautious in their approach. Brian Scullion, M.D., chief medical officer of Vida Healthcare, a cancer disease management company based in Minneapolis, says he once used the term "cost-effective" in a meeting with physicians. "Their cooperation was zilch," he says.
Scullion now emphasizes quality. "This program is not about cost-effective care. Does it deliver cost-effective care? Absolutely. But this is about delivering the right care. If I focus on quality, the cost will follow," he says.
After two years in operation, Vida manages 2,000 patients for health plans in New England and Chicago. It doesn't have final outcomes data yet, but other quality measures show promise. For example, 68% of patients with Stage 1 or Stage 2 breast cancer received lumpectomies compared with the national rate of 50% to 60%. Of 31 patients surveyed, 90% judged the program "excellent" or "very good"; the remainder rated it "good." Based on early financial results, Scullion says he expects a financial return on investment for health plans of 2.5 to 1 after one year.
After five years in business, Smith of Cardiac Solutions says his company has learned a lot about how best to educate patients. Early on, home assessments came complete with a load of advice and reading materials. But the company realized patients were overwhelmed by the information, so it switched gears and began to provide one-to-one education on the phone. "We found nurses could get better results (that way) because patients tend to concentrate more on the telephone," Smith says. "Rather than trying to do a lot in one sitting, we discovered we can do more in pieces over time."
Smith says he expects someday to see the company's $40 million in annual revenues grow to $100 million. Cardiac Solutions manages care for 10,000 people with cardiovascular disease, chronic obstructive pulmonary disease, congestive heart failure or diabetes-all frequent comorbidities-in contracts with 30 health plans.
"There were days when we were in talking to customers and they said, 'What do you do?' Now they say, 'Show us your outcomes,' " Smith recalls. "That was a long and painful time. This has been a very enjoyable period."