Disease Management Models Fail To Show Cost Savings

Winston Churchill’s view of democracy is well known: “Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” Something similar might be said about fee for service health care. The system has frequently, and erroneously, been blamed for the the high cost of health care, ignoring the simple economic facts such as that you get what you pay for and there is no such thing as a free lunch. There have been multiple attempts at finding alternatives, such as the disastrous trend toward HMO’s which led to restrictions in health care availability while often leading to increased costs due to the increased bureaucracy. Other efforts, such as the disease management model, attempt to modify fee for service plans.

The Medicare Modernization Act of 2003 requires that the Centers for Medicare and Medicaid Services test a commercial disease management model in the fee-for-service program. A study in the November  3 issue of the New England Journal of Medicine entitled Results of the Medicare Health Support Disease-Management Pilot Program found no demonstrable savings. (If this report is not available to non-subscribers, there is a summary in Medical News Today). From the results:

The study included 242,417 patients (163,107 in the intervention group and 79,310 in the control group). The eight commercial disease-management programs did not reduce hospital admissions or emergency room visits, as compared with usual care. We observed only 14 significant improvements in process-of-care measures out of 40 comparisons. These modest improvements came at substantial cost to the Medicare program in fees paid to the disease-management companies ($400 million), with no demonstrable savings in Medicare expenditures.

From my personal experience, such programs when utilized by third party payers, typically based upon reviews of claims with zero knowledge of the actual patient, lead to the generation of large amounts of letters which quickly wind up in the trash due to their lack of applicability to the actual patient. Lately an increased number of payers have been paying to obtain further information on patients in their plans with the hopes of better managing their care. This leads to a small amount of additional income, more paperwork, but it remains questionable if this has any impact on health care.

The discussion included five reasons for the failure of the programs. I found two to be particularly of interest:

Second, the care of elderly, chronically ill patients is difficult to manage. They are much more likely than younger persons to have new acute conditions such as stroke, pneumonia, and hip fracture. Although each of the companies in our study intended to manage the care of the “whole person,” the health coaches were surprised by the number of health and psychosocial problems that were prevalent among Medicare fee-for-service beneficiaries.

Yes, the patients who account for the highest costs under fee for service plans account for these costs for a reason. They are sicker and are more difficult to manage. A nurse calling from an insurance company’s call center who has never examined the patient is not likely to know how the patient should be handled. Giving cook-book medicine recommendations based upon one diagnosis can often cause serious problems rather than be of benefit if all the other problems of that patient are not considered. Systems which do not provide adequate fee for service will lead to these sicker patients not being able to receive the amount of care they need.

Fifth, the health coaches were not integrated into the beneficiary’s primary health care team. This hindered their ability to interact directly with the beneficiary’s primary care provider and facilitate changes in medical care plans made by the primary care provider to mitigate deterioration in health status and avoid the need for acute care services.

Insurance company health coaches frequently have no idea as to why a patient is having problems or not responding to their physician’s treatment. Recommendations from such people are often worthless. Therapeutic failures might be due to a physician not following the proper treatment guidelines, but often the problem is that the patient does not follow their doctor’s advice. People often don’t follow medical recommendations because they cannot afford the medications needed, or afford the out-of-pocket expenses required for their health care. When insurance plans are operating with no coordination with the patient’s physician they are not going to be aware of the actual problems.  On the other hand, if these programs were better organized to take recommendations from the physician and work with the physician, as opposed to trying to tell the physician what should be done, they might be able to provide a service which actually does help the patient and lower management costs.

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  1. 1
    King Gonad says:

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  2. 2
    JUDI says:

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