The more you know about this strategy for improving quality and decreasing the cost of care, the better off your patients will be.
Fam Pract Manag. 1998 Oct;5(9):44-49.
First, here’s a short quiz. Disease management (DM) is best described as which of the following?
A methodology for managing the complex processes of illness in a coordinated way, using teams and information systems to improve health status and quality of life as well as to eliminate unnecessary costs.
A shrewd strategy by the pharmaceutical industry to increase drug sales.
The latest external review mechanism in managed care meant to cut costs.
A way for specialists to increase their referrals at the expense of primary care physicians.
Wall Street’s latest investment darling.
All of the above.
If you answered “all of the above,” you’re probably close to the right answer.
DM interests many people for many reasons, not the least of which is its rank as the fastest-growing sector of the health care industry. (Based on vendors’ revenue estimates compiled by the Disease Management Purchasing Consortium, a Weston, Mass.-based DM brokerage and strategy firm, total industry revenue is likely to exceed $150 million this year and $300 million in 1999.) About 1,000 people attended this year’s Disease Management Congress, sponsored by the National Managed Health Care Congress and held in (where else?) Pasadena, Calif. Those participants were about equally drawn from entrepreneurial DM firms, DM firms owned by pharmaceutical companies, managed care plans, outcomes research departments of integrated delivery systems, single-specialty medical groups and the government. Proponents of DM see opportunities galore, and some have an almost messianic enthusiasm about what DM can deliver.
For family physicians, DM may appear to be the enemy, at least in economic terms. If a DM program’s tightly coordinated care proves to be more cost-effective for health care plans, that’s where they will direct patients rather than to you. This is more than a potential threat. Pharmaceutical companies, telephone advice and triage companies, firms focusing on rare diseases and large health care organizations all are offering DM, and health care plans are finding it hard to say no. If you’re part of a large health care system, you need to know about the kinds of programs that your organization may be developing in competition with outside entities. And if you’re in a smaller private practice, you need to think about how you can incorporate the principles of DM into your own practice to help you maximize quality and minimize cost. The second part of this series will present concrete advice about how to go about doing just that in a small practice.
Why is DM necessary?
Clearly, the DM marketplace is heterogeneous, but what proponents of the approach share is a set of assumptions about what ails the American health care system: that medical practice is fragmented and uncoordinated; that physicians too seldom know proven treatment protocols or ensure that their patients follow the right regimens; that caregivers don’t teach patients adequately or at the right times; and that all this adds up to wasted human capital, unnecessary morbidity and excessive health care spending. DM is their solution.
There’s a lot at stake. The buyers and users of DM programs tend to be the entities at financial risk, the managed care organizations (MCOs) whose profits have fallen so dramatically recently. They’re implementing DM to reduce excess variation in practice patterns and thereby save money. According to John L. Roglieri, MD, MBA, corporate medical director for NYLCare Health Plans Inc. in New York and the author of a paper describing NYLCare’s DM program for congestive heart failure (CHF),1 informing doctors of best practices isn’t enough.
“Guidelines don’t work when it comes to CHF and ACE inhibitors because we’ve found significant variation in CHF treatment practices and drug usage despite established, published guidelines,” he says. “Despite the considerable reported benefit of ACE inhibitors in the treatment of CHF, the literature tells us that fewer than 35 percent of heart-failure patients are being treated with these agents appropriately, which translates into unnecessary hospitalization. We felt another approach was called for.”
Why disease management should matter to you
It’s simple: A disease management (DM) program may take better care of your patients than you do, and for less cost. If you don’t develop a “DM mind-set,” you may not only fail some patients, you may also lose them (see the section “DM and family physicians”).
What does DM involve?
DM appears to be moving beyond theory and rhetoric into a period of intense implementation. Most disease managers recommend a population-based approach, meaning that patients with costly chronic conditions (such as diabetes, CHF or asthma) should be identified by their diagnoses or illness groupings at the level of plan enrollment, if possible. However, most patients are recruited into DM programs after claims data indicate that the patients have been treated for a particular illness. Regardless of when patients are identified, the primary objective of DM is early intervention with education or adjustments to treatment. Typically, DM programs involve these components:
Telephone surveys of patients with the target condition to assess their level of risk and problems with current treatment or medications,
Distribution of patient education materials,
Follow-up telephone monitoring by case management nurses,
Outcomes profiles or other feedback for physicians (although this component isn’t as consistent as family physicians might like).
Everyone agrees that DM is a data-and information-intensive endeavor. Computers, databases, statistical analyses and an informatics infrastructure (e.g., telecommunications, local and wide area networks, and web sites) are essential to the success of large-scale DM, regardless of the condition being managed. Opinions begin to diverge about who should be doing it.
DM for hire
Some of the biggest players in the DM industry are the outsourcing companies — DM firms for hire. The most influential of these are divisions of pharmaceutical firms or their spin-offs, companies including Stuart Disease Management Services Inc. (a division of Zeneca Holdings Inc.), Merck-Medco Managed Care LLC and SmithKline Beecham Health-care Services. In concert with the pharmacy benefit management (PBM) companies their parent organizations own, these firms market DM programs to the largest health insurers and MCOs, such as Aetna U.S. Healthcare and Blue Cross and Blue Shield. Merck claims that its diabetes programs will save a health care plan 9 percent of its total diabetes-related costs, or about $267,000 per 1,000 diabetes patients annually.2 Not surprisingly, drug companies’ DM programs tend to target conditions that are treated with each firm’s products.
Dan Barco, MD, a family physician and medical director of WellPath Community Health Plans in Chapel Hill, N.C., says it’s difficult for a health care plan not to sign up with DM companies like these. “The structure offered by these firms allows us to implement disease management programs with very little up-front investment, and the programs usually result in enough savings to cover their cost from the start,” he explains. “It’s very difficult for a plan of our size to develop a program in-house with the same level of service without exceeding the cost of the programs developed by the outside companies.”
In addition to having the infrastructure, some DM firms affiliated with big drug companies have access to pharmacy data from their wholly owned PBMs, and they can merge this data with data about plan enrollment and physician encounters to produce detailed utilization profiles for each patient and doctor, at least in markets where a plan’s patients are enrolled in the same PBM. Why would drug companies give away their valuable pharmacy data to health care plans? Part of the drug makers’ agenda is to help ensure that patients receive educational materials or counseling aimed at getting them to take their medications correctly and consistently. Although this is good for the patients, it’s also good for the drug companies: They sell more drugs, and by improving patient adherence, their PBMs become more marketable and profitable.
DM by telephone triage firms
DM firms outside the pharmaceutical industry are a mix of influences and currents. One recognizable segment comes from the telephone triage business. Seattle-based CareWise Inc. was founded by nurses and started as a nursing call center and medical triage company. The firm markets itself as an “invisible partner” and extension of the health care plan, and it has recently branched out into proprietary patient education and medical guidelines, thereby moving closer to the DM mainstream. That CareWise recently was acquired by Nashville, Tenn.-based PhyCor Inc. shows the value that the nation’s largest physician practice management company (PPMC) sees in having an in-house DM capability.
Access Health Inc., based in Broom-field, Colo., also started as a call-center firm and now boasts more than 3 million subscribers among its health care plan customers nationwide. It markets DM programs for asthma, diabetes and emergency services and is paid exclusively on a per-member, per-month basis.
Another interesting segment of the DM field includes the so-called “rare disease” management companies. Here are some examples:
Hemophilia Health Services in Nashville, Tenn., offers a range of services directly to patients who have clotting disorders and their families.
Renal Disease Management Inc. of Youngstown, Ohio, is a physician-owned and -operated company specializing in the care of patients with end-stage renal disease. In addition to offering dialysis centers and nephrology practices, the firm helps IPAs implement clinical guidelines, contract with MCOs and develop physician networks.
Accordant Health Services Inc. in Greensboro, N.C., is a company backed by venture capital that specializes in managing what it calls “high impact, low frequency” chronic diseases, such as cystic fibrosis.
Houston-based Inpatient Medical Services P.A. is a hospitalist and medical-management firm owned and operated by intensivists. It offers DM services for high-risk ICU patients and those with multiple diagnoses.
DM by provider organizations
The number of DM programs being home-grown by provider organizations is also increasing rapidly, and these programs reflect an even greater diversity of style, content and methodology than out-sourced DM. Not surprisingly, the most highly developed DM initiatives come from provider organizations that share risk and are involved in performance-based contracts.
Elliot Sternberg, MD, medical director of Bristol Park Medical Group in Irvine, Calif., and vice president for clinical quality at St. Joseph Health System based in Orange, Calif., has overseen the development of DM programs for obstetrical care, asthma and diabetes. He says these initiatives have significantly improved quality (as measured by adherence to NCQA standards) and have led to three years of cost reductions by giving the group solid, physician-specific information on C-section rates, drug and test compliance rates, and utilization of hospital and emergency services.
Also in California, staff- and IPA-model HMO groups affiliated with Med-Partners, a PPMC based in Birmingham, Ala., are testing a diabetes DM program. It includes the use of scannable diabetes progress notes that feed information into a database. Martin Coyne, MD, director of disease management for MedPartners, credits use of the scannable notes and the diabetes database with increasing HbA1c screening compliance by 40 percent and improving patient satisfaction.
But “the applicability of this kind of program to communities where capitation is a small part of physician reimbursement may be limited,” Coyne says. “In those communities, success in disease management will depend more on physician culture and championship of the concept than on economic incentives.”
Indeed, doctors and nurses leading DM programs in areas not dominated by large MCOs and capitation consistently say the key to success is getting primary care and referral physicians to buy into the concept of DM early in the process of setting up the programs. This can be very difficult to achieve since the economic interests of primary care and referral physicians may conflict in fee-for-service practice and since those in primary care often don’t trust DM programs that filter patients and refer them to specialist groups.
DM is also being implemented with success in hospital-based ambulatory care. Over the last year, Hartford Hospital in Hartford, Conn., has been implementing an impressive, homegrown DM program involving emergency department (ED) use and inner-city Hispanic patients with asthma. “We developed a comprehensive asthma education program,” says Scott Wolf, MD, director of ambulatory medicine at Hartford Hospital. “Each patient gets a home assessment and an environmental evaluation to identify high-risk triggers in the home. We have a bilingual, bicultural nurse educator who conducts all the teaching sessions as well as monthly support-group meetings at a local community center.”
Thus far, asthma-related ED utilization has decreased 47 percent, admissions for asthma-related care have decreased 71 percent and the patients have seen improved functional status and quality of life. Unfortunately, “compliance is still an issue that we struggle with, despite having a bilingual educator,” Wolf says. Forty-six percent of the patients dropped out of the program during the first year.
DM and family physicians
Health care plans and purchasers of health insurance (e.g., employers) generally view DM favorably and would like to see it grow. But unless DM programs are developed by doctors for use by their own patients, DM essentially introduces a third party into the physician-patient relationship, and this raises a number of thorny issues. The implications for family physicians are important — and not all favorable.
DM programs have developed in part because segments of the clinical care process — such as close follow-up after starting therapy and between-visit monitoring of key physiological data — have fallen through the cracks of a fragmented health care system. In this regard, DM programs may supplement a busy family physician’s practice and help coordinate his or her patients’ care. But at least some of the duties of disease managers and DM companies substitute for the family doctor’s traditional role in managing chronic illnesses. There’s a slippery slope down which DM can slide, from supporting your directives to replacing your personal care. Family physicians should be mindful of how this transition is taking place and whose medical advice is directing care. Is a DM entity practicing medicine when its agents use patient information from pharmacy and laboratory databases to advise patients how and when to take their medications? When an MCO’s DM program carves out certain patients and directs them to a group of referral physicians to coordinate their care, is the family physician still those patients’ doctor?
Concerns about the privacy and confidentiality of patient information used in DM should also catch the family physician’s eye. As health care information proliferates and becomes more granular — that is, as ever-smaller details about an individual’s health care can be captured in information systems and used in future care-related decision making — the value of that information increases. At what point does the disease managers’ use of confidential patient data stop being health care and start being marketing?
In at least one case that gained notoriety, that line apparently was crossed when Landover, Md.-based Giant Food Inc. and drugstore operator CVS Corp. in Woonsocket, R.I., teamed up to send prescription drug information about Giant Food’s employees to Elensys Inc., a database marketing firm in Woburn, Mass.3,4 Elensys used the information from the employees’ pharmacies to send personal letters on pharmacy letterhead, paid for by drug companies, reminding customers to refill prescriptions. This is a classic function of DM, but the patients also received mailings promoting other drugs from those companies, targeted to the patients’ conditions. The result was a flood of complaints from Giant Food’s employees about what they perceived to be a violation of their confidential medical data. To Giant Food’s credit, the company suspended the program and apologized to its employees.
Finally, there are certain to be legal issues surrounding decisions brokered by DM companies. If harm comes to a patient, the legal ramifications of a DM relationship that ties payer, health care plan, pharmaceutical company and physician together are by no means clear. For example, to what extent will family physicians whose patients are enrolled in DM programs be liable for alleged accidents or malfeasance by DM nurses and case managers?
The potential fraud and abuse implications of DM are also unclear. The Department of Health and Human Services’ Office of Inspector General has a special interest in kickbacks received for increased Medicare or Medicaid business. Is a drug company’s involvement in a DM program — which includes complex fee arrangements among several provider entities and may influence the formulary decisions of participating MCOs — an example of a kickback? And how are family physicians enmeshed in these relationships simply by virtue of their patients being in the programs?
These very real concerns only accentuate the need for family physicians to develop similar or perhaps even better systems for managing populations of patients with common conditions in their own communities. The tools and technologies for provider-based DM programs are available and within the reach of many small practices. In the second part of this series, we’ll examine the skills, tools and technologies for DM programs based in family practices, and we’ll look at the experiences of physicians who have found creative ways to integrate DM into their practices.
Referencesshow all references
1. Roglieri JL, Futterman R, McDonough KL, Malya G, Karwath KR, Bowman D, et al. Disease management interventions to improve outcomes in congestive heart failure. Am J Manag Care. 1997;3(12):1831–1839....
2. Tanouye E. Drug makers’ PBM strategy produces uneven results. Wall Street Journal. Feb. 11, 1998:B-4.
3. O’Harrow R. Giant Food stops sharing customer data. Washington Post. Feb. 18, 1998:A-1.
4. Blanton K. CVS will halt drug mailings. Boston Globe. Feb. 19, 1998:E-1.
Copyright © 1998 by the American Academy of Family Physicians.
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