The Power of Clinical Strategies
to Reduce Costs: The
Unexploited Opportunity for
States as Healthcare Purchasers
Bruce Amundson, MD
President
Community Health Innovations, Inc.
There are two components of population-based initiatives: (1) wellness and
prevention efforts aimed at healthie2r lifestyles and reduced costs over the
long-term, and, (2) clinical approaches to deal more effectively with the
current disease burdens of the population. This latter effort can reduce
costs over a shorter term, and will be the focus of my remarks.
The central argument: The greatest opportunity to reduce
health costs is to change the way we provide care to the
sickest, most complex and most costly segment of the
population. There is wide-spread consensus on this
perspective among clinical leaders nationally.
Why is this and how can it be accomplished?
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Health Costs for any Insured Population
% Insured Pop.
Top 5%
Top 10%
Top 30%
% of Expenditures
1970
1980
50
66
88
55
70
90
1990
54
68
88
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The Clinical and Financial Profile of this 10%
Financial: depending on whether the insured group is made up of
Medicaid, Medicare or commercially-insured individuals, the cost
ranges from $30,000 to $150,000 per enrollee per year! (For
commercial groups the typical cost range is $35,000-45,000 per
person.)
Clinical: These individuals have complex health profiles, usually
representing one or more serious medical problems, accompanied
by behavioral issues (often depression), and commonly in a
framework of serious family problems. This is particularly the case
with Medicaid populations.
YET: 15 years into heath “reform” we are not dealing differently, in a
population-wide manner, with this 10%, than we were before.
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Bridging the Knowledge-Implementation
Gap
There is a huge gap between what we know how to do, what is being carried out in some places, and what is actually
going on with these complex enrollees in most state-sponsored health plans.
For example, many Medicaid programs have focused on “Primary Care Case Management” efforts where Primary Care
Physicians are given extra reimbursement to coordinate the care of patients. While a first step, the clinical
complexity of many/most Medicaid enrollees makes this role unrealistic. It is a relatively weak “care management”
strategy compared with strategies such as:
1. Multidisciplinary healthcare teams composed of nurse case managers,
mental health professionals, social workers and health educators. Working with
primary care physicians, they are able to ensure all health problems are
simultaneously and comprehensively addressed by bringing the broad range of
necessary clinical skills to the work with highly complex people and problems.
2. Case management: nurses trained in the role of helping individuals get the support and
assistance needed to address their health problems and navigate the non-systems.
3. Disease management: programs to assist patients in better managing specific diseases.
4. Integration of medical clinicians with behavioral clinicians, in the same locations. This assures
optimal and equal attention to physical and mental health problems, with much better results. This is the opposite
of “carve-outs” which fragment care and have less impact on cost containment.
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Sample Results from Better Care Mgmt.
Utilization of a Multidisciplinary Team with Medicaid Pts.
(per 1,000 enrollees per year): 1993 vs 1995
Pre-Care Mgmt Data
In-pt. Admits
In-pt. Days
ER Visits
201
817
859
Post-Care Mgmt Data
97
212
311
The work of the health teams was focused on the sickest 10% of
enrollees as determined by health risk assessments upon their entry
into the health plan.
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Sample Results (con’t.)
Healthcare Team impact on hospital utilization
by 65 complex patients, 2003, Maine
6 months before
team management
Hosp. admits
Hosp. days
ER visits
39
137
26
6 months
after team mgmt
15
54
21
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State Policy Options
1.
Purchasing strategy: require that contracting insurers
develop specific, state-of-the-art care management
services such as those discussed above.
2.
Further, require that these services be decentralized
into communities where the state has enrollment levels
that are large enough to justify the clinical programs.
This is in contrast to the approach of many insurers
currently where clinical staff (case managers, etc.) are
housed centrally in the urban offices of the insurers.
Experience has made it clear that, to be effective, the
clinicians need to be in the communities where both
the enrollees and their physicians reside.
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State Policy Options (con’t.)
3.
State purchasing programs (Medicaid; state
employees) could directly work to establish care
management services in communities across the state,
where ensured population sizes warrant. These
clinicians could then work with health plans and/or
physicians in the networks that care for statesponsored enrollees.
Each of these potential initiatives is designed to
expand the capacity and sophistication for care
management to improve care and reduce costs for the
most costly enrollees
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Observations and Summing Up
1.
2.
3.
4.
Most states are a decade behind in implementing contemporary
clinical care systems for the populations for whom they purchase
services.
States as purchasers have an immense potential to leverage
change and a severe need to modernize care systems to deal
with the massive cost issue for state governments.
Ensuring the presence of more state-of-the-art care management
systems would be highly relevant for: Medicaid families, special
populations with complex health needs (DD, disabled, etc.),
nursing home and potential nursing home occupants, and state
employees. The opportunities to reduce costs are huge.
Policy makers should support and empower their health program
administrators to innovate and lead in the development of
initiatives that can both improve care and reduce costs (an
attractive mix, since the improved care is what reduces costs.)
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