Disease Management Programs
A Winning Strategy in Today’
Today’s Competitive Markets
Joe Marlowe
Senior Vice President
Aon Consulting
Radnor, PA
[email protected]
Agenda for Today’
Today’s Session
• Setting the Stage
• Basic Principles
• Health and Productivity’s Importance
• Health Behaviors and Chronic Diseases
• Health Management
• Absence and Presenteeism
• Success Indicators
“Full Service”
Service” Disease Management Components
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Population identification process
Evidence-based practice guidelines
Collaborative practice models including physician
Patient self-management education (primary prevention,
behavior modification, compliance/surveillance)
• Process and outcomes measurement, evaluation and
management
• Routine reporting feedback loop
Source: Disease Management Association of America
1
Why Disease Management?
Overall objective with disease management program is to bring
more value into the equation:
Health Care Value = Outcomes + Patient Satisfaction
Cost
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–
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–
–
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Coordinate patient care; health system navigation
Reduce expenditure for targeted persons
Increase worker productivity
Improve clinical outcomes
Improve functional status
Enhance patient satisfaction
Why Disease Management?
• 10% individuals spend 70% dollars
• 1% individuals account for 30%
• 33% expenses for preventable conditions
• 50% to 60% hospital admissions due to chronic conditions
Disease Management Debate
“There is insufficient evidence to conclude
that Disease Management programs can
generally reduce overall health
spending…The proposition that decreased
use of acute care services might offset the
costs of the screening, monitoring and
educational services in Disease
Management programs is clearly
appealing, but, unfortunately, much of the
literature on those programs does not
directly address health care costs.”
—Douglas Holtz-Eakin,
Director of the Congressional Budget Office
“Disease management is the only
remaining strategy to deal with chronic
diseases... Perhaps the greatest
contribution of Disease Management lies in
the fact that it has the potential to drive
change in the way we approach
healthcare. As a new concept in healthcare
delivery, Disease Management is pushing
the envelope in how we manage chronic
disease.”
—Warren Todd
Executive Director, Past President, and founding
Board Member of the Disease Management
Association of America (DMAA)
2
Disease Management Market Overview—
Overview—Summary
Industry Trend
Implications
1
Runaway medical costs continue to be the
central issue in healthcare
Plan sponsors are highly motivated to find cost
control solutions
2
The industry is increasingly focused on the
use of integrated interventions in controlling
cost
Standalone programs have limited future
potential
3
Disease Management (DM) attempts to
address gaps in the U.S. healthcare system
Payers are increasingly interested in managing
high cost members
4
The DM industry is evolving to a total
management focus
Disease Management is expanding beyond the
leading high cost chronic conditions
5
The DM market is still fragmented but a few
players have emerged as market leaders
Leading players are broadening their focus
6
There is a high level of difficulty in measuring
the financial impact of Disease Management
programs
The industry as a whole remains very skeptical
about the results of recent studies
Disease Management is seeing increased interest
7
Potential Value of Disease Management
1
2
3
4
5
Market
Market View
View of
of Importance
Importance
Utilization
Financial
Service/
Operational
Other
• Financial
impact on
medical costs
• Program
impact on
utilization
• Patient
education
• Clinical
indicators
• Participant
satisfaction
• Patient
empowerment
• Emerging
measures
• 12 Month ROI
• Aggregate
Savings
• ER Visits
• Hospital
Admits
• HbA1C for
Diabetics
• % Who Quit
Smoking
• Satisfaction
Survey
• % Engaged
• Call Center
• Provider
Satisfaction
• Ease of
Administration
Description
Measures
Clinical
Health Management Continuum
Health
Promotion
Staying Healthy
(70% population)
15% costs
Risk Factors
– Alcohol/tobacco usage
– Physical inactivity
– Poor nutrition
– Health history
– Unmanaged stress
– Inadequate self-care
Care
Management
Getting Better
(14% population)
25% costs
Acute Care
– Broken leg
– Kidney stones
– Pneumonia
Case/Disease
Management
Living w/Illness
(16% population)
60% costs
Complex Cases
– Transplants
– Cancer
– Trauma cases
Chronic Care
– Diabetes, asthma
– CAD, CHF, COPD
– Depression
3
Disease Management Purchasing
• Most government programs are still large scale RFPs
• The contracts are highly risk-based; contingent on performance
• Government purchases no-frills contracts
– Health promotion/wellness and utilization management often absent
• Business frequently split across multiple vendors
• Programs are no longer single disease focused
– Increasing awareness of co-morbidity management
• Government is exploring new intervention methods
• Government is working to customize programs to the needs of
specific geographies and individuals
Source: Chapter House, 2005
Managing Chronic Disease
• Identify problem diseases to target for management
•
•
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•
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•
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Plan your strategy
Identify and evaluate vendors
Develop innovative performance guarantees
Negotiate contracts
Communicate
Implement the program
Conduct ongoing performance measurement
– Clinical
– Financial
– Satisfaction
Identifying Problem Disease States w/Dx Analysis
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•
•
•
•
•
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Prevalence of chronic disease states in population
Prevalence of multiple co-morbid chronic disease
Unique members with a chronic disease
Cost implications for those with chronic disease
Drug costs for the chronic diseases identified
Clinical conditions driving large dollar claims
Identify “gaps” in care delivery / availability of programs
4
Case Selection
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•
•
•
•
•
Affects large number of population
Expensive to treat
Potential for serious complications
Avoidable complications
Measurable impact
Reasonable return on investment
Identify and Evaluate Vendors – Key Parameters
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•
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Program design
Scope of services/diseases managed
Clinical resources
Risk sharing/performance guarantees
IT/Technology
– Remote patient monitoring to gather clinical data coupled with “smart
system” intervention (e.g., scales, blood pressure, glucose monitors)
• Enrollment processes
• Communication
• Reporting
Essential Components for Successful Program
• Data driven identification and risk-stratification
– Predictive technology gives no insight into supportive environment for
targeted individuals
• Proven enrollment approach
– Readiness to change: engage person directly
•
•
•
•
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Proactive patient outreach
Participation incentives
Use of evidence-based treatment guidelines
Customized care plans to meet each patient’s unique needs
Management of co-morbid conditions
• Clinical, financial, and satisfaction outcome reporting
• Performance guarantees
5
Important Evaluation Steps
• Develop comprehensive RFP
• Incorporate your specific requirements
• Secure the necessary information from the vendors to address
your particular needs and expectations
• Prepare summary evaluations of selected vendors
• Develop selection criteria
• Complete site visits with finalists
• Provide data for analysis by finalists
• Select a partner(s)
Purchaser Cautions
•
•
•
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Most vendors sound the same
Have clear idea of program objectives
Get beneath vendor’s skin
Negotiate performance guarantees
Performance Guarantees and Contract Negotiations
• Guide the development and selection of meaningful
performance guarantees (clinical, financial, satisfaction)
• Craft risk and reward program that provides incentives to
advance your financial interest
• Secure the best possible terms and contract conditions
• Financial risk sharing less popular due to:
– Higher fee structure to cover reinsurance premiums
– Proven results make risk sharing less important
6
Member Communication – Critical Ingredient
• Identify audiences and challenges for reaching them
• Determine appropriate strategy and media
– Match messages to audience
• Not “Big Brother”
• Determine appropriate incentives for targeted groups
– Financial
– Non-financial
• Coordinate flow of information from the vendor and your
organization
• Monitor and refine communication plan, as needed
• Reinforce message periodically
Some Considerations
• Population-based approach to health management
– Wellness services to assist those at risk of chronic condition
– Coordination with case management resources
– Single person, single disease state management losing appeal
• Partner with local medical providers and community resources
• Behavioral health assessment and treatment
– Depression or chemical dependency as primary or secondary diagnosis
• Technology becoming increasingly important
– Online program educational materials (symptom advisor)
– Provider reports
– Patient profiles
Realities of the High Risk Population
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•
•
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Sicker than most DM vendors anticipate
More intensive management needed (higher intervention costs)
Need to tap into social services
More costly during early patient attraction phase
– Psychosocial (not pure medical) challenges
– Demands more social workers to be effective
– More costly engagement strategies (lack of phone numbers)
• With effective overtures, expect solid voluntary program
enrollment
– May require that >70% of targeted group enroll to give ROI
– High satisfaction demonstrates pent up demand for DM services
• Premium on speed of intervention
– Same day early alert for hospitalizations and discharges
• Role for face-to-face assessments
– Substitute for less expensive, traditional call center approach
• Role for local pharmacists
7
Importance of Healthy Behaviors
What
We
Know
About
Health
Behaviors
Mortality Risk Factors In The U.S.
Health
Services
10%
Heredity
20%
Environment
19%
Lifestyle
51%
Source: Centers for Disease Control and Prevention
8
70.2
46.3
14.5
11.7
10.4
Exercise
TobaccoPast
Glucose
Weight
19.7
Blood
Pressure
21.4
Tobacco
34.8
Stress
80
70
60
50
40
30
20
10
0
Depression
Percentage
Difference in Medical Costs - High vs. Low Risk
Source: Goetzel,JOEM, Vol. 40, No. 10 Oct. 1998
Economic Case for Health Management Programs
Costs Increase With Health Risk and Age
$12,000
$10,000
$9,221
$8,000
$6,664
$6,000
$4,000
$2,000
$10,095
3-4 Risks
$5,445
$3,432
$4,130
$3,601
$2,025
5+ Risks
$7,268
$2,741
$4,319
$3,366
$1,247
$1,515
$1,920
<35
35-44
45-54
0-2 Risks
$0
55-64
65+
Source: StayWell data analyzed by U of Michigan (N = 43,687) – HERO Study
Obesity – A National Challenge
• Considered of epidemic proportion
• 31% of adults and 16% of adolescents
• Metabolic syndrome contributes to risk of
serious disease
– Increased blood pressure
– Elevated insulin levels
– Excess body fat around the waist
– Abnormal cholesterol levels
• Physical inactivity and unhealthy eating
primary contributors
Source: National Center for Policy Analysis, May 2003; JAMA, 1999
9
Medical Costs and Risks by Body Mass Index
Annual Medical
Costs
$8,075
$7,758
$5,844
$8,000
$5,176
$4,214
$4,151
$6,000
$3,921
$3,239
$2,667
$2,000
$5,753
$5,079
$4,014
$3,579
$4,000
$4,611
$7,118
$6,667
$4,500
$4,760
$3,995
– > 35
$3,201
– 30-34.9
– 25-29.9
– < 25
$0
0 risks
+1 risk
+2 risks
+3 risks
+4 risks
Risk Level
Musich, Lu, McDonald, Champagne, Edington, AJHP.
18(3): 125 132, 2004.
University of Michigan Health Management Research Center
Impact of Weight Loss on Risk Factors
~5%
Weight Loss
HbA1c
1
1
Blood Pressure
2
2
Total Cholesterol
3
3
HDL Cholesterol
3
3
Triglycerides
1.
2.
3.
4.
5% - 10%
Weight Loss
4
Wing RR et al. Arch Intern Med. 1987;147:1749-1753.
Mertens IL, Van Gaal LF. Obes Res. 2000;8:270-278.
Blackburn G. Obes Res. 1995;3 (Suppl 2):211S-216S.
Ditschunheit HH et al. Eur J Clin Nutr. 2002;56:264-270.
Chronic Disease Linked to Obesity
• Cardiovascular diseases
• Diabetes
• Hyperlipidemia
• Gout
• Osteoarthritis
• Gallstones
• Cancers
Obesity accounts for 55-8% of direct medical costs
and leads to premature disability and mortality
Source: Cas Lek Cesk. 1997 Jun 12;136(12):367-72.
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Depression: “The Silent Cost Driver”
Driver”
• Depression can be triggered by a chronic disease
• Depression can be a marker for other conditions
• Research links depression to the later development of:
– Asthma
– Diabetes
– Heart disease
– Hypertension
– Obesity
– Stroke
Source: Centers for Disease Control and Prevention
Market Trends
• Many vendors have entered this market, but only a
few can offer the entire range of services:
– Lots of Health Plans, TPAs, HMOs, DM vendors, HRA and other specialty
vendors operate in this space
– Fair amount of purchasing, partnering, and outsourcing
• Some vendors have superficial offerings that lack design and
execution capability
– Participation rates
– Intensity of interventions
– Results
• Resist the temptation to generalize across vendors
• Learn to differentiate among vendors
• ROI less important than program design and execution:
– Vendors control ROI methodologies and calculations
– False expectations of high ROI savings
Vendor Differentiators
• Risk identification process (HRA tool,
assigning risk factors)
• Healthcare coaching model
(outreach, interventions, consistency)
• Track record on connecting and engaging targeted individuals
• Technology (portal, personalized programs, flexibility)
• Web content
• Integration with employer plans and vendors
• Participation incentives (ability to administer)
• Metrics
• Communications
• Future initiatives/enhancements
11
Disease Management Outcomes Measurement (ROI)
• New focus on utilization rather than pre-post cost analysis
– Unproductive debate about statistical biases for cost-based studies
• Chronic disease-related hospital admissions and ER visits
– ALOS and readmission rates
– Literature does not point to reductions in outpatient visits, pharmacy, etc.
• Question: “If there a sufficient number of avoidable admissions
to justify DM program fees?”
– Standard costs per avoidable hospital stay times potential reduction compared to
DM program fees
• Standard financial cost methods may overstate savings
• What are the savings assumptions used by your DM vendor?
– Are they specific to your unique population?
– High risk group ROIs may be less than commercial population
• Confounding variable: member turnover and deaths, multiple
conditions (diagnoses)
• Population risk adjustment of baseline and intervention
12