Patient-centered Management of Complex Patients Can Reduce Costs Without Shortening Life

Published Online: February 01, 2007
Latanya Sweeney, PhD; Andrew Halpert, MD; and Joan Waranoff, MBA

Objective:To determine the effect of intensive patient-centered management (PCM) on service utilization and survival.

Study Design: Prospective cohort study of 756 patients in California who had a life-limiting diagnosis with multiple comorbid conditions (75% were oncology patients) and who were covered by a large commercial health maintenance organization from February 2003 through December 2004.

Methods: Group membership determined assignment to the PCM cohort versus the usual-management cohort after blindly screening for clinical complexity. Both cohorts accessed the same delivery system, utilization management practices, and benefits. Intervention was intensive PCM, involving education, home visits, frequent contact, and goal-oriented care plans.

Results: Roughly half (358) of the 756 patients received PCM. Fewer PCM oncology patients elected either chemotherapy or radiation (42% increase over usual-management oncology patients). PCM patients had reductions in inpatient diagnoses indicative of uncoordinated care: nausea (-44%), anemia (-33%), and dehydration (-17%). PCM patients had utilization reductions: -38% inpatient admissions (95% confidence interval [CI] = -37%, -38%), -36% inpatient hospital days (95% CI = -35%, -37%), and -30% emergency department visits (95% CI = -29%, -31%). PCM patients had utilization increases: 22% more home care days (95% CI = 20%, 23%) and 62% more hospice days (95% CI = 56%, 67%). Overall costs were reduced by 26% (95% CI = 25%, 27%). Patients' lives were not shortened (26% of PCM patients died vs 28% of patients who received usual management) (P = .80).

Conclusion: Comprehensive PCM can sharply reduce utilization and costs over usual management without shortening life.

(Am J Manag Care. 2007;13:84-92)

  • Patient-centered management (PCM) can change patient behaviors and environments otherwise known to negatively influence care or yield additional healthcare expense.
  • Comprehensive PCM in this California HMO involved education, home visits, frequent contact, and goal-oriented care plans for seriously ill patients.
  • Patients receiving PCM had fewer inpatient admissions, hospital days, and ED visits, more home care and hospice days, and a reduction in expenses.
  • Satisfaction was very high among patients who received PCM.
  • Comprehensive PCM can deliver more coordinated, cost-effective care than traditional management, with no adverse effect on survival.

"Complex patients" have clinically advanced illness and multiple comorbid disease states. They are among the most expensive cases in healthcare.1 The prevalence is 1 per 1000 in the commercially insured population and likely 5- to 10-fold higher in the Medicare population.2,3 Clinically appropriate hospice and home care services, available at significantly lower cost, can reduce expense, but decisions must be part of a holistic care plan individualized for each patient.

Patient-centered management (PCM) is an emerging, comprehensive patient-focused collaboration that includes end-of-life and pain management, education, provider coordination, and patient advocacy.4 It emphasizes the selection and coordination of services from the patient's perspective and considers all of the patient's circumstances. Patient-centered management should organize patient care sufficiently to avoid unnecessary hospitalizations and emergency department (ED) visits. Patient education should yield patients who are likely to make different treatment decisions.

Managed care organizations seem best positioned to use PCM with complex patients and healthcare providers,5 but the economic benefits of PCM are not clear. Throughout the 1980s and 1990s, managed care sought to deliver quality, cost-effective healthcare by managing utilization and costs of services.6-10 Today, many managed care organizations concentrate on "case management," which includes the identification and coordination of plan benefits and ancillary services.11 Case management tends to focus on services, whereas PCM focuses on the broader context of the patient. The key question addressed in this study is whether PCM can reduce utilization costs in complex patients compared with case management, without sacrificing life span.

An advantage of PCM is its ability to change patient behaviors and environments otherwise known to negatively influence care or yield unnecessary healthcare expense. For example, the World Health Organization made a strong case that medication adherence relies on patient information, motivation, and behavior, and that limitations and confusion in patients' medication knowledge often lead to increased healthcare expense.12

Prior work showed that patterns of hospice use by older Medicare beneficiaries were consistent with the system of care and not necessarily with appropriate need and preference, leading to underutilization.13

A common approach to disease management involves outsourcing management to vendors, each servicing 1 condition. Many complex patients have more than 1 disease, and therefore multiple managers. Prior PCM approaches coordinated these services and reduced fragmented care.14,15

Researchers showed that patient education, care coordination, and end-of-life management lowered costs and increased satisfaction without sacrificing mortality in patients who were coping with advanced illness and preparing for the end of life.16

Earlier work that attempted to prove the effect of case management on utilization and costs in other populations either lacked a control group,17 depended on crude comparisons,18 used only limited ad hoc resources as a proxy for management,17,18 or had been limited to examine only 1 form of utilization.19-21 The goal of this study was to evaluate the efficiency of care (measured by utilization of all key healthcare resources) and patient outcomes through the application of professionally delivered case management and PCM techniques.


Study Design, Materials, and Resources

This study used a prospective cohort design with an "intent-to-treat" analysis to measure the performance of PCM compared with usual case management in a large health maintenance organization (HMO).

HMO Population. Candidates belonged to a large not-for-profit HMO. The average monthly HMO membership was 1 245 611 during the study period (February 2003 through December 2004). HMO membership consisted of 2 comparable groups (group A and group B) who had access to the same benefits (copayments, deductibles, coverage policies), network of providers, and HMO approval process. Group A averaged 447 541 members enrolled through governmental agencies. Group B included other employer groups and individual members and averaged 798 070 members. Comparing all health claims in the entire HMO population in 2002 (the year before the study), no significant sex, age, disease mix, or hospitalization differences appeared between these groups.

Blinded Patient Screening. Three sequential levels of screening identified study subjects as those candidates having appropriate illness complexity and management needs. Level 1 used an automated computer filter, level 2 used an experienced nurse to review patient records, and level 3 used an experienced nurse for telephonic interviews. Subjects were those patients whose cases passed all 3 levels of screening. Appendix A provides a detailed description of the screening process (available online at

Group Assignment. Once candidates passed screening, their health plan membership determined their membership in the intervention cohort (named "PCM" for those receiving PCM in addition to usual case management) or in the control cohort (named "UCM" for those receiving usual case management only). Throughout the screening process, the health plan membership (group A or group B) of candidates was unknown to remove incidental bias.

Although this design may appear to lend itself to cohort bias based on nonrandom assignment of subjects, cohort similarities justify the approach (see the HMO Population section above and the Results section below), and there are benefits to this approach (see the Study Analysis section).

Usual Case Management (Control). All subjects, regardless of cohort, received the same UCM from the HMO. This consisted of traditional episodic, telephonic coordination of services; the same clinical management criteria and process for approvals; the same benefit design (copayments, deductibles, coverage policies) and utilization management practices; and the same physician care plans available using the same criteria and process. The same primary physicians within the HMO handled all referrals.

Patient-centered Management (Intervention). An independent, for-profit program3 with 13 years of experience provided PCM. Each patient in the PCM cohort had a complex-care team consisting of (1) a care manager, who provided on-site assessment and ongoing contact; (2) a team manager, who coordinated team reviews and provided liaison with the health plan; and (3) a physician in active clinical practice, who provided the team with information on the medical care of the patient, anticipated the patient's medical problems, and was available to contact the patient's treating physician to clarify care issues and suggest alternative care plans in support of the treating physician's plan. Care and team managers were registered nurses with an average of 18 years of nursing experience. The team did not provide medical treatments or home care, or authorize or deny any medical services.

All consenting subjects received an initial home evaluation by a care manager to establish goals. A goal addressed a care domain weakness, where care domains were disease knowledge, treatment plan, terminal care planning, benefit plan management, family and living environment, pain and symptom management, and provider support. (Appendix A further describes the care domains.)

During weekly meetings, team members reviewed patient status, developed strategies to accomplish goals, and tracked progress. Team members placed telephone calls to patients, to providers, and to the health plan on behalf of patients. Management ended when patients achieved those goals established at the beginning of management. A patient achieved a goal by demonstrating proficiency (eg, verbal description of condition, or establishment of a hospice plan).

Utilization Dataset. A database stored services covered by the HMO. Fields included sex, age, 2-digit ZIP (or postal) code, cohort label, and the number of inpatient admissions, hospital days, ED visits, home care days, rehabilitation facility visits, skilled nursing facility admissions and days, and hospice facility admissions and days. For subjects in the PCM cohort, a field stored the total number of days of management. At the conclusion of data collection, a field stored decedent death times.

An independent company in the business of making privacy certifications under the Health Information Portability and Accountability Act (HIPAA) examined the dataset and certified it as satisfying both the scientific standard of HIPAA and HIPAA's Safe Harbor Provision for de-identification.22 Similarly, the dataset qualified for exemption under institutional review board guidelines.

Lifespan Assessment. Privacert, Inc, a for-profit data mining company,22 identified decedents and their dates and places of death by matching subject information to death records, death notices, burial records, and other publicly available death data. Data were summarized, anonymized, and then forwarded for academic analysis.

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