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Bundled Payments for Diabetes Care and Healthcare Costs Growth: A 2-Year Follow-up Study
Sigrid Mohnen, PhD; Caroline Baan, PhD; and Jeroen Struijs, PhD
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Bundled Payments for Diabetes Care and Healthcare Costs Growth: A 2-Year Follow-up Study

Sigrid Mohnen, PhD; Caroline Baan, PhD; and Jeroen Struijs, PhD
Disease management programs for diabetes care based on bundled payment did not slow down the cost growth. Multimorbid adult patients with diabetes had largest cost growth.

Objectives: In the Netherlands, disease management programs (DMPs) for chronic diseases were formerly financed by fee-for-service payments supple­mented by management fees (MFs). To stimulate diabetes DMPs nationwide, a bundled payment (BP) system was implemented alongside the existing system. We assessed the effects of diabetes DMPs and related payment systems on healthcare costs growth.

Study Design: We had access to all Dutch health claims data in order to study, in a longitudinal-retrospective design, the nationwide BP experiment. To the best of our knowledge, we are the first to study the differentiation between 2 alternative payment schemes for DMPs.

Methods: To answer our research question, we used the curative healthcare costs (sum of general practice costs, hospital-based specialist care, and pharma­cy) from 64,011 adult patients with type 2 diabetes of 3062 different general practitioners (GPs). We performed multi-level regression analyses with differ­ence in costs of 2008 to 2009 as the dependent variable, adjusting for baseline costs, age, sex, and comorbidity.

Results: Results showed an increase of €172 ($219) per patient in curative healthcare costs and an additional increase of €287 ($366) per patient enrolled in BP DMPs from the first to the second year after implementation. The cost increase in the MF group did not differ from the care as usual. Cost increases did not vary between GPs or insurers. We found that an increase in costs was much more likely for multimorbid adult patients with diabetes.

Conclusions: The BP model was associated with increasing cost growth, at least in the star t-up phase.
The healthcare systems of western countries face the in­creasing challenge of providing high-quality care while simultaneously keeping their healthcare systems afford­able and accessible. In many countries, including the USA and the Netherlands, integrated care in combination with payment reforms are increasingly seen as the main tools in meeting these challenges. The aim of all payment reforms is to establish the financial alignment of care providers in order to enhance the quality and continuity of integrated care, while simultaneously slowing down the growth of costs. One such payment reform in the United States that is targeting primary care is the Alternative Quality Contract (AQC).1 Research has shown that patients of primary care physicians enrolled in AQC showed a slower cost increase than patients in the control group.2,3 In the Netherlands, integrated care for chronically ill patients is organized similar­ly into disease management programs (DMPs) (see eAppendix 1 for more information [eAppendices available at www.ajmc. com]). In the Netherlands, DMPs were introduced 2 decades ago, but a nationwide establishment of DMPs was hampered by a fragmented Dutch funding system.

In order to eliminate these financial obstacles, in 2007, the Minister of Health, Welfare and Sport approved the introduc­tion of a bundled payment (BP) system for diabetes care, to be implemented on a 3-year trial basis (2007-2009). Under this BP system, health insurers paid a single fee to a principal contract­ing entity—a new legal entity called a care group—to cover all the elements of primary diabetes care for patients with diabetes. These provider-led integrated care organizations are comparable to accountable care organizations in the United States. The care groups play an active role in supporting and coordinating the contracted diabetes services between the subcontracted provid­ers. This managing role manifests itself in activities like the ar­rangement of multidisciplinary consultations with subcontracted care providers and the drafting of multidisciplinary protocols based on the Dutch Diabetes Federation Health Care Standard.4 These protocols create clarity for all care providers and establish which healthcare providers are to deliver which items of care, as well as what criteria of referral and back-referral should apply (eAppendix 1).

The concept of the Dutch care groups is comparable not only to the AQCs in the United States, but also to the Clinic Commission Groups in England because of their partial shift­ing of the commissioning role from the insurers to the provid­ers.5 Furthermore, the Dutch BP system seems comparable to the US episode-based payment systems because of its BP char­acter. However, there is a fundamental difference in focus: the Dutch BP model aims to strengthen primary care, thus avoiding hospital-based care utilization, whereas the US BP model starts with a hospital admission and focuses on inpatient costs and the hospital discharge period, with the aim of reducing the number of readmissions. For general practitioners (GPs), some reasons to participate in these groups included the potential for quality improvement, strengthening their position and the future role of primary care in the healthcare system, and the financial incentives of the BP model. However, not all insurers were in favor of the BP system since these insurers were of the opinion that commis­sioning must be exclusively done by insurers. Consequently, these insurers set up an alternative payment system for diabetes DMPs. In this alternative system, doctors were still paid according to the former pricing mechanism for DMPs, which reimbursed provid­ers for the provision of direct healthcare on a fee-for-service ba­sis, supplemented by a management fee (MF) for the care group. The MF covered the costs of activities other than the direct pro­vision of healthcare, such as overhead costs, benchmark infor­mation and communication technologies, and the coordination of the delivery of the integrated care.

In addition to BP and MF payment for diabetes DMP, diabetes care was also provided on a fee-for-service (FFS) basis without any additional fees; in this case, the care provided was not part of an organized DMP; it was considered care as usual (CAU). Between 2007 and 2009, it was up to the GPs to decide whether or not to join a care group. In 2010, BP was introduced as the standard payment system for DMPs, and currently, most patients with diabetes are enrolled in a BP-based DMP.

Although the BP system was structurally implemented in 2010, the scientific evidence behind the BP system is still lacking, most probably because it is difficult to separate the effects of DMP from the effects of BP. Initial studies suggested that the intro­duction of the BP system for DMPs improved the delivery of diabetes care,6 and resulted in slight to modest improvements in patient outcomes (eg, systolic blood pressure and cholesterol levels).7 The effects of the BP system on cost growth are, howev­er, still unknown. At the time of implementation, the BP group might have, on average, the highest patient healthcare expenses. This is because the BP fee of approximately €400 per year may exceed the sum of the fees of separate diabetes healthcare ser­vices of the CAU group. However, it is expected that BP will result in cost savings both in the short and the long run.

In the long run, the improved quality and continuity of care within the primary care setting should lead to more patients with well-controlled diabetes. Subsequently, fewer patients would need to utilize ambulatory specialist care or inpatient care, resulting in cost reductions in specialist and hospital care in the middle or long run. However, BP may also lead to short-term cost savings. BP stimulates task delegation and relocation from more expen­sive secondary care toward less-costly primary care with concom­itant instant cost reduction. Next to that, BP stimulates the intro­duction of a uniform IT system, which may decrease unnecessary duplicated services, which, in turn, may lead to cost reductions in the mid-term as well. The present study examined whether diabe­tes DMPs, and related payment reforms, in particular, resulted in a slowdown in the growth of costs in the Netherlands.

Our research questions are formulated as follows: 1) How do the curative healthcare costs of diabetes patients develop over time? 2) What is the effect of DMPs on the growth of curative healthcare costs for diabetes patients? 3) What is the effect of BP on the growth of curative healthcare costs for diabetes patients?



Our analyses were based on 2008 to 2009 health insurance claims data, which were obtained from Vektis, the healthcare informa­tion center in the Netherlands. Vektis collects and manages health claims data from all Dutch insurance companies on all healthcare procedures covered by the Dutch basic statutory insurance pack­age, including the costs for compulsory deductibles.8 Vektis data also contain personal information on the policyholders, including date of birth and gender. Due to data restrictions, we were not able to perform this analysis with data from 2006 and 2007 be­cause the quality of the hospital cost data were not guaranteed. The coverage rates of Vektis databases in 2008 and 2009 were 83% and 92%, respectively, of all insured people living in the Netherlands, and the data quality of these years was good. We selected 64,011 cases from about 700,000 patients with diabetes living in the Netherlands with complete and reliable information, which were continuously enrolled by the same GP during 2008 and 2009 (eAppendix 2).

Study Population

We distinguished 3 groups of patients with type 2 diabetes: 1) the BP group—patients registered with GPs enrolled in DMPs and participating in care groups paid by BPs; 2) the MF group— patients registered with GPs enrolled in DMPs paid by a sup­plemented MF; and 3) the CAU group—patients registered with GPs not enrolled in DMPs and paid on an FFS basis. Table 1 summarizes the assignment procedure (eAppendix 2).

Curative Healthcare Costs

Cost data were confined to the curative healthcare costs re­imbursed under the basic statutory insurance package and the compulsory deductibles paid by the patients. Curative healthcare costs were defined as the sum of the general practice costs (con­sultation fees, capitation allowances, costs for practice nurses, and costs for integrated care [ie, BPs or MFs]), costs of hos­pital-based specialist care (outpatient costs, day-patient costs, and inpatient costs), and other curative costs (pharmacy, medical aids, physiotherapy, exercise therapy, speech therapy, occupation­al therapy, dietetics, patient transport, and mental healthcare) per patient. To enable meaningful cost comparisons between years, we adjusted all healthcare costs using the consumer price index­es published by Statistics Netherlands. All costs reported in this study were adjusted to real prices in the 2010 reference year (de­flators employed for 2008: 1.0258 and for 2009: 1.0134). The results are presented in euros (US dollars).

Statistical Analyses

To answer our research questions, we performed several regres­sion analyses, where the dependent variable was the difference in curative healthcare costs between 2008 and 2009. To answer the first research question, the cost difference, controlled for cura­tive healthcare costs of the baseline year 2008, is presented. The costs of the 2 years were not likely to be statistically independent.

To assess the cost effects of DMPs of any kind in compar­ison to the CAU group (research question 2), we performed a regression analysis, without making a distinction between DMPs reimbursed by BP or MF. We performed a multivariate regression analysis in which the BP group and the MF group was combined and compared with the CAU group (the reference group), while considering patient characteristics as confounding variables.

Finally, to investigate whether the payment system affects the cost growth (research question 3), we compared the 2008 to 2009 cost increase of patients from the BP group and MF group with patients from the CAU group (reference group). In all analyses, we adjusted, at the patient level, for age (measured in years and centered on the mean of 67.6 years), gender (1 = male, 0 = fe­male), and the number of additional chronic conditions (0-16). The Anatomical Therapeutic Chemical classification was used to detect additional chronic conditions9 (eAppendix 3).

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