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Is There a Business Case for Diabetes Disease Management?
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Is There a Business Case for Diabetes Disease Management?

Stanton R. Mehr
Disease management programs, particularly for diabetes care, have been part of managed care benefit offerings for roughly 20 years. They are offered by nearly every health plan, whether commercial, Medicare, or Medicaid. Most experts would acknowledgethat disease management programs can improve the health of patients with chronic disease. However, little reliable, reproducible information is available to answer the question of whether these programs are cost saving.

Back to the Beginning

With the evidence in hand that tight glycemic control can prevent long-term complications of diabetes mellitus1,2 and the ability to measure and monitora person’s blood glucose levels at a moment’s notice, a new medical concept and burgeoning industry spawned in just a few years. In 1991, the Boston Consulting Group characterized this as disease state management,3 and described it as a new way for the pharmaceutical industry to prove (and enhance) the value of its medications. Soon after, pharmaceutical companies like Pfizer and Zeneca Labs began their own disease management programs,3 shopping them to the health plans and insurers.

The health plans realized that the disease management process represented a workable way to improve clinical outcomes and health status over an entire population of patients and codified a way to broadly conduct and promote secondary prevention. Furthermore, disease management programs were acknowledged to be a type of quality improvement (QI) process, which helped managed care plans fulfill QI requirements for accreditation from the  National Committee for Quality Assurance. However, they had a choice of whether to contract with these pharmaceutical company–sponsored providers, work  with independent start-up disease management organizations (eg, Diabetes Treatment Centers of America [which later became Healthways] or Cardiac  Solutions [which later became Healthways]), or start their own internal programs.3

Over time, pharmaceutical company programs became burdened with concerns regarding conflict of interest and were soon outpaced by independent vendors and health plan–sponsored programs. The concept, in any case, took off. By 2006, disease management programs were part of every managed care organization’s portfolio of benefits fits: a survey by the Boston Consulting Group revealed that 96% of health plans had disease management programs.4 In  2010, one source reported that 21% of patients with at least 1 chronic disease were in a disease management program.5 Today, the domestic disease management market is $2.1 billion, but should grow significantly in 2014 (once health reform increases the size of the market for covered eligibles).6

The Poster Child of Disease Management

Although disease management can be applied to many chronic diseases, diabetes has been a prime target. Diabetes mellitus is highly prevalent, it results in tremendous costs (a significant portion of which are preventable), and it can be easily measured. The programs’ interventions also were well suited for QI: patients can be tracked, their pharmacy claims can be assessed for adherence, and their outcomes can  be quantified, in terms of glycated hemoglobin (A1C) levels, clinical events, and use of medical resources (including emergency department [ED] and  hospitalization).

According to the Care Continuum Alliance (formerly the Disease Management Association of America), the principal components of disease management programs include7:

• A method of identifying populations requiring secondary prevention

• Standards of care according to evidence-based practice guidelines

• Collaborative practice models to include physician and ancillary healthcare providers, including case managers and nurses

• Patient education on how to selfmanage their condition and change unhealthy behaviors

• A process for measuring outcomes, evaluating the effect of interventions, and managing the program

• Routine reporting and feedback loop to providers (which include communication with patients, physicians, health plan, and ancillary providers, and practice profiling)

Generally, patient interactions are through nurse call centers and are focused on health education and reminders.

Clear Economic Outcomes Are Elusive

These components were common to most first-generation disease management programs, and though they sounded like potent tools to contain costs and  improve outcomes, their effect on outcomes was not generally impressive. Even when quality measures were demonstrated to improve, the savings did not necessarily follow.

A retrospective study of 2 years of claims data from an integrated healthcare system found that patients with diabetes enrolled in their disease management program had average claims of $394.62 per patient per month compared with $502.48 per patient per month for those with diabetes but not enrolled in the  program.8 According to the researchers, the system saw a return on investment (ROI) of 2.23:1 (that is, $2.23 of savings accrued for every $1.00 invested);  others question this result based on the cost calculation.9 Furthermore, this magnitude of savings could not be demonstrated by others. This was  accompanied by modest—but statistically significant—reductions in hospital admissions and inpatient days.

In 2003, a study of HealthPartners’ diabetes disease management program determined that accrued savings over 10 years in this program would amount to only $75 per patient with diabetes.10 An analysis of Independence Health Association’s diabetes disease management program showed that it cost more money than it saved.10

Linden11 studied historical data of several chronic disease management programs. He performed an analysis (based on the number needed to decrease, as opposed to number needed to treat) to calculate the decrease in hospital visits (ED visits and hospital admissions) necessary to provide an ROI in the  program. This analysis revealed that a decrease in admissions of 10% to 30% would be needed just to cover the costs of the program.11

It would seem then  that the cost savings related to diabetes disease management programs are lower than expected, and the ROI is very much in question. A number of reasons  for this may exist.12

Patients Identified Too Late. The use of predictive modeling programs that were available for use in first-generation programs did identify patients with type 2 diabetes who were at risk of increased expenditures and adverse health events, but that was because they had already occurred. As mentioned earlier, disease management programs were designed as secondary prevention programs, meaning that eligible patients were already subject to repeat ED visits or hospitalizations, and were already being treated (perhaps not optimally). As a result, these algorithms did not do a good job detecting patients who had high glycemic levels who had not yet incurred high costs (their primary, costly event, such as inpatient admission).

Comorbid Disease States. Patients with diabetes are at high risk for multiple comorbidities, including chronic kidney disease, hypertension, coronary heart disease, stroke, and others. A first-generation disease management program, which focused on the diabetic condition only, may improve some outcomes but not necessarily the comorbid clinical status. More recent disease management programs and population health models are patient-focused, rather than disease-focused, and are likelier to address the other related comorbidities.

Dependence on Call Center Management. The use of nurse call centers to deliver education and reminders to members is intuitively a positive aspect of disease management programs, but without other integral components, call center management has not been shown conclusively to significantly influence  member education or to change members’ behavior. Much educational information is already available on the web. Furthermore, the physical distance between the call center and the patient creates a barrier to familiarity, trust, and continuity of communication.

Member Behavioral Self-Change. The program’s success depends on patients’ long-term adherence to the medication and exercise regimens prescribed by  their doctors. This often requires incentives of some type. In first-generation programs, health plans did not necessarily coordinate disease management  activities with formulary access (eg, to improve patient access to appropriate medications through lower cost sharing). This is also not a universal feature of  today’s programs (coordination is particularly difficult in this respect with external program vendors).

Member Turnover. In addition to these factors, discontinuity in program participation may also pose a significant barrier. Related to annual turnover in  health plans, the patient may be disenrolled in their previous plan’s disease management program, having to enroll anew with their new plan’s provider.

First- Versus Second-Generation Disease Management Programs

The greatest evolutionary differences in first-generation disease management with today’s programs are (1) the move away from a single-disease focus to a patient focus, which could address multiple disease comorbidities in 1 program; (2) the improved use of data and access to information through the medical  record; and (3) the addition of incentives to induce patients to adhere to the medical regimen and providers to offer quality care.

Diabetes is not truly  separable from its related disorders; obesity often leads to insulin resistance, which damages pancreatic beta cells, and results in type 2 diabetes.13 Patients  with diabetes have high risks of hypertension, coronary disease, and cerebrovascular disease.14 Therefore, disease management programs that account for  hese risk factors take a more holistic approach than firstgeneration programs that attempted to focus on improving glycemic levels only.

The quality, comprehensiveness, and interoperativity of electronic health records are considerably better today than in the mid-1990s. Today’s information technology systems allow for better integration of pharmacy claims data, medical records, and laboratory data, which enables greater analysis and facilitates  improved care coordination. This is critical to the concept of patient-centered medical homes and accountable care organizations.

The current generation of  disease management programs have gone beyond a call-center focus, and have experimented with offering inducements to patients to adhere to their  edical regimen. This can be found in valuebased insurance design approaches,15 which may include reduced copays for medications for those in disease  management programs or discounts for gym memberships. 

Health coaching is also a popular addition to disease management programs today, as is a multidisciplinary approach to care teams16—hence the broader scope of “care management” programs, which may rely on case managers in addition to physicians as central coordinating personnel.

The Business Case for Diabetes Disease Management

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