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The Case for Decoupling Chronic Disease Care From Insurance and Restructuring How We Pay for It

The American Journal of Accountable Care®September 2019
Volume 7
Issue 3

For many Americans, chronic care is not integrated or effectively managed by insurers. Another entity should be designated to bundle this care inexpensively.

Berwick and colleagues’ vision of the Triple Aim foresaw achievement of its goals through assigning responsibility for a population to an “integrator.” It was thought that an insurer would be best situated for this role, but with 45% of those aged 19 to 64 years either uninsured or underinsured, a significant portion of chronic disease care is not paid for by insurers. This article proposes that chronic disease care amenable to streamlining and inexpensive pricing be decoupled from the insurance system, with designation of an alternative integrator to administer a Registry+Bundle. This integrator would acquire and distribute, at a low cost, the medications necessary to manage a disease for a given population.

The American Journal of Accountable Care. 2019;7(3):26-29In an influential 2008 Health Affairs article, Donald Berwick, MD, MPP, FACP, and colleagues introduced the Triple Aim: “improving the individual experience of care; improving the health of populations; and reducing the per capita costs of care for populations.”1 In their vision, these goals would be achieved by recognizing “a population as the unit of concern” and assigning responsibility for that population to “an ‘integrator’ able to focus and coordinate services to help the population on all three dimensions at once.”

Ideally, Berwick et al said, that integrator would be an entity “such as Kaiser Permanente, [that] has fully integrated financing and either full ownership of or exclusive relationships with delivery structures, and…is able to use those structures to good advantage,” but the “role might [also] be within the reach of a powerful, visionary insurer; a large primary care group in partnership with payers; or even a hospital, with some affiliated physician group.”

As CMS administrator, Berwick presided over accountable care organizations and other payment models that applied the Triple Aim to Medicare beneficiaries. In their 2008 article, Berwick et al used the example of congestive heart failure (CHF) as a chronic illness as one upon which “an integrator would act differently, assigning much more value and many more resources, for example, to the monitoring and interception of early signs of deterioration.” Remarkably, the rate of hospital admissions for CHF among the Medicare population has dropped from 2222 per 100,000 in 2001 to 1364 in 2015.2

But the picture is much different for diabetes, a condition afflicting many Americans not eligible for Medicare. Hospital admissions for short-term complications in the adult population have increased, most notably in the group aged 18 to 64 years: from 52.6 per 100,000 in 2000 to 92.3 in 2015.2 Hospital admissions for long-term complications of diabetes among those aged 18 to 64 years increased from 78.3 per 100,000 in 2000 to 92.0 in 2015, while dropping significantly in the Medicare population.2 The pattern is similar for amputations and end-stage renal disease incidence: improvements in the Medicare age group but flat or worsening numbers for the nonelderly population, with negligible improvements or backsliding in the first 2 years of coverage under the Affordable Care Act (ACA).

The premise of this article is that a significant portion of the disparity between advances in CHF care and retrogression in diabetes care can be attributed to differences in insurance coverage between the elderly and nonelderly populations. Americans 65 years and older are covered by Medicare. About one-third of Medicare beneficiaries are enrolled in managed care plans, and of those in fee-for-service Medicare, only 19% lack supplemental coverage to cover cost sharing.3 Only 12% lack prescription drug coverage.4 Nearly one-third of beneficiaries enrolled in Part D prescription drug plans receive low-income subsidies that reduce cost sharing, and half of Part D plans offer coverage before the $415 deductible is met. In short, conditions are favorable, if not quite ideal, for the management of chronic conditions.

The situation is different for the nonelderly population. Of adults younger than 65 years, 12.4% remain uninsured, but in the judgment of The Commonwealth Fund, fully 45% of those aged 19 to 64 years are “inadequately insured.”5 The Commonwealth Fund counts as underinsured those whose out-of-pocket costs equal 10% or more of household income, individuals living under 200% of the federal poverty level (FPL) whose out-of-pocket costs equal 5% or more of household income, or those whose insurance deductible is 5% or more of household income.

The Commonwealth Fund finds that “more people who have coverage are underinsured now than in 2010, with the greatest increase occurring among those in employer plans.” According to the Kaiser Family Foundation 2018 Employer Health Benefits Survey, “Over the past five years, the average annual deductible among all covered workers has increased 53%. Forty-two percent of covered workers in small firms and 20% of covered workers in large firms are in a plan with a deductible of at least $2000 for single coverage.”6

Health advocates’ principal concern with these developments has been that those who are uninsured or underinsured “report cost-related problems getting care and difficulty paying medical bills.”5 But there is an additional and equally serious problem. I argue here that insurers covering the population younger than 65 years are unable to effectively integrate care because high deductibles leave consumers on their own for too much of the management of their chronic conditions—both because front-end care is not covered and because the deductibles make insurance financially unattractive to many consumers, leaving them uninsured. As a society, we have the tools to make deadly chronic diseases manageable: They represent the very archetype of high-value care yet too often go unused.

This article urges achievement of the Triple Aim for the uninsured and underinsured living with chronic conditions by designating an alternative integrator to organize care that is not paid for by insurers. Although a prominent policy option to address this problem is the elimination of cost sharing through adoption of generous single-payer or “Medicare for All” programs, this article proposes an option that accepts the current insurance system and legal regime as they exist today. I do so because the parsimony of existing insurance cost-sharing designs can in one sense be taken as a virtue—it challenges us to devise integrated care within very spartan cost constraints.

A Registry+Bundle for Chronic Care

When Berwick et al spoke of a “population” for which an integrator could be held accountable, they did not limit the concept to those enrolled in a health plan; indeed, they suggested that a “registry that tracks a defined group of people over time would create a ‘population’ for the purposes of the Triple Aim,” giving as an example “all of the diabetics in Massachusetts.” A registry is an appropriate entity around which a more inclusive alternative to integration by a health plan could be structured.

The population with diabetes is an appropriate starting place for conceptualizing this alternative because anecdotal evidence suggests that many consumers with diabetes have felt forced to funnel scarce healthcare dollars directly to the day-to-day expenses of managing their illness,7 forgoing the purchase of insurance.8,9 According to Bloomberg, pharmaceutical manufacturer Sanofi has said that about 10% of patients purchase its insulin in cash.10 An analysis of National Health and Nutrition Examination Survey data finds that 10% of nonelderly participants with diabetes remained uninsured after ACA implementation,11 which is roughly the proportion of other nonelderly Americans. This could suggest that individuals with diabetes do not perceive any more value in insurance offerings than do average Americans.

It is important to note also that undocumented immigrants and those below the poverty line in non—Medicaid expansion states cannot access ACA insurance. Further, about a quarter of low-income adults experience change or gaps in insurance coverage annually due to “churning.”12 For these populations, an alternative integrator is a must.

Our goal should be to provide integrated chronic care to both the uninsured and underinsured, with a cost below the average deductible amount for single coverage in employer-sponsored insurance ($1350). I propose a collaboration among stakeholders outside the insurance sector that could include physicians; nonprofit hospitals that are required to undertake “community health improvement” activities to meet community benefit requirements; philanthropies, entrepreneurs, or existing businesses that have historically been content to operate with low margins; and, ideally, state governments, which purchase care for employees and Medicaid recipients and also are traditional protectors of public health (Table).

Imagine that a consortium of such actors maintained an aggregated registry of patients with diabetes, which, like other chronic disease registries, tracked whether patients are current on evidence-based care, but also paired it with a bundle of all the services (eg, care coordination support) and medications necessary to manage the disease for this population. Critically, the entity would acquire or manufacture and then distribute medications to patients, rather than leaving them on their own to fill prescriptions at the mercy of for-profit pharmaceutical companies. This registry and treatment bundle would represent Christensen and colleagues’ ideal of a focused “value-adding process” business model addressing a defined problem in a straightforward, consistent manner at a fixed price.13 That price should be one that most Americans can afford to pay out of pocket—the cost parameters envisioned by the researchers who discovered insulin and acted to make it available on a not-for-profit basis in 1923. This would recognize the reality that many people with diabetes are uninsured and that the prospect of spreading cost across the healthy population through insurance risk pooling encourages higher prices.

The consortium might begin by placing uninsured and underinsured patients on regimens of low-cost, non—patent-protected “Walmart insulin”14 while approval for and production of biosimilar insulins on the not-for-profit, cooperative Civica Rx model is ramped up. The ultimate objective would be to provide state-of-the-art care at a reasonable cost, and the spread of alternative means of providing insulin would surely bring down the price of branded insulin products. Like Walmart, Amazon, and other pioneers of squeezing costs out of the supply chain, the consortium would permit consumers to obtain a product that costs a few dollars to make—such as insulin15—at a price near that cost. These entities would accept, but not be dependent upon, support from traditional payers.

A preferred feature of the Registry+Bundle would be state-subsidized chronic care for low-income Americans, who receive inadequate support or, in the case of those under the poverty line in non—Medicaid expansion states, no support in managing their condition. Setting a threshold for free chronic care at 200% FPL would address the perverse irony that in many places, uninsured patients with income less than that are entitled to free hospital care for complications of their disease.

Not every disease would be amenable to this approach—some will always be so expensive that their costs must be socialized broadly. Further, this approach is not intended to preclude insurance coverage of treatments that depart from routine management. Finally, wide adoption of this approach would have consequences for drug innovation, which would have to be addressed.


High-deductible health insurance is designed more as a back-end safeguard against catastrophic events than as front-end assistance with ongoing costs of chronic disease care. The comfortable middle class sees this insurance as crucial for protecting their assets, and by guaranteeing coverage to those with preexisting conditions, the ACA ended “job lock.” But for people living paycheck to paycheck, more immediate medical expenses may be a priority. We should not overlook opportunities to address chronic disease care outside the insurance sphere. CMS is considering a Geographic Population-Based Payment model option, which contemplates some entity assuming responsibility for the total cost of care for all Medicare beneficiaries in a given region, but an equally ambitious approach to population health would be to establish a regional structure to assure chronic disease care regardless of insurance status.

Stakeholders and policy makers should acknowledge that some of the most important care in the United States is self-financed. But it does not follow that such care cannot be integrated within the meaning of the Triple Aim, only that a more creative method of organizing care is required.Author Affiliation: Dialysis Patient Citizens, Washington, DC.

Source of Funding: None.

Author Disclosures: The author reports no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design; analysis and interpretation of data; and drafting of the manuscript.

Send Correspondence to: Jackson Williams, JD, Dialysis Patient Citizens, 1012 14th St NW, Ste 1475, Washington, DC 20005. Email: Jwilli28@hotmail.com.REFERENCES

1. Berwick DM, Nolan TW, Whittington J. The Triple Aim: care, health, and cost. Health Aff (Millwood). 2008;27(3):759-769. doi: 10.1377/hlthaff.27.3.759.

2. 2017 National Healthcare Quality and Disparities Report. Agency for Healthcare Research and Quality website. nhqrnet.ahrq.gov/inhqrdr/reports/qdr. Published September 2018. Accessed April 12, 2019.

3. Cubanski J, Damico A, Neuman T, Jacobson G. Sources of supplemental coverage among Medicare beneficiaries in 2016. Kaiser Family Foundation website. kff.org/medicare/issue-brief/sources-of-supplemental-coverage-among-medicare-beneficiaries-in-2016. Published November 28, 2018. Accessed April 12, 2019.

4. An overview of the Medicare Part D prescription drug benefit. Kaiser Family Foundation website. kff.org/medicare/fact-sheet/an-overview-of-the-medicare-part-d-prescription-drug-benefit. Published October 12, 2018. Accessed April 12, 2019.

5. Collins SR, Bhupal HK, Doty MM. Health insurance coverage eight years after the ACA: fewer uninsured Americans and shorter coverage gaps, but more underinsured. The Commonwealth Fund website. commonwealthfund.org/publications/issue-briefs/2019/feb/health-insurance-coverage-eight-years-after-aca. Published February 7, 2019. Accessed April 12, 2019.

6. 2018 Employer Health Benefits Survey. Kaiser Family Foundation website. kff.org/health-costs/report/2018-employer-health-benefits-survey. Published October 3, 2018. Accessed April 12, 2019.

7. Stanley T. Life, death and insulin. The Washington Post. January 7, 2019. washingtonpost.com/news/magazine/wp/2019/01/07/feature/insulin-is-a-lifesaving-drug-but-it-has-become-intolerably-expensive-and-the-consequences-can-be-tragic. Accessed April 12, 2019.

8. Johnson K, Pear R. Seeking cheaper health insurance, Idaho bucks Affordable Care Act. The New York Times. March 9, 2018. nytimes.com/2018/03/09/us/idaho-health-insurance.html. Accessed April 12, 2019.

9. Goodnough A. Success of Kentucky’s health plan comes with new obstacles. The New York Times. December 29, 2014. nytimes.com/2014/12/30/us/kentucky-health-plan-is-flooded-with-the-poorest-and-sickest.html. Accessed April 12, 2019.

10. Koons C, Edney A. Drugmakers discount insulin, and lawmakers ask what took so long. Bloomberg website. bloomberg.com/news/articles/2019-04-10/sanofi-widens-insulin-discounts-ahead-of-congressional-hearing. Published April 10, 2019. Accessed April 12, 2019.

11. Myerson R, Romley J, Peters A, Goldman D. Health insurance coverage for people with diabetes before and after the Affordable Care Act: nationally representative data from 2005-2016. Poster presented at: AcademyHealth 2019 Annual Research Meeting; June 2-4, 2019; Washington, DC.

12. Sommers BD, Gourevitch R, Maylone B, Blendon RJ, Epstein AM. Insurance churning rates for low-income adults under health reform: lower than expected but still harmful for many. Health Aff (Millwood). 2016;35(10):1816-1824. doi: 10.1377/hlthaff.2016.0455.

13. Christensen CM, Grossman JH, Hwang J. The Innovator’s Prescription: A Disruptive Solution for Health Care. New York, NY: McGraw-Hill; 2009.

14. Luo J, Khan NF, Manetti T, et al. Implementation of a health plan program for switching from analogue to human insulin and glycemic control among Medicare beneficiaries with type 2 diabetes. JAMA. 2019;321(4):374-384. doi: 10.1001/jama.2018.21364.

15. Gotham D, Barber MJ, Hill A. Production costs and potential prices for biosimilars of human insulin and insulin analogues. BMJ Glob Health. 2018;3(5):e000850. doi: 10.1136/bmjgh-2018-000850.

16. Walker DM. Nonprofit, for-profit, and government hospitals: uncompensated care and other community benefits. Government Accountability Office website. gao.gov/new.items/d05743t.pdf. Published May 26, 2005. Accessed April 12, 2019.

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