Overview of Disease Management

Expand Use of Chronic Disease Management Programs

What is it?

Disease management (DM) is an organized, proactive approach to health care for members of a population with a specific disease or combination of diseases or to prevent the development of diseases. The aim of DM is to increase the delivery of appropriate care to enrolled patients. Improved care is expected to lead to better health outcomes and lower costs. Although the original impetus for DM was quality improvement, the focus in recent years has been on its potential to reduce spending. Cost reduction would be achieved through fewer acute exacerbations of disease, leading to lower use of avoidable inpatient and emergency care services. Savings would be achieved if the cost of avoidable services outweighed the cost of delivering DM services while increasing the use of appropriate services. Since patients with chronic diseases account for a large share of total health spending, the potential savings through better management of chronic diseases are large.

Almost all DM programs identify a target population, such as patients with a particular diagnosis, patients who are at risk for developing a chronic condition, or employees eligible for a wellness intervention. Patient participation is voluntary. The programs identify a set of (usually measurable) goals, such as decreasing hospitalizations among participants, improving compliance with medications, or increasing exercise levels. Some organizations, particularly health plans, administer their own DM programs, but many organizations contract with third party vendors to administer the plan. The level of involvement of physicians in DM plans differs. For example, physicians and support personnel in health maintenance organizations may be integrally involved in the DM care processes. Physicians in a community setting could conceivably have patients in their practice who have the same diagnosis but who have different insurers and therefore may be enrolled in different commercial DM programs. These plans operate with less physician involvement. Some DM plans include financial incentives to the DM organization for meeting care management and/or cost goals.

Current policy options involving DM usually call for expanding it as a tool to restructure care delivery in a way that would control health care costs, particularly costs associated with treating chronic diseases.

How would it work?

One policy option would be to further expand the use of disease management in public insurance programs such as Medicare or Medicaid either by requiring that contractors provide DM or that it becomes part of the benefits available to enrollees. In addition, the intensity of the DM interventions could potentially be increased, or new, more effective DM models could be applied.

Has it been tried before?

In response to Section 721 of the Medicare Modernization Act of 2003, Medicare is currently testing DM programs through a series of national demonstrations. In Phase I of the Medicare Health Support demonstration, Medicare Health Support Organizations (MHSOs) were paid a monthly fee for each enrolled patient with diabetes or congestive heart failure (CHF). Participating MHSOs agreed to achieve budget neutrality or forfeit some of these fees. The MHSOs provided follow-up calls for treatment, telephone hotlines, self-care education with home-monitoring devices, reports to physicians on patient reported changes in weight and glucose levels, and reminders to patients and physicians of required testing. (Such services would be built into a managed care DM system, but here they supplement the independent physicians?offices.)

Initially, eight regions had organizations that signed up to be MHSOs, but two subsequently dropped out. Medicare used claims to identify patients with diabetes or CHF in these regions and randomly assigned these patients to use the MHSO service (which they could decline) or to be in the control group. More than 100,000 patients were enrolled. The Centers for Medicare & Medicaid Services subsequently announced that the MHSOs were not meeting the statutory requirements, so the demonstration ended with Phase 1 (summer 2007).

There are no immediate plans to proceed to a second phase, but a final decision will be made based on the results of an independent evaluation.

Four previous Medicare demonstrations have also tested various DM approaches. A review of the findings from these demonstrations found that only 3 of 20 programs reduced costs or hospitalizations. The demonstration evaluations found no effects on mortality, limited effects on clinical quality indicators, and no effects on patient adherence or self-care, but high patient satisfaction with the DM services (Brown et al., 2007).

By contrast with Medicare, almost all of the top 150 health plans in the United States offer some form of DM program; a sizable majority of the top employers in the United States offer some sort of program to help employees manage their health. DM programs currently are ubiquitous in the private sector-in place in a variety of settings, including hospitals, group practices, health plans and other payers, and employers.