New Medicare demo project focuses on chronic health care

Disease management firms are trying to prove themselves to doctors and Medicare officials through an upcoming demonstration program.

By David Glendinning — Posted March 14, 2005

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Washington -- Starting this spring, Medicare will contract with disease management companies in nine areas of the country in an effort to improve health outcomes for up to 300,000 beneficiaries with chronic diseases.

Some physicians remain concerned that the demonstration program will favor reducing utilization over improving health care quality. The companies are trying to convince doctors that everyone stands to benefit from their Medicare involvement.

Irvine, Calif.-based LifeMasters Supported SelfCare Inc. will be participating in two of the project's nine regional areas.

AMNews recently sat down with Christobel E. Selecky, executive chair of LifeMasters and the president of the Disease Management Assn. of America, to discuss the issues.

Question: The Medicare reform law of 2003 had a pretty significant disease management element in it. What was DMAA's role in that?

Answer: We embarked about four years ago on a program to try to educate Congress and the Centers for Medicare & Medicare Services about the benefits of disease management and to encourage them to experiment with it as they were looking at ways to keep their Medicare and Medicaid costs under control.

It was a long process, but she [House Ways and Means health subcommittee Chair Nancy Johnson (R, Conn.)] really got it. She was really a very strong advocate of at least experimenting with disease management. In the bill it says that if these programs are successful, it will be expanded to the whole Medicare population.

Q: What is this going to mean for the physicians who are participating in the nine Medicare-based programs?

A: It's important to understand that disease management is not in any way meant to interfere with the doctor-patient relationship. What it means for doctors is that they have a little bit more information about their chronically ill patients than they may have before.

The goal here really is to assist physicians in delivering evidence-based care to their patients, not by dumping some big binder on them like managed care organizations used to do, but by letting them know in real time when somebody needs a test that hasn't been ordered.

What it means for physicians is that they're going to see an opportunity to be able to care more effectively and efficiently for their patients with chronic disease.

Q: What kind of feedback are you getting so far from physicians who are participating in existing non-Medicare programs?

A: We do an exception report that gets sent to the doctors. What we find is that within three days of the report getting sent out, between 75% and 85% of the doctors have done something with that information. They've called the patient, asked them to come in for an office visit, changed their medication. To me that means that the physicians are finding the information useful.

One of the problems is that there is still a very small percentage of people being cared for in these more formal disease management programs. Until this gets more penetrated and more part of the fabric of the way that health care is delivered, physicians may not really feel a big impact on their day-to-day practice.

Q: Does your company provide disease managers and health coaches, or does it depend on the primary care physicians to serve in this capacity?

A: We provide health coaches. We understand that it's the physician who directs the plan of care.

Q: There's some wariness in the physician community about programs in which the end result is to reduce utilization. Will these programs end up limiting needed care?

A: You're talking about going back to the bad old days of managed care. The whole goal of disease management is to reduce utilization, but it's to reduce preventable emergency utilization that I think every physician would agree is not appropriate.

There is more than enough savings that insurers and the government can realize from eliminating those kinds of hospitalizations and not by curtailing appropriate utilization. We do nothing to question whether an admission should happen or not. We don't go in and try to get somebody out of the hospital quickly, because that's not our job. We're not doing utilization management.

I totally understand and empathize with why physicians might be suspicious. I spent the first 15 years of my career in a managed care organization, so I understand.

Q: What would you say to assertions that this concept doesn't really lend itself easily to a fee-for-service program like Medicare because disease management firms don't get paid for each call or each home visit? What will it take to break that old business cycle?

A: There is a lot of reform that needs to happen. It's perfectly understandable why the reimbursement system evolved the way that it did. There was no evidence, no proof that the phone call was yielding some sort of positive result. I'm a big believer in actually paying physicians for those kinds of activities if you can measure the impact of those activities. Disease management, because it is all about measuring the impact of these various activities, is going to provide a platform for that.

My vision for disease management is that it does get done at the physician office level at some point, that at some point the whole payment system for health care changes so that we no longer need to get paid for by the insurance companies. But I think we're a few years away from that.

Q: What's next?

A: I want to make sure that physicians are involved in the development of disease management like they weren't in the development of managed care. We want to make sure that we are the clearinghouse for the kinds of data that prove the case that if you improve quality, you will reduce health care costs. That will do more to help physicians than anything, because insurance companies and employers are getting desperate again. They've got double-digit premium increases, and you're starting to see the shell game happening, where they're changing benefits and trying to move people into these health savings accounts and trying to do things to save money.

Q: Any lessons learned in this process?

A: What we need as an industry is very credible proof that this works. What we've learned from that is the importance of engaging the patients and physicians, making sure that you expend resources up front to reach out and get as many people engaged in the program as you possibly can.

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