Payer and Provider Collaboration For Disease Management
This article profiles and contrasts two significantly different models of disease management, and discusses the likely factors for their success in light of their different scopes and methods. Well pay particular attention to the degree of payer-provider integration that has occurred around each of them and speculate on the form and value of potential future collaboration.
Although there are multiple disease management programs in the market, this article focuses on two highly successful examples:
- American Healthways (payer-driven model); and
- The Asheville Project (employer-driven model).
American Healthways
The groundwork for American Healthways (AMHC) was generated in a hospital management company. The founders left to form American Healthways Corporation, which initially focused on creating a product based on the success of a diabetes center of excellence. They saw a potential market niche and created a way to scale the model to produce the Diabetes Treatment Centers of America (DTCA). The product was developed for hospitals. There was a strong focus on supporting physicians to deliver the best of inpatient care for patients with diabetes. The program was committed to patient education and improving the processes and systems of care.
While AMHC has had a very positive impact on the inpatient processes of care through their product, there remained an enormous need for continued support once patients left the hospital. About the same time, the diabetic control and complications trial (DCCT)1 was coming to a close. There was now sound scientific evidence that glycemic control really made a difference. The Lewin2 study also documented the associated medical costs for diabetes, providing additional motivation to develop a product that would address the needs of diabetic patients.
AMHC identified that the entities that had the capacity to fund such a program and derive value from it would be those that were at risk for total health care costs: health plans and employers. In 1993, AMHC began to design a product they would market to health plans, with five intended outcomes:
- Improve health status;
- Increase member satisfaction with the health care experience;
- Increase physician satisfaction with the delivery experience;
- Reduce total health care costs (not just disease related); and
- Improve productivity.
These remain the outcomes that AMHC targets and routinely achieves today. AMHCs programs have expanded over the last 12 years to encompass both core and impact conditions.
Core conditions that have been in place for several years include:
- Diabetes;
- CAD (coronary artery disease);
- CHF (congestive heart failure);
- COPD (chronic obstructive pulmonary disease); and
- Asthma.
Recently added core conditions include:
- ESRD (end-stage renal disease) and CKD (chronic kidney disease); and
- Cancer.
In addition, their programs address 17 impact conditions, such as arthritis and depression. These conditions contribute heavily to morbidity, generate significant medical costs, and are those for which effective interventions have been developed. With the long-standing core conditions and impact conditions, AMHCs programs address 12 to 17 percent of a typical commercial population and a corresponding 40 to 45 percent of total medical costs. With the addition of renal disease and cancer, those percentages will increase. Of equal importance, by addressing such a broad spectrum of conditions, the programs address a whole person who may have multiple health problems.
The Asheville Project
Smaller in scope and participation, the Asheville Project began with a conversation among pharmacists in North Carolina. They felt considerable frustration that although they had extensive training in disease management, they were likely to spend the bulk of their time counting pills. They were interested in proving that pharmacists could make a difference in providing better outcomes for their customers.
In 1997, Dan Garrett, then president of the North Carolina Center for Pharmaceutical Care (a trade organization), presented a proposal to John Miall, the risk manager for the City of Asheville. The proposal was radical for its time. Garrett proposed an experiment: Pharmacists would be trained in counseling diabetic patients and would help customers manage their disease. If, after six months, the patients improved and the city was spending less on health care costs for these patients, the pharmacists would be paid for their time. Patients would be enticed to enter the program by the offer of free diabetic supplies and waived copays for diabetic medications and labs.
Even before the six months were up, before aggregate data were in, Miall called Garrett. Miall wanted to continue the project and pay the pharmacists retroactively to the beginning. Why? Employees were coming to thank Miall, with tears in their eyes. They said that the project was the best thing the city had ever done for them.3
The patients were happy and they were healthier, with 63 percent showing blood sugar in the optimal range as opposed to 38 percent prior to the start of the program. Over a five-year span, total medical costs were significantly reduced and productivity significantly increased, with days of sick time decreasing with each year of the program. Today, the program has been expanded to include three other chronic diseases high cholesterol, high blood pressure, and asthma.
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| American Healthways | AMHC receives monthly eligibility and claims from its health plan clients. The data are run through condition identification and predictive modeling algorithms to identify program candidates. Once members have been identified as potential participants in the program, they receive a welcome call and letter. Members may opt out of the program, but the vast majority (> 90 percent) choose not to. Program participants are stratified according to the severity of their illnesses, which determines the frequency and nature of intervention. Some members are called as often as daily. Some (with class IV heart failure) undergo home telemonitoring (for weight, pulse, and blood pressure). Others with much milder disease may be called quarterly. Sophisticated outbound calling technology optimizes convenience. Appointments are scheduled for interactions with members, according to when they would like to be called. Based on the assessment, customized care plans are developed for members, helping them manage their health and their lives. Self-care goal setting helps drive behavioral change. No more than three goals are established, written in members' own words and reinforced at each call. The interaction is analagous to a financial advisor. It's like having a health advisor: Members are coached about how to maximize their health asset portfolios. | American Healthways trains nurses specifically to interact with physicians who have patients in the program. These disease intervention experts are called provider service managers (PSMs). Participating physicians receive a welcome packet when it is identified that they will potentially have patients in the program. The PSM meets one on one with key physician stakeholders and key targeted groups (those with large numbers of patients enrolled in the program). The PSM supports the practice of these physicians by conducting individual case conferences with physicians for those patients who appear to need additional support, and provides feedback (data) to physicians regarding the health of their panel of patients, outcomes, and adherence to standards of care. When data are available (such as a discharge treatment plan from the hospital or other treatment plan from the physician), those parameters are entered into the clinical information system at AMHC and will guide the interactions among the care enhancement center (CEC), nurse, and member, as well as the development of an individualized self-care program. |
In the first year of an AMHC program at Blue Cross Blue Shield of Minnesota (BCBSMN), clinical, utilization, cost, and satisfaction outcomes were statistically significant when compared to a control cohort. They included: - Significant improvement in diabetics' hemoglobin A1c levels (this reflects how well a patient's diabetes has been managed over the previous three or four months); - A 14 percent decrease in the overall rate of hospital admissions; and - An 18 percent reduction in emergency room visits. Cost Savings - Average savings in excess of $36 million, or $41 per program member per month, or about $500 per year; - A return of at least $2.90 for every dollar invested; - A projected 2 to 3 percent reduction in total fully insured, commercial health care expenditure rate; and - Indirect savings: More than 7 percent of chronic members and 11 percent of impact condition members report decreased days absent from work or school as a result of the program. Member Satisfaction BCBSMN surveyed enrollees and physicians annually regarding their satisfaction with the program. - More than 95 percent of eligible members are participating in the program. - Ninety percent of core disease members and 74 percent of impact condition members were very satisfied or somewhat satisfied with the program, according to an independent survey of members enrolled for at least six months. - Eighty-four percent of core disease members and 64 percent of impact condition members report they had more control of their health. - Fifty-seven percent say the program helps them communicate better with their doctor. |
| The Asheville Project | Employees who choose to enroll in the program meet with a pharmacist for an initial 60-minute consultation. The pharmacists ensure that the patients know how to use their blood sugar monitors correctly. Subsequently, employees meet with pharmacists monthly to review blood sugar results, discuss their condition, and set goals. The pharmacists also check the employees' eyes, skin, and limbs. For participating in the program, employees receive free diabetic supplies, and copays for diabetic medications and labs are waived. | The training was developed and delivered by local physicians and a hospital-based diabetes treatment center. Each pharmacist communicates with the employee's physician, confirming that a meeting with the employee-patient has taken place. The pharmacist explains what she hopes to accomplish and asks if the physician has any special orders, instructions, or goals for the individual. | Average HbA1c decreased from 7.6 at baseline to 6.7 at 60 months. A persistent low concentration of glycosylated hemoglobin means that the patient has good long-term control of blood sugar levels. Average annual aggregate medical claims for diabetics decreased from $6,127 at baseline to $4,651 at 60 months. Average sick leave days per annum per diabetic employee decreased from 12.6 days to 5.67 days. Sick leave usage decreased from 11 days at baseline to 3.9 days at five years. Patients reported significant improvement in their quality of life as measured by SF36 (a health survey for dialysis patients). |
Payer-Provider Collaboration In Disease Management
At first blush, disease management would seem a logical arena for collaboration between payers and providers. By acting in concert, they could solve the problem of deploying conflicting or duplicative programs that are not coordinated with each other. But there is difficulty in overcoming the natural barriers to collaboration in this area. Physicians often see disease management programs developed by payers and employers as intrusive. Physicians distrust the usefulness of payer information and the purity of payers motives. Moreover, physician participation is complicated by the fact that each will generally have multiple payers covering his patient panel; hence, multiple disease management programs.
Both the American Healthways and Ashville projects make a significant attempt to involve physicians in providing instructions and guidance, but in neither case does the program become a true extension of the physicians care. This desirable goal is still elusive. As stated by one leader at American Healthways, the full potential of collaboration has yet to be realized.6
In order for true collaboration to occur, a natural distrust that generally exists between payers and physicians must be overcome. Physicians would be more likely to participate in disease management projects sponsored by payers or employers if they receive what they perceive as something of value in return for their efforts, in addition to believing that the program is in the best interests of their patients. The program must also be designed so that it fits into the physicians workflow seamlessly, as it will likely only impact a fraction of their patients.
The form that something of value would take is entirely dependent on the delivery model and will need to be developed in conjunction with involved physicians, at least in the first truly collaborative experiments. There are German disease management programs that may serve as an example of a potential reimbursement model. In select programs for patients with severe health conditions, remote patient monitoring of key parameters is utilized. These include weight and blood pressure or pulmonary function, depending on the patients individual condition (cardiac disease or asthma). The physician reviews data and adjusts the therapy and treatment plan. In return for their efforts (in some programs), the physicians receive a per-member per-month (PMPM) reimbursement as well as a bonus based on the results achieved. Fairly recent changes in German law now allow such reimbursement to occur for physician participation in disease management programs.7
In the United States, the more effective collaborations between payers and providers have generally required joint design, involving representatives from both the payer and provider organizations involved. For an effective interface between payer- or employer-driven disease management and physicians to occur, this is probably essential for success.
Among others, the American Healthways and Asheville projects provide powerful evidence that effective disease management is in the best interests of patients, improves the quality of care delivered, and has a significant impact on overall costs. It is reasonable to assume that more benefit for all could be obtained if truly effective collaboration with physicians and providers could be achieved.
Critical Success Factors
While AMHCs outcomes measurement is more robust and comprehensive and involves many more lives (in excess of a million versus several hundred), both programs have obviously yielded impressive results. Some common factors seem to contribute to a successful disease management program:
- Focus on high-cost diseases where coaching and practical interventions make a difference. Both projects developed intervention strategies for diseases where re-liable studies documented quality of life and cost benefits when effective disease management programs were implemented.
- Reliance on agreed-upon basic standards of care that most physicians and care providers will readily embrace.
- Effectiveness in forming behavior-changing, life-affirming relationships with program participants, where they feel cared for and supported, and are encouraged to take better care of themselves. This factor is extremely significant and may explain why the American Healthways programs achieve impressive results despite their lack of financial incentives for patient participation. In the Asheville project, this degree of relationship was established via face-to-face contact with a pharmacist. In the American Healthways programs, the contact (with an R.N.) is entirely telephonic.
The success of these projects shows that collaborative disease management can reduce overall health care costs and, more importantly, help patients to live healthier lives by helping them become more accountable for addressing and changing their own behaviors.
1 Diabetes Monitor: Diabetes Control and Complications Trial ... The results of the DCCT (Diabetes Control and Complications Trial) were announced on June 13, 1993, in a two-hour session at the Annual Meeting of the American ... www.diabetesmonitor. com/dcct.htm.
2 Lewin Study Confirms Diabetes Treatment Center of Americas Diabetes. (39) www.pathfinder.com/money/latest/press/PW/1998Aug03/551.html... www.phc4.org/reports/mandates/656/references.htm.
3 Endeavors Magazine, Winter 2004, Research and Creative Activity at the University of North Carolina at Chapel Hill, page 2, The Asheville Project, Angela Spivey, www.research.unc.edu/endeavors/win2004/contents.html.
4 Pharmacy Times, October 1998, The Asheville Project: Taking a fresh look at the Pharmacy Practice Model, Barry Bunting, PharmD, and Bill Horton, RPh, page 17.
5 Short Form 36, reported in Causes of and Potential Solutions to the High Cost of Health Care. Web-Assisted Audioconference, broadcast Oct. 10, 11, and 15, 2002. Agency for Healthcare Research and Quality, Rockville, MD. www.ahrq.gov/news/ulp/hicosttele.
6 Interview with Janet Calhoun, SVP Product Development and Management, AMHC, February 17, 2004.
7 Communication with Achim Schülke, VP, Viasys Healthcare, Clinical Services, March 2, 2004.
