Disease Management: Why Doesn’t It Save Money?

The honeymoon for disease management (DM) has clearly passed.  Health plans and employers are frustrated with the lack of value provided by their DM vendors but they often struggle to understand why their DM program isn’t working as intended or what to do to correct it.  The combination of frustration and confusion has resulted in a wave of market experimentation fueled by vendors who claim to have discovered the allusive secret ingredient that makes DM work.

Published today in the American Journal of Managed Care is a paper I wrote to help plan sponsors better understand what is really known about savings from DM, why telephone-based DM does not save money and what it takes to generate real savings.  This work is based on my market experiences, an extensive review of the literature, both in DM and other related disciplines, and a detailed assessment of what is known about cost-saving healthcare services and treatments.

The answer to why DM does not provide short-term savings lies partly in the myriad of cost-effectiveness assessments that have been conducted on the treatment for chronic disease over the last 30 years. Cohen and Neumann reported that less than 20 percent of preventive measures or treatments for chronic conditions are cost-saving, even for a 30-year time horizon.  Kahn found that aggressive implementation of nationally recommended medical activities would increase costs over a 30-year period for all activities except smoking cessation.  Looking more specifically at the individual components of DM programs, the evidence is equally compelling. At the level of the individual program activity, cost-savings has not been shown for treatment of these chronic conditions, the exception being heart failure.  Accordingly, one should not necessarily expect cost savings for the program as a whole, absent a belief that DM can independently improve the outcomes of patients with chronic disease without affecting the key clinical goals for each disease.

Cost-Effectiveness of Common Disease Management Activities/Goals

Disease/Condition Treatment/Service Cost-Savings
Diabetes A1C < 7% No
LDL Cholesterol < 100 mg/dl No
Blood pressure < 130/80 mmHG No
Feet examination No
Retinal screening No
Microalbuminuria screening No
CAD Antihyperlipidemics (LDL < 100 mg/dl) No
Beta blocker No
Lifestyle changes No/Unknown
Asthma Inhaled anti-inflammatory use No
Asthma education on symptom monitoring and/or trigger avoidance Unknown
HF ACE inhibitor use Yes
Beta blocker use Yes
Structured remote monitoring (weight, blood pressure, etc.) Yes
Daily exercise No/Unknown

While the cost-effectiveness literature does not bode well for the future of telephone-based DM as currently designed, cost-effectiveness research suggests that better targeting of treatment activities and patients may provide opportunity for cost-savings for some disease states.  Although a targeted approach is both intuitive and supported by the evidence, it has two practical problems that will prevent it from being widely adopted in the marketplace.

  • First, a more targeted approach is not a revenue-optimizing model for DM vendors.  For example, only about 5% of asthmatics would be targeted for intervention if the criteria were real cost-savings, hardly a desirable approach for DM vendors whose revenue model is based on volume due to their large fixed cost structure.
  • A second barrier to adoption is the marketability of the more realistic return-on-investment (ROI).  An employer is unlikely to select a vendor that is offering a 1.85 ROI over a vendor with an inflated ROI (that also includes a much larger group of patients since it is not targeted).  The same problem holds true for health plans—even though they often understand the methodological problems of the vendors’ ROIs, ultimately they too must market their program to the employers who sometimes believe all ROIs are created equal.

To learn more about proven strategies for short-term savings, take a look at the full published article.


Advertisements

, ,

  1. Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: