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Milliman

Disease management – the concept and the industry – have experienced both success and scrutinyduring its brief history. Currently, as technology seems poised to improve management systems,everyone is struggling with elevating costs and the appropriate measurement of impact.

Health care providers have historically used the term disease management (DM) to describe clinical and patient care strategies for delivering care and support to individuals with specific conditions. The term disease management, as used by payers and managed care organizations as well as employers and purchasers, refers to providing a coordinated set of services intended to support the health care provider’s clinical care plans. The Disease Management Association of America (DMAA) definition reflects this focus and further highlights the emphasis on identifying populations, focusing on education and prevention, and coordinating care across the range of needs and providers involved with a member’s care.

DM services and the resulting industry emerged in the mid-to-late 1990s. Pharmaceutical companies were some of the early developers of DM programs. These early programs were later criticized as potentially being mechanisms for promoting drugs, devices, and programs owned by the parent organizations. That perception resulted in the redesign of some programs and is also reflected in accreditation standards that require full disclosure of ownership and product affiliations.

The period of time from the late 1990s to the present has seen rapid expansion and growth of DM companies and programs. The annual growth rate of DM revenue estimates ranges from 20 to 30 percent resulting in a total revenue estimate of more than $700 million for the industry.

Today, the DM industry is composed of stand-alone organizations as well as departments or units within payer, managed care, or third-party administrators. DM may be provided either through organizations offering full service or a comprehensive set of components as outlined in the above DMAA definition. Some organizations may specialize and deliver selective components or support services.

Vendor Overview

Most medical management tactics – such as utilization review, prior authorization, and case management – are offered by insurers. Usually medical staffs for these programs are employees of the insurer. Only pharmacy management and behavioral health management have typically been carved out of insurance companies and managed by vendors.

DM services join the carved-out ranks, with 160 vendors offering DM services to insurers and employers. There is a wide range among those 160 in conceptual approach, member management, information sources, interventions, and results claimed.

In typical insurer medical management programs, areas of focus are selected by benefit limits or benchmarking studies that indicate that the cost or utilization of services is higher than expected. In DM, areas for focus are selected from chronic diseases where better patient compliance with treatment plans hold the promise of fewer complications. “DM programs are aimed at helping people with chronic illness manage their disease in a manner that reduces or delays the detrimental clinical and functional effects of the disease, thereby reducing the need for and cost of medical care. DM programs report they achieve this either by delaying or avoiding complications of the disease or preventing acute exacerbations that may require hospitalization or emergency department care,” as stated in DM: The Programs and the Promise (Johnson, 2003)

Some activities among vendors in recent years include mergers and acquisitions, the emergence of nontraditional and highly specialized programs, and vendors that serve other vendors.

While many new programs have sprung up in recent years, others have closed. Successful vendors purchase or merge with other vendors in order to offer more programs or to strengthen an aspect of care, such as management of drugs, or predictive modeling to identify diseased members.

Nontraditional programs include rare DM or highly specialized areas such as wound care or neonatology.

A variety of companies are now producing specialized products for DM vendors and programs. At the forefront are communication and measurement devices that help members manage their disease and communicate with their nurse at the DM company. Members can electronically send their daily weight or blood pressure to the DM nurse. The nurse can call members and advise them on medication adjustments or other activities. The nurse may also be alerted if members fail to report a daily measure. She can then call patients and remind them of the need to check their blood pressure or weight. This type of close follow-up can be very helpful to members as they form new habits.

Specialized services can include voice recognition software that promotes efficiency in documentation for DM nurses and companies that offer translation services for educational materials that are sent to members’ homes.

Employers and Disease Management

Vendors and insurers both approach employers about offering DM services to their employees. It can be difficult for an employer to decide with whom to work. Vendor contracts seem to offer the possibility of cutting out the middle man (the insurer) and thus realizing administrative cost savings. On the other hand, employers are typically more familiar with their medical insurance carrier and may rely on the insurer to manage the vendor relationship and to coordinate DM services with other medical management programs.

Employers working with DM vendors find themselves in one of four positions (see Figure 1):

• Just thinking – An insurer or a vendor may have discussed the merits of DM services, but it’s not clear if employees will really benefit from these programs, or if the programs are likely to produce results that are worth program costs;
• Ready to roll – The decision is made: DM services are right for the employed population. Now the correct mix of services must be selected and a decision made about which vendor or insurer is best to contract with;
• The rubber meets the road – The vendor or insurer is selected. Members must be enrolled, contracts signed, communication with doctors and employees crafted and delivered, as well as a host of other administrative activities; and
• Measuring the results – DM services have been provided to employees and it’s time to measure the results in terms of cost savings, improvements in clinical care, job productivity, satisfaction, and other areas specified by the contract.

Use of Technology

The growth in DM services is fueling both the need and demand for technology in all delivery aspects of these programs. The focus of these technology advancements is one way to make DM more effective and efficient.

The need for technology, and the role it plays, is broad and multifaceted and best thought of in the context of the key processes of a comprehensive DM program.

These Processes Include:

• Population analysis – Processes and technologies that analyze claims and other data resulting in early and timely identification of members who would benefit from DM;
• Member categorization and stratification – Techniques for analyzing and organizing members based on severity of illness or complexity of needs in order to focus DM program resources in a manner that results in highest value for the member and health plan or employer;
• Member management – Once identified, members are provided with proactive educational, clinical, and care coordination support tailored to their needs. One of the unique features of DM, which has become a driving factor in technology development, is the direct involvement of the member in their own health care. Technology developments in this area focus on both educational communication capabilities as well as biometric devices that record and transmit clinical readings;
• Outcome analysis – Approaches to evaluating the impact of the DM interventions both from a financial as well as care and functional improvement perspective;
• Case and benefits management coordination – Requirements to interface and coordinate with other benefits management and care management activities within a health plan require technological as well as process development.

These processes are illustrated in Figure 2.

Advances and Opportunities In Technology and DM Programs

• Sophisticated analytic systems that ideally integrate data from several sources and provide early identification of members with emerging needs for DM services. A rapidly expanding technology and analytic tool used in this area is predictive modeling which generally uses medical and pharmacy data to identify high risk members. That application is further enhanced when combined with information from other sources such as automated health risk assessment tools or electronic clinical laboratory results.
• Stratification algorithms that electronically guide nurse-driven or member-driven information about health status and functional issues resulting in an acuity level or rating. These algorithms combined with claims and medical data provide a powerful tool for identifying specific areas of opportunity.
• Web-based patient and provider systems that allow direct access for the member and care provider to educational information, care progress tracking tools, and health care alerts. Many of these systems are integrated into email or other communication systems that automate outreach to members and providers based on flags and conditions.
• Biometric devices coupled with communication mechanisms such as the phone, laptop, or personal data assistant provide consistent collection of clinical information, automated transmission of results, and tracking and trending of findings.
• Workflow and decision support systems that guide the DM professionals through the case assessment, management, and evaluation process. Care pathways, evidence-based tools, and patient safety and quality alert algorithms can be imbedded in these systems. This enhancement supports both consistent and comprehensive evaluation and intervention processes.
• Outcome and impact analysis continues to be under development as the DM industry continues to be challenged by lack of identification of consistent and credible methods for evaluating and comparing program results.

Figure 2 also highlights some of the challenges that emerge with this growth in technologies. Payers, providers, and DM organizations have different tools and technologies involved with identifying and managing members. A key challenge is integrating both systems and information across the applications and tools both within an organization as well as across different organizations. The members enrolled in DM generally interface with a variety of providers and are supported by a number of different medical management programs. Given the current state of stand-alone technologies, there are significant risks of both overlap and poor coordination of the information and processes involved in DM. This lack of integration also results in continued use of manual processes to bridge the gap across different technologies.

The Measurement Problem

Measuring the impact of DM programs is no simple matter. More than one person has measured the effects of their program by measuring the cost of medical care for a year before DM and the year after, and reported huge savings. When the CFO looks at the bottom line, the savings have vanished. The problem is that this simple and straightforward approach does not account for some common measurement problems, including:

Regression to the mean – or that tendency for things to return to normal. Members are identified and enrolled in programs when their costs peak. The following year, they may naturally cycle down while another group’s costs cycle up. Any measurement must account for this phenomenon, or savings will not be reflected in the bottom line.

Selection bias – or the difference between diseased and other members. Enrollees in a DM program can have a different cost base and a different medical cost trend line. Once again, measurement of results must account for these factors.

New Strategies and Emerging Trends

DM continues to be one of the most rapidly evolving care management programs within the health care insurance and benefit industry. Some of the key trends and strategies include:

• Increases in the diseases that are managed and the ability to manage across multiple diseases and conditions for members with comorbidities;
• An emerging focus on behavior change readiness assessment and methods that increase members’ involvement in implementing lifestyle changes that affect their health;
• Increased use of biometric devices; and
• Development of programs tailored for Medicare and Medicaid beneficiaries as interest in DM for those populations begins to escalate.

The growth in existing DM programs coupled with new programs and market expansion will provide continued demand for technology innovations and solutions that advance the industry and its ability to improve health care support and value for members.