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Economic Grand Rounds: The Promise of Disease Management
Arthur Lazarus, M.D., M.B.A.
Psychiatric Services 2001; doi: 10.1176/appi.ps.52.2.169
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Medical trends that became evident in the 1990s are likely to continue into the first decade of the new millennium. Top among these trends are the development and use of new technology, industry consolidation, "consumercentric" care, and a proactive approach to health care through preventive services and disease management programs. Yet managed care organizations have not begun to tap into the potential of disease management programs for patients with behavioral disorders.

The Academy of Managed Care Pharmacy (http://www.amcp.org) defines disease management as "a continuous, coordinated, evolutionary process that seeks to manage and improve the health status of a carefully defined patient population over the entire course of the disease." Disease management programs identify and deliver the most effective and efficient combination of available resources; support the physician-patient relationship; emphasize prevention of exacerbations and complications of chronic conditions; and continuously evaluate clinical, functional, and economic outcomes of treatment. Although disease management programs vary in nature and scope, the following components are considered prerequisite:

• Population identification process and patient registry

• Evidence-based practice guidelines

• Case management and support services

• Screening, risk stratification, and matching interventions with need

• Patient monitoring, self-management education, and satisfaction surveys

• Treatment intervention, outcome measurement, and reporting

• Appropriate use of information technology such as specialized software, computerized data warehouse, automated decision support tools, and callback systems

In fact, first-generation disease management companies are giving way to second-generation companies that have embraced electronic disease management programs. Technologies used by electronic disease management companies include telephonic interactive voice response systems, patient monitoring devices, videoconferencing, and, of course, the Internet. These programs face the same challenges as traditional programs, namely, integrating services into local delivery systems—which are often resistant to innovation—and obtaining physician buy-in.

The fate of any disease management program ultimately rests with its acceptance by physicians. Many physicians are already aggravated by the lack of standardization among such programs. Competing programs sponsored by different health plans often have different sets of guidelines and reporting formats for the same disease.

The term "disease management" did not enter the medical lexicon until the mid-1990s. The term has taken on different meanings, depending on whether it is considered a "process" or a "business." As a process, it refers to a series of interventions to bring about a desired result; as a business, it refers to the programs either developed internally by managed care organizations or outsourced to companies that specialize in managing patients with chronic diseases such as diabetes, asthma, cancer, and heart and kidney disease.

Disease management programs and services were first promoted by pharmaceutical companies in the 1990s to provide value-added services to differentiate their drugs. Managed care organizations and outsourcing companies intensified the focus on specific diseases when they recognized the potential of these programs to reduce costs through overall improved patient management. Approximately 88 percent of health maintenance organizations have implemented one or more programs, and about 150 outsourcing companies have been established, funded mostly by venture capitalists and other equity investors (1). Today the disease management market is about $350 million annually, and it could reach the $50 to $100 billion range by the end of the decade (2).

Disease management outsourcing companies invite comparison to managed behavioral health care organizations. Both types of companies specialize in providing services to managed care organizations and other payers. Hence disease management companies are another example of a carve-out. Like managed behavioral health care organizations, disease management companies may be at financial risk for the services they provide, only more often through performance guarantees than through capitation. Another similarity is that managed care organizations can either purchase disease management services—as well as mental health services—separately through vendors, or they can develop their own programs in-house.

Not surprisingly, the outsourcing of disease management services has generated as much controversy as the carving out of mental health care. If it is true that history repeats itself, we are likely to see several internally developed disease management programs spun off by managed care organizations, as was the case with managed behavioral health care organizations.

An unanswered question is whether managed behavioral health care organizations will evolve into behavioral disease management companies, leaving behind utilization reviews and other heavy-handed practices (3). Managed behavioral health care organizations will literally have to reinvent themselves to accomplish this transformation. But this is a golden opportunity for them, because, with few exceptions, almost no disease management programs specific to mental health are being offered for patients with behavioral disorders. Many factors may account for this dearth of programs, including stigma, the inability to demonstrate savings involving "soft" dollars, and, ironically, barriers erected by the managed behavioral health care organizations themselves. Mental health carve-outs make it difficult to coordinate overall care, which is paramount to the success of any disease management program.

The promise of disease management, indeed the Holy Grail of managed care, is to improve care while reducing costs. A handful of managed care organizations are redesigning their entire medical management strategies around the benefits of disease management as a means of helping patients manage their own health care. The use of new technologies—primarily the Internet—to bring health plans closer to their members and members closer to the information they need to help manage their health care decisions, is becoming more widespread.

Other organizations have disregarded the concept of disease management because they do not believe in the potential savings. In reality, many of those organizations may not have the infrastructure to capture and analyze data that would demonstrate cost savings. But published reports offer proof that disease management programs work. Hypothetically, a managed care organization of 400,000 commercial members without Medicare could reap a total savings of $1.7 million annually by implementing a disease management program for end-stage renal disease for only 100 members (4). Health plans serving Medicare beneficiaries can improve the health status of their members and reduce total direct health care costs by 17 percent in one year—$1.36 million for every 1,000 Medicare members—by implementing a comprehensive diabetes disease management program (5). These estimates are conservative, since they do not consider savings from indirect costs associated with a patient's improved quality of life and health status.

My former organization (Humana, Inc.), in conjunction with nationally recognized companies, has achieved very positive outcomes through disease management programs. For example, a congestive heart failure program used to treat 4,933 patients between March 1, 1996, and March 31, 1998, resulted in a 60 percent drop in hospital admissions for all diagnoses associated with congestive heart failure and a 61 percent reduction in inpatient health care costs. The decrease in inpatient use indicated greater clinical stability for these patients, and the patients also experienced important lifestyle improvements (6).

Favorable results were obtained in another program for patients who have a complex, chronic disease such as multiple sclerosis, lupus, or cystic fibrosis (7). Measurements were made for approximately 5,100 patients between October 1998 and June 2000. Patients with multiple sclerosis experienced a 48 percent reduction in exacerbations of their illness and a 42 percent reduction in depression. The number of patients with lupus who routinely monitored their blood pressure and then reported abnormal findings to their physicians increased significantly. All results were achieved primarily through technology-enabled health care solutions, which allowed patients to actively manage their disease before complications occurred.

Although savings from disease management programs may be difficult to quantify, especially in the area of mental health, there is evidence that behavioral disease management programs would be a solid investment. A large body of literature referred to as medical cost-offset research has demonstrated that money invested in behavioral health services is recouped through reduced use of medical and surgical services, including office visits, hospitalization, prescriptions, procedures, and laboratory tests. In well-designed studies, cost offsets in the range of 20 to 40 percent have occurred (8). Thus a combination of managed behavioral health care and disease management could be quite powerful.

Behavioral disease management programs can have a significant impact on work productivity and absenteeism. Workplace depression costs employers between $30 billion and $44 billion annually—more than the cost for treating hypertension and comparable to costs for heart disease, diabetes, and back problems (9). Depressed workers have 1.5 to 3.2 more short-term disability days in a 30-day period than other workers, with salary-equivalent productivity losses averaging $182 to $395 per worker (10). Because the cost of treating depression may be fully offset by savings from the reduction in lost workdays, depression disease management programs would literally pay for themselves, at least from the employer's viewpoint.

Another area of promise is the integration of behavioral and medical disease management programs. The comorbidity of depression in chronic, degenerative physical illnesses averages 25 percent (11). Some of the leading disease management programs in cancer and chronic diseases have protocols, if not specialists, for dealing with the depression that accompanies those conditions, but virtually none offer true behavioral disease management.

A depression disease management program tailored to cardiac patients would be highly desirable. Depression is known to be an independent risk factor for higher mortality among individuals who have suffered a myocardial infarction (12). When integrated with medical programs, behavioral disease management programs could provide patients with the option of seeking treatment through their primary care physician, their medical or mental health specialist, or a combination of providers.

In fact, the entire primary care setting is ripe for behavioral disease management intervention. Programs can be designed for primary care physicians to improve the diagnosis and management of patients with underlying behavioral disorders, who account for up to 70 percent of patients in some primary care practices (13). A variety of newer strategies—for example, PRIME-MD—provide improved primary care recognition and management of behavioral disorders, but none have all the components of a bona fide disease management program.

Disease management programs for serious and costly mental illnesses other than depression should also be developed. Substance-related disorders, anxiety disorders, and schizophrenia are prime examples of illnesses associated with unexplained clinical variation and a large disease burden, justifying the implementation of a comprehensive, specific intervention rather than isolated management of clinical problems. Mere practice guidelines and treatment algorithms for these conditions hardly constitute disease management.

Determining the exact return on investment in disease management programs can be elusive, because so many factors complicate the calculation. The theory and practice of disease management, however, argue in favor of implementing such programs, and data are just beginning to support these arguments. Because these programs may take years to show results, it will be necessary to focus on long-term quality of life, health, and cost, rather than on short-term costs alone.

Dr. Lazarus is principal Managed Healthcare Solutions, 6830 Windha Parkway, Prospect, Kentucky 40059 (e-mail, artlazarus@cs.com). Steven S. Sharfstein, M.D., is editor of this column.

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