Case management: solving the 70/10 equation: when costs run amok and patients languish, who ya gonna call? - includes articles on artificial intelligence in case management and steps involved in creating a care plan for a quadriplegic

Business & Health, July, 1991 by Pamela Taulbee

Catherine was not a healthy baby. Shortly after birth she developed feeding problems and began having seizures that resulted in several hospitalizations. Eventually, she was diagnosed as having cerebral palsy. Catherine's care was an emotional and physical burden to her mother, and as the child approached the age of two her parents and family physician were considering placing the infant in a long term care facility. That's when a case manager stepped in.

Catherine, and others like her, is one of an estimated 10 percent of the population whose medical conditions account for 70 percent of all health care spending. While managed care and other cost containment strategies help prevent overutilization and unnecessary care for most of the population, cases like Catherine's require individual attention. In that way, costs can be prevented from running amok and health benefits can be put to their most appropriate uses.

Individual case management, sometimes called "large" case management, has been around for years. With return on investment ranging from $5 to $11 for every dollar spent, some form of case management is insisted upon by most employers for their insured groups, and can be provided by either insurance carriers or specialized vendors. The goals are usually two fold: contain costs, and provide quality care better tailored to the needs of the patient. In recent years, many employers have become more involved in directing the way their case management programs are run, and some are even doing it themselves.

Southern California Edison

As with just about every other form of health care at Southern California Edison, the case management program is home-grown. Although the Rosemead, Calif.-based company's primary business is to generate electricity--not health care--it has made as profound a commitment to manage its employees' health care benefits as it has to any other strategic business unit. "Medical case management is a critical component of our health care strategy," says Jacque Sokolov, SCE's vice president and medical director.

About 15 percent of the company's insureds use 80 percent of its health benefit dollars. In an attempt to contain those costs, SCE began its own medical case management program in March 1990. The program manages care for employees in its indemnity plan, HealthFlex. "In the first 10 months of the program, we were able to achieve more than $1 million in savings," notes Joyce Johnston, SCE's manager of patient care services. "We've seen savings of $7 to $10 for every dollar we've spent."

Johnston, who heads the company's utilization management, quality assurance, and case management programs, says that when SCE brought its case management in-house last year--in order to achieve even more control over large case treatment and spending--it had 20 cases and one case manager. A little more than a year later, she has two case managers handling about 63 cases. Prior to implementing the program, SCE had been using vendors and patient care coordinators. "We still vend out if the case is outside California," she says. "We have a total of 55,000 plan participants and we cover about 50,000 square miles in Nevada, Arizona, and northern California. Our case managers don't go out of state. However, we have developed our own resource base of vendors in those areas."

Waving the flags

Case management is done best when it's integrated with utilization management, notes Johnston. While referrals can come from anywhere--employees, their supervisors, or family members--they are typically flagged during the utilization management process. The nurses who do utilization management are called patient care coordinators. They use a computerized system that flags about 30 diagnoses most likely to need case management. Those diagnoses include all organ transplants and cancers, chronic respiratory diseases, strokes, premature newborns, head traumas, myocardial infarctions, and most back injuries.

The system works like this: when a patient is admitted into the hospital, the patient care coordinator assesses on the very first day whether the patient falls into one of those categories or might need more services than usual. The patient is then referred to the case manager, who makes an assessment by telephone first, speaking with the physician, nurses, and other caregivers at the hospital as well as with family members. Then the coordinator does a physical assessment and develops a care plan. (See box.)

"Sometimes patients need a lot of support, other times they need referral to community resources, and at other times specific services need to be coordinated; for example, providing transportation for a cancer patient who has no family and has to travel to and from treatments," Johnston explains.

Sokolov notes that case management is doing "exceptionally well" in areas of high cost like heart transplants and AIDS, but doesn't work as well, or at least is much more difficult to evaluate, in medium-cost areas. A good example of a medium-cost area where the effectiveness of case management still needs to be demonstrated, Sokolov asserts, is arthroscopic surgery.