Disease management: patient management in disguise - State Policy Watch

Healthcare Financial Management, Oct, 2003

Seven of every 10 deaths in the United States are due to chronic health conditions, including heart disease, stroke, cancer, and diabetes, according to the Centers for Disease Control and Prevention.

Chronic diseases affect the quality of life of 90 million Americans. The costs of treatment for such diseases account for more than 75 percent of the nation's $1 trillion healthcare costs. These costs exact a particularly heavy financial toll on state health and insurance programs.

Chronic conditions are costly because of the length of treatment they require. Yet many such conditions also are among the most preventable, because the chances of developing them can be greatly reduced through a change in lifestyle.

Recognition of the potential cost benefits of preventing chronic conditions has spurred many states to implement disease-management programs. Such programs aim to lower state costs and improve beneficiaries' health status--and ultimately reduce the number of people who develop chronic conditions--through a coordinated health approach that reduces hospital and emergency department visits as well as duplicate tests and office visits.

Existing Programs

Twenty states have implemented disease-management programs in recent years: Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Maryland, Maine, Minnesota, Missouri, Mississippi, North Carolina, New Jersey, Oregon, South Carolina, Tennessee, Texas, Utah, Washington, and West Virginia.

The pioneer is Mississippi, which received a first-of-a-kind waiver in 1998 allowing Medicaid to experiment with paying pharmacists to monitor patients with common chronic diseases. Under an initiative enacted in 2002 and launched in April of this year, the state has enrolled almost 60,000 recipients in its disease management program: 25,000 for asthma, 13,000 for diabetes, and 20,000 for hypertension. The program, which is expected to save $8 million a year, is managed by a for-profit company, McKesson LLC, and is subject to a financial-impact study to determine savings and utilization trends.

New Legislation

In 2003, at least 10 states introduced legislation examining, creating, or changing disease management programs. Hall of those states have enacted disease-management legislation this year.

Delaware. At ask force within the Delaware Health Care Commission has been charged with examining issues surrounding disease-management strategies, including their potential to improve individual health, promote high-quality health care, and contain healthcare costs.

Indiana. Indiana amended its disease-management program by removing coverage of HIV/AIDS as a chronic condition and adding coverage of hypertension, asthma, diabetes, congestive heart failure, and coronary heart disease. A statewide pilot program addressing two of those diseases must be completed before the program can be fully implemented.

Iowa. The Iowa Department of Human Services has been directed to aggressively pursue chronic disease management to improve care and reduce costs under the state's medical assistance program.

New Mexico. New Mexico law requires managed care organizations (MCOs) to have disease management programs for medical-assistance beneficiaries that meet higher standards for coordinating efforts with and assisting primary care and safety net providers. The MCOs also must seek to adopt uniform key health status indicators. The state's Human Services Department is charged with designing a pilot disease-management program for the fee-for-service population that is based on key health status indicators, accountability for clinical benefits, and demonstrated cost savings.

Texas. Texas House Bill 1735 would require that the Texas Health and Human Services Commission work with major employer purchasers of insurance plans to ensure that managed care plans provide disease-management programs that cover chronic illnesses. The bill also would require that a study be conducted to evaluate the effect of implementing disease-management programs on patient outcomes and utilization rates.

Hopes for the Future

Although states are hopeful that disease-management programs will provide for improved quality of life, the real motivating factor for these programs often is the potential cost savings. Because the programs are fairly new, however, savings may not be realized for a few years.