Are We Asking the Wrong Questions About Disease Management and Medicare?

A recent study suggests that Medicare’s Disease Management (DM) experiment has failed to cut medical costs. DM advocates argue that Medicare’s methodology was flawed. So what’s the answer? A New York Times article asks: Does Medicare DM cut costs, or should it be stopped?

That may be the wrong question.

As far the first part of the question is concerned, it wouldn’t be surprising if the answer turned out to be “no.” Revenues for disease management companies grew from $78 million in 1997 to $1.2 billion in 2005, according to the Disease Management Consortium, largely on the belief that DM programs cut medical costs and were therefore a good investment for private payers. Yet to date, no study has demonstrated conclusive medical cost savings from DM.

That doesn’t, however, mean that DM is a bad idea - especially for Medicare. 160,000 Medicare beneficiaries have been served by the Medical Health Support program, which provided chronic disease patients with periodic calls from nurses. The nurses give patients medical information, encourage them to seek treatment, remind them about their medical needs, and provide other forms of support.

The DM companies had financial incentives: Either achieve a 5% reduction in medical costs for their enrollees, net of service costs, or return their fees. When it became clear last year they weren’t going to make that goal, Medicare relaxed their requirements. Now, only a net savings is required in order for the vendors to keep their fees. It’s not clear if they’ll reach that goal, either. (The CMS pdf fact sheet politely describes the cost impact of these programs so far as “nominal.”)

It’s too early to draw definitive conclusions about this experiment, especially since the data are not yet publicly available. But here are some thoughts to consider:

• Cost savings may not be the appropriate goal for DM with a population of this kind. Convenience (especially for those with limited mobility or money) and health improvement outcomes are also worthwhile objectives. The program should be evaluated for these indicators, and not for cost alone.
• While the entire program may not be cost-effective, elements of it might be. Medicare should continue the experiment under modified conditions.
• There may be opportunities to reduce program costs and improve efficiencies while delivering similar results.

Senators from the home states of the companies involved, including John Kerry and Lamar Alexander, think the experiment should be continued. The Times implies they’re just providing a constituent service to home state employers, but they may in fact be right. There is more to be learned about the role of DM in Medicare, and in the overall health system.

Overall, the DM industry is likely to experience a shakeout in the next year or two - for both private and public payers. Assumptions about its cost-effectiveness are likely to be overturned. The most likely end result? A re-engineered DM concept, which differs from today’s both in design and in outcome measurements. Medicare can play a vital role in DM research, discovering which elements work, which need to be added, and which can be discarded.

Separate And Unequal: Healthcare in the United States

The nation commemorated the 40th anniversary of Martin Luther King’s death last week. Here’s a quote from him that didn’t get much play in the testimonials: “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.” Two recent studies highlights the lack of progress we’ve made in four decades, and proposals from John McCain and the Florida State Senate show how little resonance Dr. King’s words have in some corners of public life.

Studies by the Robert Wood Johnson Foundation and the Harvard School of Public Health provide more documentation for something many Americans know from personal experience: The United States is a nation living under medical apartheid. The South Florida Times summarized the studies’ findings as follows:

“… elderly black and Hispanic patients often received substandard care for common but serious conditions like heart attacks, congestive heart failure and pneumonia. Researchers say their data suggests that the nation’s healthcare system is racially and ethnically segregated, not just for the elderly, but across the board.”

Lead researcher, Dr. Ashish K. Jha, said:

“When we see ongoing segregation in housing and education [in America,] it may not be surprising that we’re seeing very different administration of care in hospitals that serve blacks and Hispanics versus hospitals that mostly serve whites. But we’re not talking about [failures of] high tech medicine. This is basic stuff, like failing to administer aspirin or beta blockers to patients suffering a heart attack; treatments that we’ve known about for 20 years.’’

These studies are consistent with earlier findings that, at all levels of incomes, black Americans die years earlier than whites. The infant mortality rate for African American babies is 2.5 times greater than it is for non-Hispanic whites, according to data from the National Center for Health Statistics, giving us the worst infant mortality rate of any industrialized nation on Earth, except Latvia. It should be noted that these recent studies demonstrate that Hispanics in this country also experience extreme disparities in medical care.

Are you OK with that? Then how about this? Lack of health insurance results in the deaths of 18,000 Americans each year, according to studies compiled by the National Academies’ Institute of Medicine. That equates to 49 or 50 deaths every day.

How are politicians responded to this ongoing health crisis among “the least of us”? The Florida State Senate is proposing to cut $803 million in health care financing for the low-income residents, the poor, and senior citizens - a figure the Orlando Sentinel calls “staggering.” Disabled Floridians and recent transplant recipients would be among those losing medical coverage. “This is a death sentence for a lot of people,” said a bone-marrow transplant patient. He’s right.

For his part, according to the Boston Globe, John McCain is still “working out the details” of his health plan. He’s already done enough. Although some friendly reporters are emphasizing his willingness to offer tax credits, rather than just tax deductions (as his GOP predecessors have done), his plan is the same prescription for disaster that Bush’s and Giuliani’s have been. Like them, he proposes to end tax benefits for employers providing health insurance, which would effectively scrap the current employer-funded system.

McCain would replace the employer system with a tax benefit that would fall far short of covering the added costs of health insurance, especially since the bargaining clout of employers would be scrapped for a free-for-all system of individual buyers without expertise or buying power. The result would be a plan that creates substantially higher out-of-pocket costs for working Americans without extending insurance to those currently uncovered.

McCain attempts to make his plan more politically palatable than his predecessors’ by speaking in vague terms about “high risk pools” and subsidies. But, except for the inclusion of tax credits as well as deductions, he has yet to differentiate his proposal from theirs in any concrete way. His refusal to place any requirements on insurance companies, together with his abandonment of the employer-based insurance system, would create enormous financial hardship for working people who suffer from cancer and other pre-existing conditions.

What about the poor and unemployed? It’s true that some might benefit from a tax credit - but the $5,000-per-family figure McCain mentioned wouldn’t cover premiums for very many lower-income people. And they’re unlikely to be able to afford the difference between $5,000 and the actual cost of insurance, which would likely be thousands of dollars per year. The net result? Continued lack of coverage for those currently doing without medical care.

Obama and Clinton supporters are free to continue their blood feud over which has the better health plan. I’ve argued that Obama’s is more politically feasible and, in the end, more progressive. Some colleagues in the health policy world disagree. But we all agree that Sen. Clinton’s plan would also be a vast improvement over McCain’s. And the actions of the Florida State Senate are unconscionable.

To be clear, we’re talking about two distinct policy issues here - the problem of the uninsured, and the ethnic and racial divide in American healthcare. But these two issues are closely related, and both cut to the heart of what it means to be a just society in the 21st century.