Medicare Finds How Hard It Is to Save Money
By Reed Abelson
The New York Times
April 7, 2008
An ambitious three-year experiment to see whether the Medicare system could prevent expensive hospital visits for people with chronic conditions like congestive heart failure and diabetes has suggested that such an approach may cost more than it saves.
The test borrowed a practice long available through private health plans. Nurses periodically place phone calls to patients to check whether they are taking their drugs and seeing the right doctors. The idea is that keeping people healthier can help patients avoid costly complications.
After paying eight outside companies about $360 million since mid-2005 to try to improve such patients’ health, Medicare is still trying to figure out whether the companies were able to keep people healthier. But the preliminary data indicate that the government is unlikely to save money.
Several of the companies, including two that specialize in disease management, Healthways and Health Dialog, are pressing Medicare to continue the project in some fashion beyond the end of this year, saying the government mishandled the experiment.
“We haven’t proven anything,” said Dr. Jeffrey L. Kang, a former Medicare official who is now the chief medical officer for the insurer Cigna. The companies say Medicare signed up patients who were much sicker than they had expected. Instead of giving companies a chance to intervene before someone went to the hospital, Dr. Kang said, most of the patients were already so ill that it was “no longer a preventive program.”
George B. Bennett, the chief executive of Health Dialog, which is overseeing about 15,000 Medicare patients in western Pennsylvania, favors continuing the experiment, but with adjustments. He wants Medicare to give the companies more flexibility to manage patients in ways they say have already been proven to work among the employees they cover in commercial plans. Such measures, he said, include giving the insurer a bigger role in selecting the patients, with an eye toward identifying the ones most likely to be helped.
Medicare is already exploring other ideas, like the development of so-called “medical homes,” where a doctor with a team of other professionals oversees a patient’s care. A few doctors’ groups involved in a separate Medicare experiment have reported some success in saving the government money by more actively managing their patients’ care.
http://www.nytimes.com/2008/04/07/business/07medicare.html?hp
Comment:
By Don McCanne, MD
The presidential candidates claim that they will pay for expanding coverage to everyone by using the savings made possible though chronic disease management. But what is disease management, and will it save money?
The Medicare experiment with disease management has demonstrated what it should not be. The comments of the executives in the industry contracted by Medicare provide us with an understanding of the flaws of this model. They imply that Medicare was unfair because they selected patients with chronic disease to be managed by these private chronic disease managers. What?
To make the experiment work, the disease managers want to be able to select the patients themselves. We already have ample experience with this industry to know what that means. They want to select the healthy, low-cost patients and turn the expensive, high-needs patients over to the taxpayers. Cream skimming is already rampant in the private insurance industry. We certainly don’t need any more of it.
So what should disease management look like? The establishment of medical homes within a well-functioning primary care infrastructure would be the ideal model for chronic disease management. Although we are approaching a crisis in the shortage of primary care physicians, well trained nurse practitioners, as part of the primary care team, would be well positioned to use standard protocols plus clinical judgement to assist patients in the management of their chronic conditions.
Of course, that would be much simpler through a single payer national health program in which our abundant resources could be realigned to achieve this crucial goal. Imagine… using our resources more efficiently while achieving the goals of a high-performance system. Pipe dream? Don’t think so.
