Disease Management Program Fails to Cut Medicare Costs



Eight commercial disease-management companies using nurse-based telephone care programs failed to improve quality of care, reduce hospital admissions, decrease emergency department visits, or cut health care costs in a pilot project of fee-for-service Medicare patients reported in the Nov. 3 issue of the New England Journal of Medicine.

The Medicare Modernization Act of 2003 mandated that the Centers for Medicare and Medicaid Services test a commercial model for chronic disease management in its fee-for-service beneficiaries. The agency launched the Medicare Health Support Pilot Program to test this model in 2005, contracting with companies to cover approximately 30,000 chronically ill patients each in eight geographic locations, for a total of about 240,000 patients.

These companies used nurse-based call centers to assess the needs of patients with diabetes and/or heart failure. Each program used "coaches" to improve patients’ understanding of their disease(s), their ability to manage self-care, and their ability to communicate with providers.

Companies were required to meet preset targets for clinical quality and patient satisfaction, and to hold health care costs under a preset limit. An independent group, RTI International, won a competitive bid to evaluate the programs.

However, before the evaluation could be completed, five of the eight companies incurred such "substantial financial liability" that they terminated their programs, according to Nancy McCall, Sc.D., and Jerry Cromwell, Ph.D., of RTI International in Washington.

The 242,417 patients who constituted the study subjects were randomly assigned to receive the disease-management services being tested (163,107 subjects) or usual care (79,310 subjects). All the patients were "quite sick," requiring at least one hospitalization every year, having substantial comorbidities along with chronic heart failure or diabetes, and incurring an average of $15,000 in Medicare expenditures annually.

All companies were assessed, in comparison with usual care, on 40 evidence-based process-of-care measures. Only seven of these measures represented improvements over usual care, and the absolute percentage-point differences between the groups were found to be negligible.

The disease-management programs "had little success" in curbing hospital admissions and emergency department visits, both for any medical condition in general and for conditions amenable to ambulatory care in particular, the investigators said (N. Engl. J. Med. 2011;365:1704-12).

And average monthly health care costs increased substantially for all patients in the disease management groups.

Dr. McCall and Dr. Cromwell suggested several possible explanations for the results.

One is that medical care of elderly, chronically ill patients typically covered by Medicare and Medicaid is inherently difficult and expensive, unlike the care of the average patient covered by a commercial disease-management program. "The health coaches were surprised by the number of health and psychosocial problems that were prevalent among Medicare fee-for-service beneficiaries," they noted.

In addition, "the unpredictable nature and immediacy of chronic disease flare-ups call for real-time information on health status." The commercial disease-management programs, with their relative inflexibility, often failed to provide services before patients sought costly acute and/or inpatient care elsewhere.

These findings show "it is unlikely that simply managing the care of elderly patients through telephone contact or an occasional visit will achieve the level of savings Congress had hoped for when it mandated the Medicare Health Support Pilot Program," Dr. McCall and Dr. Cromwell said.

The results also "suggest that for such programs to be effective, they need to include intensive, costly, personal clinical attention," they added.

This study was funded, designed, conducted, and presented for publication by RTI International. No financial conflicts of interest were reported.

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