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Disease Management Megatrends: State-of-the-Industry 2008 and Beyond Delivering on promises... January 2008 Vince Kuraitis JD, MBA Better Health Technologies, LLC www.e-CareManagement.com blog (208) 395-1197
...is a synthesis of major trends affecting disease/care management
...is continually updated. Look for in the upper left corner as a guide to significant changes since the January 2007 version.
...reflects the evolution of trends. Since early 2007 the wording of the megatrends relating to Medicare and Providers has changed significantly
Note: items with blue outlining are hyperlinked to original sources, e.g.,
MAGNITUDE: We are just scratching the surface of chronic disease challenges.
The Big Picture
Despite Efforts to Date, the Chronic Care Challenge is Growing
Over the next 10 years, the global incidence of chronic disease is predicted to increase by 17% , further fueling the global burden of disease. Several factors account for this driving force:
The success of modern healthcare in transforming formerly lethal diseases, injuries, and conditions (e.g., HIV, spinal cord injuries, diabetes, tuberculosis, and multiple sclerosis) into chronic conditions that require continuous treatment;
Reductions in premature mortality and increasing longevity resulting in longer-lived chronic conditions and health-related dependencies; and
Increases in the behaviors (e.g., unhealthy diet, physical inactivity, and tobacco use) that significantly contribute to many prevalent chronic diseases.
Chronic disease is gaining increasing global attention....
The $30 Billion Potential DM Market is Barely Penetrated Source: Chris Selecky, President of DMAA and Chair, Lifemasters, 2005 Available Market based on Wachovia Capital Markets Formula Medicaid Market Opens with FL Healthplans and Self Funded Employers FEHBP Plans Start Adding DM CCIP Phase 1 CCIP Expansion
Is a $30+ Billion DM market projection realistic???
DM’s primary economic value proposition comes from avoiding hospital and ER costs.
CMS projects that U.S. hospital costs in 2015 will be $1.1 Trillion (not a typo).
Q. What’s $30 B as a percentage of $1.1 T?
INTEGRATION: The 50 year tide is shifting toward integration, away from specialization.
There are Multiple Dimensions to “Integration”
Information and communication technologies (ICT)
Convergence of devices
Local care provider integration (especially physicians)
Physical health and mental health
To Date DM Clinical/Business Models Have Emphasized Specialization
Specialized companies providing services
Specialized contracting/financing model -- guaranteed savings
Specialized focus on individual diseases (migrating toward multiple comorbid conditions)
Specialized technologies : predictive modeling, call centers, medical management workflow software, etc.
Specialized delivery models are developing for unique customers
Managed Care Organizations
Medicaid (in various flavors)
Special Needs Plans
State high-risk pools
Highest cost/risk patients
Future Care Delivery Models Will Be Integrated Around Patients’ Homes & Communities
MEDICARE: While Medicare has endorsed the need for chronic disease management, disappointing results from recent demo projects make future direction unclear. The Event-of-the-Decade for DM
Medicare Understands the Problem: Chronic = Disproportionately Expensive Source: Johns Hopkins, Partnership for Solutions, 2004
Medicare DM Demos: Little Evidence of Success
Medicare Health Support (MHS) appeared to be the favorite son demo to expand DM into Medicare
MHS has attracted worldwide attention
Legislation requires roll out if successful
Elements of MHS model
Focus on highest cost/risk population (frail elderly)
Disease management -- carve out to private companies & health plans ( vs. CCM)
Guaranteed 5% savings business model
Short term ROI
Randomized control trial
Results to-date: little evidence of success. See First “Official” Report on Medicare Health Support DM Pilot Finds Virtually No Evidence of Success , Disease Management and the Medicare Health Support (MHS) Project: “Houston, we have a problem.”
Early MHS Results Are Not Encouraging
First, although the intervention and comparison groups are similar at randomization, our analyses reveal that an unexpected pattern in PBPM differences between intervention and comparison groups emerges between the time of randomization and the start of the MHS pilots.
Second, participating beneficiaries tend to be a healthier and less costly subset of the intervention group. Thus, high participation rates will likely be a factor in the ability of the MHSOs to impact their assigned intervention populations . And,
Third, fees paid to date far exceed any savings produced . The negotiated MHSO monthly fees are a much higher percentage of the comparison groups’ PBPMs than the percentage savings on payments through the first 6-month pilot period. Fees negotiated by the MHSOs with CMS have not been covered by reductions in Medicare expenditures, let alone an additional 5% savings in Medicare payments. Without a substantial reduction in each MHSO’s monthly fee, budget neutrality after the first year is questionable .
Source: RTI International Report to Congress: Evaluation of Phase I of Medicare Health Support (Formerly Voluntary Chronic Care Improvement) Pilot Program Under Traditional Fee-for-Service Medicare , June 2007
Findings from Four Demonstrations
No effects on adherence or self-care
Only 3 of the 20 programs reduced hospitalizations or gross costs (4.5% reduction in MCC admissions)
Another had effects for CHF subgroup in urban counties
Some patients too ill, others not at short-run risk:
But targeting is not the major problem
Programs don’t collect timely hospitalization and Rx info
Usual care providers are minimally engaged
Why Doesn’t DM Work Better?
Programs led by marketers, not clinical experts:
Ineffective use of available data
Unfamiliar with unique needs of the elderly
Contact info poor in population-based models
Improvements in quality of care don’t guarantee better patient outcomes in short run
CMS’ Take on Medicare DM Demos Source: Linda Magno, CMS, presenting at the Patient Centered Primary Care Collaborative Summit , November 2007
Many Other CMS Demo/Pilot Projects Involve Patients With Chronic Diseases
Medicare is undertaking a wide range of demonstration/pilot projects
Many directly involve patients with chronic conditions
Physician Group Practice (PGP)
Care Management for High Cost Beneficiaries (CMHCB)
Special Needs Plans (SNP)
Medicare Medical Home demonstration (discussed later)
What are some of Medicare’s other options toward an optimal chronic care management program?
From: a guaranteed 5% savings business model
To: considering many alternative payment mechanisms: capitation, shared savings, pay-for-performance, and/or fee-for-service DM.
From: focusing on short-term ROI
To: focusing on medium-long term ROI, quality improvement & compression of morbidity
From: DM carve outs to private companies & health plans
To: exploring options to re-integrate care providers into care management processes, e.g., the Chronic Care Model, the Medical Home model or a managed care model (e.g. utilization review, case management, pre-certification, etc.).
From: focusing on high-risk, chronic, co-morbid patients
To: including programs to address mainstream Medicare patients with prevention and population health approaches
From: rigid implementation of inflexible program structures
To: Rapid Learning Models. Open up the data, while protecting for personal identification, to all “qualified” people to learn what can be learned in a timely fashion. The process should be transparent and open and available to the taxpayers who have funded these demonstrations.
From: is MHS working as originally designed?
To: what’s the optimal chronic care management program, financing structure, and evaluation model for Medicare?
PROVIDERS: Care providers have woken up to DM opportunities and threats; they are promoting the Chronic Care Model and the medical home.
Model #1: Disease Management Model
Medium sized, privately & publicly held companies
$2 billion revenues in 2007 (Source: DMPC )
Payers are increasingly assembling DM components
Telephonic services, centralized call centers
Support patient life style change
Promote evidence based practice
Started as carve-out model
Guaranteed savings promoted by DMPC
Focusing on highest cost, highest risk patients
Challenges: physician buy-in, proprietary IT
Model #2: Chronic Care Model
Pioneered at Group Health
Transformation of health care
Restructuring of physician practice
Challenges: no reimbursement, academic/research focus
23 Aspects of the Chronic Care Model Delivery System Design Decision Support Clinical Information Systems Self-Management Support Health System Organization Links to Community Resources Source: Pearson, M. et. al. Chronic Care Model Implementation Emphases , Rand Health Presentation to Academy Health Meeting, 2004 Leadership support Provider participation Coherent system QI Guidelines Provider education Expert support Registry Info for care man. Performance data Care man. roles Practice team Care coordination Proactive follow-up Planned visit Visit system changes Patient education Patient activation Self-man assessment Self-man resources Collaboration on decisions Guidelines to patients For patients For community
Who Wrote This Statement?
“The literature has correctly indicated that the term ‘care coordination’, which is often used interchangeably with the term ‘care management,’ refers to a variety of activities.
managing the transition of care across settings
use of patient registries to allow for population-based care protocols, the
use of frequent follow-up with patients to promote treatment plan compliance and to obtain healthcare data
use of clinical practice guidelines , including feedback to the physician regarding their degree of compliance with the guidelines
teaching of disease self-management skills to patients....”
Was it written by a DM company? a home health agency? a health plan?
No, it was written by...doctors!
Source: American College of Physicians Position Paper, Reform of the Dysfunctional Healthcare Payment and Delivery System , April 2006
...and here's the punch line:
“ These care coordination activities are at the core of what defines a primary care physician.”
The Cats are Herding: the Medical Home Model is Gaining Momentum With Physicians...
December 2006 – Congresses passed the Medicare Medical Home Demonstration (MMHD)
MMHD similarity to MHS: high cost, chronic patients; multiple comorbidities
MMHD differences from MHS
No requirement of 5% guaranteed savings
Physicians can keep 80% of savings
An RFP for the MMHD will be issued early in 2008
...but there are many details to work out and questions to address.
How will a MH be defined, recognized (e.g., see NCQA’s program ), and measured?
What should payment levels be for the MH?
Will physicians invest time and $$ to participate?
Will physicians change behavior and workflow?
Will physicians want to collaborate with payers?
Will the Medicare Medical Home Demo be successful?
Will other pilot projects prove successful?
The Medical Home Model – Paying for Technology and Process Improvement
Proposed payment framework for the medical home model includes $$ for:
coordination of care
health information technology
secure e-mail and telephone consultation;
remote monitoring of clinical data using technology.
MAKE, ASSEMBLE, BUY? Fewer are buying as health management becomes increasingly strategic.
Health Plan Views Of the DM Make/Buy/Assemble Decision Have Evolved
7 years ago
"DM is really complicated"
"It will take us 18 months to get started"
"Start up cost are significant“
"DM isn't rocket science; we've learned from the vendors"
"Care management is increasingly strategic; it is a core competency that we need to do ourselves"
"We'll get better integration if we do it ourselves; medical management workflow software is key”
“We need to assemble DM components and make sure that we keep control over key leverage points”
Health Plans Moving From ‘Buy’ to ‘Build’ DM Model
Disease Management News, September 25, 2006
Is the Trend Toward “Assembling” a Major Threat to DM Companies?
Remember...the market potential for DM is $30+ Billion. There’s a lot of growth to go around.
TECHNOLOGY: DM in your home and your pocket. Health care anywhere.
The Full Rollout of DM Technology Will Take Time
Technologies are Converging
The Healthcare Unbound Market Opportunity Is Huge (Forrester)
2008 Could Be A Breakout Year for Remote Patient Monitoring
Watch for New Platforms Facilitating Interoperability & Transportability
Personal Health Records (PHRs)
Corporate efforts – Microsoft HealthVault, Google Health, Dossia
Hospital At Home
Next Generation Technology – “You Ain’t Seen Nothing Yet”
Will The DM Community Be Leaders Or Laggards In the March toward Interoperability?
A) The Full Rollout of DM Technology Will Take Time
Thousands of Potential Applications
Do the Math.
B) Technologies are Converging
Personal communications devices -- PDAs, cell phones, etc.
Broadband -- cable, DSL, satellite
Digital cameras, video
Wireless -- 802.11, Bluetooth, RFID, etc.
Electronic Health Records (EHRs)
Personal Health Records (PHRs)
Remote patient monitoring
Self care support
Physician/patient secure messaging
Decision support systems
Computerized Physician Order Entry
Quality evaluation web sites
Patient reminder systems
Focal Points for Convergence Home Networks, Smart Phones, EHRs
PHR/ EHR eHEALTH Smart Phone Home Network
Role of IT in Disease Management Patient Facing DM Provider Facing Patient-provider communication tools (IVR, email) Monitor Engage Intervene Educate, Coordinate, Treat Identify, Validate, Stratify, Enroll Call center Personal Health Record Predictive modeling Remote monitoring (biometric, tele-monitoring) Personal assessment tools (HRA) Educational tools (websites, audio library) Electronic Medical Record Decision support tools (CDSS) Outcomes, Feedback, Follow-up Clinical integration tools Disease registry
C) Forrester says “$34 B Market for Healthcare Unbound Technologies by 2015” 80% is Chronic Care Total Acute Chronic ADL/elder $0.35 $US (billions) $0.37 $0.47 $0.59 $0.73 $0.98 $1.2 $1.6 $2.0 $2.4 $3.0 $3.7 $0.10 $0.13 $0.22 $0.38 $0.65 $1.2 $3.8 $12.1 $23.1 $26.3 $25.7 $26.7 $0.00 $0.00 $0.00 $0.00 $0.01 $0.02 $0.65 $2.0 $3.6 $3.5 $3.0 $3.2 $0.45 $0.50 $0.69 $0.97 $1.4 $2.1 $5.7 $15.7 $28.7 $32.3 $31.7 $33.6 (Numbers have been rounded)
D) 2008 Could Be A Breakthrough Year For RPM
Continua begins to address major challenges
Interoperability of devices
But other challenges remain
The Multiparameter Remote Patient Monitoring (RPM) Market is Migrating...
High unit prices rooted in the industry's early focus on medical device markets and business models
Proprietary devices, proprietary IT, non-interoperable data
Low unit volume, moderate margins per unit
Competition based on vendor lock-in through high switching costs
Low unit prices as the technology evolves toward consumer markets and consumer business models
Intereroperable devices, common IT platforms, and interoperable data
High unit volume, low margins per unit
Competition based on value-adds and service
...but Consider the Systemic Barriers
HIPAA: Privacy/confidentiality issues
Friendly user interfaces
E) Watch for New Platforms and Networks Facilitating Interoperability & Transportability of Personal Health Information
“ The sine qua non is sharing data”
Adam Bosworth, former director of Google Health
Personal Health Records
Corporate efforts – Microsoft Health Vault, Google Health, Dossia
Hospital at Home
2 models of PHRs
Tethered: typically to a health plan, provider, employer
Each has challenges
The “populating the PHR with data” problem
200 PHRs on the market
Generations of PHRs
1st generation: PHR as “APPLICATION” -- an online repository of personal health information (PHI)
Next generation – PHR as PLATFORM
Source: Markle Foundaton A Common Framework for Networked Personal Health Information , 2006. See also: RWJF Project HealthDesign A New Vision for Personal Health Records , May 2007
Microsoft HealthVault – Launched October 2007 More info: Microsoft’s HealthVault: User Manual = C-, Strategy to Create a New Ecosystem = A
Watch for Google Health in 2008 More info: Connecting the Dots…Google Health Promises to Create AND Dominate Next Generation PHRs
Watch for QUALCOMM’s Mobile Platform (LifeComm) in 2008 More info: Disease Management Going Mobile & Retail: QUALCOMM’s Health Care MVNO
The Value Proposition of Mobile Technology for DM is Huge!
Chronic Disease/Condition Management is migrating
From a clinical based model
Toward a behavior change model
How can you optimize behavior change without 24x7x365 connectivity to the patient?
Hospital at Home (HAH) Dates Back to the 1960s – Almost Completely Outside the U.S.
The Most Significant U.S. HAH Initiative is at Johns Hopkins
Current Tech & Apps are a Collective Platform to Support HAH
Remote Patient Monitoring
Personal Health Records
Hospital At Home
F) The Next Generation of DM Technology When the Technology is Just “There”
“Sense and Simplicity”
G) Will the DM community be leaders or laggards in the movement for health information technology interoperability?
BEHAVIOR CHANGE: DM is moving from a medical to a social model; behavior change has become the Holy Grail.
The Holy Grail: Changing behavior to prevent disease
Interactive Data Systems
All of the above plus more real time two way remote interaction between pts., disease managers, and MDs (e.g. interactive TV, implantable devices, PDAs, cell phones, other wireless technologies)
More than 50 years of research on health behavior change has not provided us with easy answers in understanding patient nonadherence.
Despite the renewed interest in adherence research, we have a long road ahead in translating behavior change principles into practical application.
Actionable messages are critical to success.
When physicians and other health care professionals use their referent power they can be influential in patient adherence....higher patient adherence is associated with physicians who create warm personal relationships with their patients, and work with them to address adherence and lifestyle issues.
Expanding referent power beyond physicians to patient-affiliated reference groups may be challenging to DM, but it may increase the influence of adherence messages exponentially.
Source: Turpin, R. et. al. “Patient Adherence: Present State and Future Directions” Disease Management , December 2007
CLINICAL AND ECONOMIC ROI: Round one is over, DM wins; Round 2 has just begun.
The DM/ROI Debate Of the Past 10 Years Has Not Always Been Framed Constructively
“DM has ROI”
“No it doesn’t”
“Yes it does”
“No it doesn’t”
“Jane, you ignorant slut”
Reframing the DM/ROI Debate: 2 Seemingly Contradictory Statements
#1: Whether DM provides ROI has become irrelevant
#2: The DM/ROI debate will continue to be scientifically evaluated for the next decade
#1: The DM/ROI Debate Has Become Irrelevant DM Has Gone Mainstream
#2: The DM/ROI Debate Will Continue To Be Scientifically Evaluated For The Next Decade
#1 = DM today
#2 = Continuing DM ROI and outcome measurement for the future
No evidence Preponderance of Evidence Beyond A Reasonable Doubt Clear and Convincing Evidence Absolute Certainty 0 100 Level of Proof
Source: With attribution to Gordon Norman, MD, MBA, Chief Medical Officer of Alere
Will We Ever “Get Along” and Measure Outcomes and ROI Consistently?
In 2006, DMAA released the first volume of its long-awaited Outcomes Guidelines Report , which described industry consensus approaches to measuring financial outcomes in disease management.
In 2007, a follow-up document, the Outcomes Guidelines Report Volume II, added clinical measures.
In 2008, a third volume of the report is planned for publication.
These are significant steps...but don’t expect the debate AND controversy about ROI to end soon.
Will employers stay the course in supporting DM?
Can pay-for-performance P4P initiatives align incentives?
Will retail clinics start doing DM in a big way?
Can U.S. style DM be exported to international markets ?
Will Consumer Driven Health Plans (CDHPs) be the spark to ignite a consumer model of chronic disease management?
How will the 2008 elections affect health policy? While DM has received bi-partisan support, dramatic system reforms (e.g. physician reimbursement) are possible.
APPENDIX A Better Health Technologies, LLC
Better Health Technologies, LLC
Technology and health care delivery are shifting:
From: Acute and episodic care delivered in hospitals and doctors’ offices
To: Chronic disease and condition management delivered in homes, workplaces, and communities
BHT provides consulting, business development, and speaking services to assist companies in: 1) Understanding the shift 2) Positioning – what’s the right strategy, tactics, and business model? 3) Integrating your offering into the value chain – what are the right partnerships?