Plan Designs: Disease Management Programs

This article provides an overview of disease management programs and discusses how employers are implementing these integrative care plans to help reduce health care costs due to chronic conditions.

Chronic disease is the leading cause of death and disability in the United States, affecting more than 130 million people and causing an average of seven out of every 10 deaths each year. It is also the largest, fastest-growing service group in health care, comprising over 86 percent of all health care costs. In addition, two-thirds of Medicare spending is used for those who have five or more chronic conditions. As a result, disease management programs are being implemented across the nation to help fill the gaps in America’s current health care system.


What is disease management?

Disease management (DM), also known as care management, health management or disease self-management, is the concept of reducing health care costs and/or improving the quality of life for individuals with chronic disease conditions by preventing or minimizing the effects of a disease through integrative care. DM has evolved from managed care, specialty capitation and health service demand management.


DM refers to the processes and healthcare professionals concerned with improving or maintaining health in large numbers of people. DM traditionally focuses on common chronic illnesses, and reducing future complications associated with these diseases. Some of the most common types of conditions addressed by DM programs include coronary artery disease, renal failure, hypertension, congestive heart failure (CHF), obesity, asthma, cancer, arthritis and depression. Some DM programs also address rare diseases such as sickle-cell anemia and occupational conditions such as lower back pain.


How are DM programs designed?

In the United States, DM is a large industry with many vendors. DM is especially important to health insurers, agencies, trusts, associations and employers who offer health insurance. The idea behind DM is that with the right tools, experts and equipment, medical expenses can be minimized quickly and resources can be provided more efficiently. To be effective, these programs utilize web-based assessment tools, clinical guidelines, health risk assessments, outbound and inbound call-center-based triage, best practices, formularies and numerous other devices, systems and protocols.


Experts such as actuaries, physicians, medical economists, nurses, physical therapists, statisticians and human resource professionals provide input used to create DM programs. Equipment including mailing systems, Web-based applications (with or without interactive modes), monitoring devices or telephonic systems are used as well.


DM programs are designed to be most successful in populations where the following characteristics apply:

  • High prevalence of the condition to be managed;
  • Low turnover among enrollee population;
  • Ability to identify patients who are at risk; and
  • Patient population that has a high illness severity and, consequently, high use of medical resources.


Characteristics used to determine what conditions DM addresses include the following:

  • Once contracted, the disease remains with the patient for the rest of his or her life, or for an extended period of time.
  • The disease is often manageable with a combination of pharmaceutical therapy and lifestyle changes.
  • The average cost of chronic patients is sufficiently high enough to warrant the expenditure of employer or health plan resources to manage the condition.


DM programs are likely to affect many outcomes simultaneously, so evaluation of a program’s value should be designed to include data from the following resources:

  • Clinical outcomes;
  • Financial outcome measures;
  • Humanistic factors, including patient quality of life, satisfaction and retention; and
  • Quality measures that are publicly reported by organizations like the National Commission of Quality Assurance (NCQA), the Utilization Review Accreditation Commission (URAC) and the Joint Commission on Accreditation of Healthcare Organizations (JCAHO).


Does DM extend to pharmacy practices?

Disease management is becoming much more prevalent in pharmacy practices as well. Pharmacists are no longer limited to dispensing medication and safeguarding the distribution of drugs. Instead, many pharmacists are now actively involved in the collaborative management of patient diseases such as diabetes, congestive heart failure (CHF), chronic pain management, anticoagulation, asthma and HIV-AIDS.


Pharmacy involvement in disease management can include patient education, proper drug administration, therapeutic drug monitoring, laboratory testing and interpretation, and initiating and modifying medication regimens based on clinical assessments. This growing trend, known as “pharmaceutical care,” is enhancing the status of the pharmacist as a provider of specialty health care.


What kind of return-on-investment (ROI) do DM programs deliver?

The overall goal of DM is to ease the disease path, not to cure the disease. Therefore, improving quality and activities for daily living are first and foremost. Improving cost in some programs is a necessary component as well. While most DM vendors offer ROI for their programs, some advocates of DM systems believe that reductions in longer-term problems may not be currently measurable, but may warrant continuation of DM programs until better data is available in 10 to 20 years.


There are many ways to measure ROI:

  • Medical cost savings;
  • Benefit package distinction;
  • Employee satisfaction levels;
  • Absenteeism or disability rates;
  • Safety incidents or workers’ compensation claims; and
  • Job productivity loss (presenteeism).


NOTE: Unless rigorous applications of valid statistical methods are applied to DM measurements, ROIs generated have a risk of misleading purchasers.


How do employers implement a DM program?

Employers wishing to implement a DM program can either create their own initiatives or purchase services from DM companies or vendors. Proprietary DM programs are developed and offered by Disease Management Organizations (DMOs), entities that provide some, but not all, of the following six components that define DM:

  1. Population identification process.
  2. Evidence-based practice guidelines, including research from published epidemiologic, demographic and sociologic sources.
  3. Collaborative practice model that includes physicians and support-service providers.
  4. Patient self-care management education that includes primary prevention, behavior modification, compliance and surveillance.
  5. Process and outcome measurement that includes evaluation and management.
  6. Routine reporting and feedback loop that includes the flow of communication between patients, physicians, health plans, ancillary providers and practice profiling.


It is important to note that full-service DM programs must include each of these six components in a program design, and programs consisting of fewer components are only considered DM support services.


Are there regulations regarding DM programs?

Yes. Most DM programs require a third party to access enrollees’ medical records. Federal law and, in many instances, state law protect the privacy of medical records. DM programs must comply with all applicable state and federal privacy laws.


Also, a number of states have implemented their own DM programs to help contain costs while also improving health care quality and patient outcomes. In addition to integrating disease management into their Medicaid programs, some states have encouraged employee benefit plans for state workers and private health insurers to incorporate DM programs into their health coverage.


What are some challenges of DM programs?

The key to disease management is outreach and enrollment. Though DM programs help people with whom they engage, they reach only a small fraction of eligible people. Strong and consistent encouragement is the key to success, as statistics show that most people contacted to join a DM program will resist enrollment. Often people diagnosed with chronic diseases are not anxious to discuss or contemplate how the disease affects them, and choose not to enroll in DM programs.


Disease Management programs may not be the right solution for all employers. We welcome the opportunity to help your organization examine its plan design(s) and make recommendations for improvement. Please contact Nico Insurance Services, Inc. for assistance. (619) 667-2111