Disease ManagementNational Policy Issues

Christobel E. SeleckyPresident, DMAA

Executive Chairman, LifeMasters Supported SelfCare

The Disease Management ColloquiumPhiladelphia, PAJune 22, 2005

DMAA Vision and Mission

• Our vision is that every person has access to coordinated, comprehensive, evidence-based care. 

• Our mission is to be a catalyst to change the system to that end. 

• Our activities to achieve that mission are advocacy, education, research, and policy development.

Societal changes

• Epidemic of risk factors•Addiction to quick fixes

•Aging parents•Lack of extended family

Delivery system

•Physician supply•Lack of IT infrastructure

•Rapidity of medical advances•Lack of time

Cost concerns

•Managed care backlash•Premium increase cycle

•Advances in tech & pharma•Worker productivity

Our healthcare “system” is facing great challenges

Demographic factors

•Baby boomer generation•Consumerism

•Aging population•Longer life expectancy

These Issues Lead to Gaps (Underuse of EBM)

People with Chronic Conditions only Receive 56.1% of Recommended Care*

• Only 24% of people with diabetes received three or more HbA1c tests in a two year period

• Only 45% of people presenting with an MI received beta-blockers

Condition

% Not receiving Recommended

Care

Diabetes 54.6%

Hyperlipidemia 51.4%

Asthma 46.5%

COPD 42%

CHF 36.1%

Hypertension 35.3%

CAD 32%

The Quality of Health Care Delivered to Adults in the US *McGlynn, Asch et al, NEJM 2003; 348:2635-48

And Increasing Healthcare Cost

           

               

US Healthcare Expenditures as Percent of GDP

0.0%

5.0%

10.0%

15.0%

20.0%

1960 1970 1980 1990 2000 2003

15.3%

Total US Healthcare Expenditures(billions)

$27 $73$246

$696

$1,309 $1,421 $1,553$1,700

$2,800

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

1960 1970 1980 1990 2000 2001 2002 2003 2010

Source: CMS, 2005

Government Cost Trends

Federal health spending has increased from 4.2% of Federal outlays in 1965 to a projected 29% in 2010

Source: CMS, OMB

0%

20%

40%

60%

80%

100%

1965 1975 1985 1995 2005 estimate

Federal Healthcare Spending Other Federal Spending

Businesses spend the equivalent of one-half to two-thirds of their after-tax profits on healthcare. Healthcare accounted for 7% of their employees’ total compensation from 1993 to 2000.

Employer Cost Trends

Source: Centers for Medicare and Medicare Services, as reported by Cowan et al., 2002

0%

20%

40%

60%

80%

100%

1993 1994 1995 1996 1997 1998 1999 2000

Per

cen

t o

f P

rofi

ts

Private Business Expenditures for Healthcare as a Percentage of Business Profits

Before-Tax Profits

After-Tax Profits

Employer Cost Trends

Washington Post, February 11, 2005

Healthcare Premiums in the U.S. Constantly Cycle Up and Down

Something has Changed: Longest “Up” Cycle in 40 Years

10.20%

15.90%

12.50%11.30%

4.80%

6.60% 6.80%

8.40%9.60%

10.90%10.40%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

1970 1980 1988 1993 1997 1998 1999 2000 2001 2002 2003

Growth in Private Health Insurance Premiums as Measured by National Health Expenditure Data

Managed Care Inflection Point

DMStarted

DMInflection

PointManaged Care

Started

Managed Care Backlash

Source: CMS, Office of the Actuary

Employer Strategies Vary

Source: New Reality, New Choices: Ninth Annual National Business Group onHealth/Watson Wyatt Survey Report 2004 © 2004 Watson Wyatt Worldwide

Employer Responses to Rising Healthcare Costs

6%

7%

18%

24%

25%

1%

6%

13%

0% 5% 10% 15% 20% 25% 30%

2003 2002

Allow employees to purchase insurance directly

Offer high-deductible plan(with reimbursement plan)

Offer high-deductible plan(no reimbursement plan)

Significantly increasepoint-of-care cost sharing

Significantly Increase Premiums

Cost Shifting will no Longer Work

Source: Centers for Disease Control, 2004

Annual Healthcare Expenditures(billions)

$1,700

$1,400

$300

Total Chronic Conditions All Other

Major Goals of Disease Management

• To close the significant gaps in evidence-based care for individuals with chronic conditions

• To support the control of escalating costs associated with the increasing prevalence of chronic disease

DMAA Definition of DM

• A system of coordinated healthcare interventions and communications for populations with conditions in which patient self-care efforts are significant, supporting the physician/patient relationship and their plan of care

• Emphasizes prevention of exacerbations and complications utilizing evidence-based practice guidelines and patient empowerment strategies

• Evaluates clinical, humanistic and economic outcomes on an ongoing basis with the goal of improving overall health

Disease Management Components (DMAA definition)

• Population identification processes • Evidence-based practice guidelines

• Collaborative practice models to include physician and support-service providers

• Patient self-management education (may include primary prevention, behavior modification programs, and compliance/surveillance)

• Process and outcomes measurement, evaluation, and management

• Routine reporting/feedback loop (may include communication with patient, physician, health plan and ancillary providers, and practice profiling)

Objective of Disease Management

To help each individual achieve optimal health by:

– Closing the gaps between recommended and actual care (promoting evidence-based medicine)

– Encouraging patients to adopt a healthy lifestyle (promoting self efficacy)

DM is Evolving Toward Multiple Conditions and Prevention

Behavioral Risk Factors

ChronicCHF

Clinical Risk Factors

Our Path1994-98 1998-2002

Current

DM Also Expanding its Scope – Integrating with Health Mgt.

PopulationHealth

Improvement

HealthBenefits

Administration

MedicalManagement

Services

DiseaseManagement

Programs

WellnessLifestyle Mgmt.HRA/DM “Light”

Maturity of DM Model Varies by Market Segment

Research & Development Growth Maturity Decline

Government

Employers

Health Plans

The Standard of Proof is Evolving as DM Matures

No financial downside –

pay for performance

Fixed financial penalties for

missing quality or process

measures

30% - 50% fee risk all on quality

or process measures

50% fee risk on financial

outcomes

50% fee risk on quality

100% fee risk all on financial

outcomes

New Markets

New Relationships

Established Markets

Established Relationships

Higher program cost

Lower ROI

Lower program cost

Higher ROI

National Policy Issues

• Ensuring parity in availability of DM– Medicare– Dual Eligibles– Medicaid– Retirees/pre-retirees

• Addressing racial and ethnic disparities• Developing equitable payment methodologies• Ensuring broad stakeholder support• Moving upstream toward prevention (reinvesting savings)• Integrating DM with public health efforts• Measuring results• Scaling up while ensuring quality• Realizing the “promise” of DM

Challenges/Opportunities on the Horizon

• Pay for Performance

• Chronic Care Improvement Programs

• Health Savings Accounts

• Benefit Design

• Integration

The $1.7 Trillion Question(s)

• Can DM serve as a platform to reduce underuse and misuse?

• Can DM avoid suffering the fate of prior medical management efforts?

• Can DM generate enough savings in the long run to fund more comprehensive coverage and preventive efforts?

• Have we reached enough of a crisis to try?

Disease ManagementNational Policy Issues

Christobel E. SeleckyPresident, DMAA

Executive Chairman, LifeMasters Supported SelfCare

The Disease Management ColloquiumPhiladelphia, PAJune 22, 2005