Health for life

In yesterday’s posting on care management nurse-staffing ratios and their associated costs, Peter McMenamin pointed out that a per member per month cost (PMPM) that ranged from $8 to $17 was a reasonable estimation.  Whats more, it compared favorably to the monthly management fee in the Comprehensive Primary Care Initiative. 

This is also important for Accountable Care Organizations that are grappling with the amounts that they’ll need to invest in care coordination to achieve the shared savings.  Assuming an ACO becomes accountable for 5,000 beneficiaries, that calculates out to between $480,000 and $1,020,000 per year.

But, asked the Disease Management Care Blog, should there be any differences in care management ratios and costs for Medicare, Medicaid and commercial insurance?  If it’s a commercial ACO, should it estimate $500K, while a Medicare ACO should plan lower ratios and invest $1M?

Peter McMenamin’s thoughts:

A parity between Medicare, commercial, and Medicaid is possible but not exactly plausible.  Thanks to many co-morbidities, Medicare patients have more different docs, more visits, and more drugs.  Unless they are particularly compliant with respect to medications, you’d expect Medicare patients to be more demanding.  Unless they return to a physician so frequently that care coordination is incidental or are hospitalized so much that their care is taken care of, they need considerable care management. If Medicare patients take more time for follow-up, etc. that might explain the difference between $20 PMPM and the somewhat lower PMPM estimates from my calculations.

Good point, of course.  Yet the DMCB is not so sure that there is a correlation between savings and the intensity of care management beyond a certain threshold for any patient of any age.  In addition, while persons with Medicare have greater illness burden, that doesn’t mean the day-to-day management, care plans and shared decision making for conditions like diabetes or heart failure making varies depending on a patient’s age.

Dr. McMenamin and the DMCB will keep their eye out for answers.  More to follow.

The Disease Management Care Blog feels your pain. 

You help lead a unique and innovative care coordination initiative.  Your program has some preliminary data that strongly suggests quality has increased while costs have remained neutral or gone down.  Patients are satisfied.  Docs are happy.  You even have a patient anecdote or two.

But somethings missing.

While your institutions marketing department has been supportive, you believe that the customers you want to serve are tired of glossy brochures, breathless press releases and chatty sales reps.  Your customer meetings are fun, but you cant tell if the positive feedback is the result of real insight or that second glass of wine. 

On the other hand, the prospect of publishing your findings in some scientific journal is too dreary to contemplate. 

You know some more meaningful is at stake.  You want to share your good news and get some feedback.

Heres your solution: the Care Continuum Alliance Annual Conference.  Hundreds of individuals just like you - individuals who give a damn about patients, are excited about making a difference and want to make a living doing it - will be available to give feedback.  Who knows, some of them may talk partnerships.  Others will resent your competition, confirming that you are on the right track.

The CCA Call for Proposals can be found here.  You have until March 6 to submit.

The Disease Management Care Blog finally caught up with it. 

Heres its take:

Its a well-written and traditionally crafted summary of CMS six demonstrations that had the participation of 34 programs:

Care Management for High Cost Beneficiaries
Medicare Coordinated Care
Disease Management for Dual Eligibles
Informatics for Diabetes Education and Telemedicine
Disease Management for Severely Chronically Ill Beneficiaries
Medicare Health Support

Why Demos?

Demos are used by CMS to test innovative care strategies before they are formally adopted as a covered benefit in the fee-for-service program. These demos were funded because CMS knows that half of all Medicare beneficiaries have five or more chronic conditions and that they account for 75% of its costs. In addition, up to 50% of beneficiaries are not receiving recommended care, such as vaccinations and cancer screening.

How Did the Demos Work?

The programs enrolled persons with a variety of chronic conditions such as diabetes and heart failure. Kick off dates ranged from 2000 to 2005. "Hierarchical condition categories" or high baseline expenditures were used to identify and target the persons at high risk. All used care coordination nurses who were typically - but not always - remote and disconnected from the physicians. There was little information on admission criteria to the programs, on the training or credentials of the care managers, the approaches used in to manage transitions across care settings or improving medication compliance.

What Was the Bottom Line?

On average, the programs were unable to achieve savings in excess of Medicares fees.

The programs reduced hospitalizations by an average of 7%. In order for Medicare to have saved money based on the disease management fees, the hospitalizations would have had to be reduced by 11%. Programs that involved greater in-person interactions between nurses and patients appeared to have greater success in reducing admissions rates.

The evaluation was also statistically stymied by relatively low numbers of patients in some of the programs. It is possible that there were savings, but if they exist, they were too small to be detected by widely accepted statistical methods.

So What DMCB Conclusions Can Be Drawn and Why?

There are two:

1.The "versions" of disease management used by Medicare from 2000-2005 relied on approaches used in commercial settings from 1995-2000. These deployed remotely stationed nurses calling patients with worrisome cost patterns. From 2000-2005, commercial insurers and employers knew that wasnt working and transitioned to more sophisticated engagement protocols as well as in-person care programs tailored for patients with high as well as modifiable risk.

In other words, the impact of later versions - like this, this and this - of disease management in fee-for-service Medicare remains largely unknown. Thats why the CBO report ends with the conclusion that....

"...the demonstration results indicate that additional experimentation, evaluation, and inement over a period of years will probably be needed to identify policies involving disease management and care coordination that can significantly reduce Medicare expenditures."

Of course, by the time CMS gets done with more years of "experiments," "evaluation" and "inement," those results will likewise be obsolete.

2. This begs the question: if Medicare cant achieve savings, why do practically all insurers and most self-insured employers still include disease management programs in their benefit designs?

The DMCB suggests that in addition to a growing body of peer-reviewed literature showing that more modern (and still untested by Medicare) disease management is "efficacious," non-governmental insurers have some additional advantages that increase real world effectiveness:

1.Using disease management as only one component in an overlapping suite of other mutually supportive programs, including consumer-based incentives to rely on primary care, value-based insurance designs, intelligently restricted networks and concurrent wellness and prevention programs.

2. Access to internal assessments of program success that will never be submitted for publication in the peer reviewed literature.

3. Flexible program adaptation to the myriad local cultural and community factors that determine success. After all, what works in a motorcycle factory in the Midwest may not work in a cubicle farm in Silicon Valley.

The DMCB Bottom Line:

While the CBO report is technically correct, it promotes the tired canard is that modern disease management consists of naive nurses making blind calls and exhorting baffled consumers to take better care of themselves. In addition, the idea that single standard can be implemented everywhere in a stand-alone fashion is a pipe dream. No wonder Medicares disease management demos have failed.

The Feds need to figure out how to implement disease management, not what doesnt work.

In a prior posting, the Disease Management Care Blog noted that nurse-to-patient ratios in outpatient care coordination programs run between 1:750 to 1:1500. Based on 2010 Bureau of Labor Statistics data, the average annual salary of a registered nurse (RN) (in hospitals) is $68,610.  Fringe benefits for RNs add 46% for a total of $100,208.

Combine that ratio with the total compensation information and the per member per month (PMPM) cost for a care coordination nurse ranges from $5.57 to $11.13.
 
Obviously, a single RN does not care coordination make.  There are other overhead expenses, such as administration, documentation and supervision.  Assuming human resources account for the bulk of a program’s cost with an additional load of 25%, the total PMPM cost ranges goes from about $7 to $14, while 50% increases it to $8.35 to $16.70.

By my calculation, that puts monthly care coordination costs close to the CMS Innovation Center’s Comprehensive Primary Care Initiative (CPCi) within the “ballpark” of $15 to $20 per Medicare beneficiary per month (see page 3 here).
 
Based on these data:

1) CMS is being reasonable in offering a $20 monthly fee for care coordination.  It falls within industry benchmarks and supports a competitive compensation package for a typical RN.

2)  While CMS’ fee meets benchmarks, this is obviously meant to support a medical practice hiring additional personnel to take on the work of care coordination.  As a result, the fee may offer some additional margin depending on additional overhead.  Hopefully, the providers who participate in the initiative won’t assume that the $20 fee represents pure profit.  Expecting RNs currently on staff to manage care coordination on top of existing duties means that the existing duties or care coordination (and the RNs) will suffer.

3) As the Disease Management Care Blog pointed out in a prior post, this may also represent an argument for the “central” hiring and administration and the “peripheral” distribution of the care coordination nurses.  If administrative costs can be pooled and coordinated by a cluster of primary care sites, that could lower costs significantly.

4) Last but not least, this gives Accountable Care Organizations (ACOs) an important insight on one cost that they’ll need to take on if they are serious about care coordination.

Apparently not.

Thats the Disease Management Care Blogs main take-away after reading the Care Continuum Alliances "Population Health Management in Physician Practice: A Call to Action."

The CCA commissioned a survey that asked 105 primary care physician leaders about the implementation of population health-based care coordination in their clinics. The clinics were from all regions of the U.S. and ranged in size from 5 to 95 physicians (a total of 1,916 physicians with a mean of 18).  To be included in the survey, they had to be planning or had already implemented patient-centered care initiatives, many of which were modeled after the medical home. 93% already had an electronic record and10% reported being part of an Accountable Care Organization (ACO).
 
First the good news.

Over and beyond hiring non-physician providers (96% had at least one nurse practitioner and 70% had a physician assistant), 91% reported that they had hired a "care coordinator."  Whats more,  85% said that population health was conceptually important in their practices and the majority 55% rated this as either a "4" or "5" on 1 to 5 scale.

But the bad news is that less than half were familiar enough with the concept to fully implement it in clinical practice.  The number one challenge in this area was the difficulty in making sure that roles and responsibilities of the care coordinators were appropriately defined. 

It should be noted that the practices surveyed in this report were not typical of primary care,  where experience with care coordination is even lower.  This was a elite group of innovators on the cutting edge of primary care who had committed precious resources and already were hiring care coordinators. Yet even these select clinics risk being operationally stymied by not knowing how to effectively implement it in their practice settings. 

The CCA report appropriately concludes with a call for education, tools and support to help physicians fully implement this in their clinics.  The DMCB wholeheartedly agrees.  Based on this report, hiring care coordinators is certainly necessary but isnt sufficient to attain high quality population health.

We still have our work cut out for us.