Health for life

If youre one of those disease management skeptics, you might enjoy the lingering anti-vendor schadenfreude of this bottom-up re-analysis of the MHS program that was just published in the New England Journal.  However, if you are a fan of the Feds programs for the Patient Centered Medical Home or Accountable Care Organizations, youll also want to pay close attention to a timely reminder about the perils of contracting with CMS.

The Disease Management Care Blog explains.

Recall MHS was a CMS program designed to test old fashioned disease management in fee-for-service Medicare.  A total of eight vendors launched their programs in separate geographic areas across the U.S. in the latter half of 2005.  Each area had about 30,000 beneficiaries with diabetes and heart failure who were randomized to disease management or usual care in a 2:1 ratio.  Participants were ill with an average of more than one recent hospitalization in the previous 12 months and more than $15,000 in baseline costs.  The programs consisted of remote call centers staffed by nurse-coaches who counselled patients on a regular basis.  Each of the vendors negotiated a monthly "at risk" administrative fee from CMS.  To retain the fee, the companies had to reduce costs in excess of the fee and simultaneously achieve a variety of quality and satisfaction targets vs. the usual care patients.  If they failed to save enough money, CMS clawed the money back.

The Journals reanalysis, involving more than 240,000 beneficiary-participants, didnt shed any new light on the original depressing report to Congress.  Among the eight vendors, the change in the per beneficiary per month (PBPM) cost ranged from $22 in savings to $38 in additional costs; most of the PBPM changes were in the single digits.  In contrast, the fees ranged between $74 to $159 per beneficiary per month.  Only three of the eight vendors had lower costs, none achieved statistical significance and none had savings that exceeded their fees. There were some improvements in quality, but they were spotty and quite modest.

Participation rates among eligible beneficiaries averaged 85%.  Mean telephone contacts per patient was .7 per month and ranged from .4 to 1 per month.  Patients were telephoned on average every 2.7 months; over a 30 month period, 59% were contacted at least 10 times and 23% were contacted fewer than 5 times. 

And what are the lessons?

The authors had five, all of which also apply to the medical home and ACOs.  The DMCB has two more.

1) Show me the money:  In retrospect, the research that led to MHS that suggested that disease management "worked" was imperfect.  By the way, the same can be said of the largely observational and underpowered research supporting medical homes and the total lack of any meaningful experience with ACOs.  Will these innovative care approaches share the same fate as MHS?  Based on what we know at this time, it cant be ruled out.

2) Needy patients:  Medicare beneficiaries with diabetes and heart failure are sick. The nurse-coaches were unprepared to meet all of their patients needs.  Medical homes and ACOs may end up being surprised also.

3) Analytics:  In the CMS "data dumps" to the vendors, it was difficult to find the patients who were the most vulnerable.  This good news is that modern predictive modeling analytics - despite its limitations - may enable medical homes and ACOs to target their care management at those patients with the greatest need and at the highest risk for increased costs.

4) Timely access to data: CMS data transfers to the vendors could be tardy, resulting in telephonic outreach to patients long after it could have done any good.  ACOs will need to worry about this in their dealings with CMS. 

5) The doctors: despite the vendors assurances, the disease management programs were not aligned with the beneficiaries doctors.  This is less likely to be a problem in medical homes and ACOs, but doesnt mean that they wont have to worry that their docs arent fully buying into the notion of teaming with non-physicians.

The DMCB offers two other lessons:

In retrospect, calling sick Medicare patients infrequently may have been one factor in MHS undoing.  The telephone will probably have a role to play for medical homes and ACOs, but the best mix of telephonic and face-to-face visits remains an open question.  At any rate, it seems that contacting patients at least every 30 days would be a good benchmark.

The DMCB remembers the confident "this is guaranteed to work!" hubris of yesterdays MHS architects and finds it eerily similar to the enthusiasm surrounding todays medical homes and ACOs. If the Medicare medical home and ACO programs dont work out, itll set these innovations back ten years or more.

Image from Wikipedia

Enshrining a term only an actuary could love, the Affordable Care Act sets health insurance coverage on the basis of "actuarial value" (AV).  A good summary can be found in this Consumers Union Health Policy Brief.  As the Disease Management Care Blog understands it, AV is the percent of typical medical expenses that a health insurance policy will cover for a typical population.  In other words, some individuals will have no out of pocket expenses (deductibles, coinsurance and limits) while other individuals will have end up paying for most of their services.  When those expenses are rolled up over thousands of persons and compared to total health care costs, the percent left over is the "AV."

Once the Disease Management Care Blog wrapped its head around the AV, it next tackled the ACA concept of the "essential health benefit" (EHB).  This is the minimum package of covered services (outpatient, emergency room, maternity, hospitalization, medications, rehabilitation and the like) that a health insurer must include in its coverage plan.  This will ultimately be defined in yet-to-be-determined federal regulations. 

Now that we have the jargon nailed down, plans that fail to meet at least 60% of AV on the EHB will be excluded from the exchanges and ineligible for federal subsidies.  60% is "bronze" coverage, while 70%, 80% and 90% are "silver," "gold" and "platinum," respectively.  This is important because not only did most members of Congress not understand AV (consumer costs) or EHB (coverage), but because both will determine the future cost of our nations health care bill. 

Enter the Institute of Medicine (IOM), which has just released a report on how the Feds should best determine the EHB.  A handy summary can be found here.

Bottom line? 

The IOM has backed into the EHB, not basing it on notions of optimum health coverage but on affordability.  It recommends that the basic affordable EHB be based on a survey of what is typically covered by an insurance plan that is purchased by a small business employer.  With that as the baseline, the EHB be further modified (based on scientific evidence and public input) so that the premium ultimately matches 70% of the small business AV.  According to John Iglehart writing in the New England Journal of Medicine, that could work out to be about $5000 per year for individuals and about $13,500 for families.

This is significant because the key underlying assumption of the ACA was that forcing everyone in the risk pool (with the Constitutionally suspect "play or pay" provision) with insurance rich in wellness, prevention and services like rehab, mental health and pediatric oral care would, by itself, drive down health costs.

The smart folks over at the Institute of Medicine respectfully disagree.  They believe the best approach is to figure out what is affordable first and then define the insurance coverage second.

Its finally happened.  While its not explicitly stated, the Federal deficit has noisily bumped into the Affordable Care Act. The IOM has given the ACAs supporters cover over the inconvenient intrusion of costs into coverage, affordability into access and reality into fantasy.  Even if the IOM recommendations fall on deaf ears, DMCB readers can expect the the Federal budgets problems to now and forever be part and parcel of the ACA.

What to do?  When the Disease Management Care Blog is flummoxed, it likes to break into song.  One song that comes to mind is Taxman......