OP-ED

New Study Proves Reducing Healthcare Costs While Improving Care Is Achievable

The results are in: population-based care management doesn’t just improve patient satisfaction – it also can significantly reduce medical costs.

It is widely known that chronic disease accounts for 75% of the total cost of healthcare in the United States. In the late 1990s, the care management industry grew out of the need to combat this problem, by increasing medication compliance, reducing gaps in care, and helping individuals become more empowered to actively manage their own health.

Care management programs have long been shown to increase medication compliance and use of other preventative services, and individuals who participate in care management programs find them extremely valuable. Yet the care management industry has always faced challenges in verifiably demonstrating the effectiveness of its programs in  reducing medical costs. Several methodologies have been created to attempt to reverse-engineer a calculation of savings delivered by care management programs, but the gold standard of healthcare effectiveness measures, a randomized controlled trial, has rarely been done and none in a large population.

I’m pleased to say that this is no longer the case. A study from Health Dialog appearing in the New England Journal of Medicine today, uses a randomized controlled trial to definitively show the savings delivered by an enhanced care management program. The trial looked at 174,120 individuals over twelve months, measuring those individuals’ health outcomes and the total savings as a result of an enhanced care management program. The program included chronic condition management and patient decision support programs, and these services were delivered telephonically as well as online.

After twelve months, the average monthly medical and pharmacy costs per person in the trial group were shown to be $7.96 lower than the control group. A 10.1% reduction in annual hospital admissions accounted for the majority of the savings. With the cost of the programs at less than $2.00 per member per month, the net savings to the health plans who participated in the study came to $6.00 per member per month.

There were four unique factors in the success of this particular program.  The first was a coaching approach that focused on empowering individuals to participate in medical treatment decisions across a wide range of conditions – not just chronic – with their doctors. It is important to recognize that people are not diseases (or collections of diseases). Every person possesses a unique set of strengths and faces individual barriers to a healthier life.

The second factor was Shared Decision Making – decision support through multimedia decision aids combined with coaching. Third, the program achieved a high level of engagement by utilizing unique analytic models for risk-scoring individuals, customizing outreach, and predicting receptivity to coaching. Lastly, unwarranted variation analytics allowed us to incorporate local healthcare system factors and practice patterns into our outreach strategies.

As the U.S. healthcare system continues to strain under the weight of the costs associated with care, population-based care management will play an increasingly important role in helping to manage those costs.  This research proves that supporting patient involvement in the decision-making process through scalable interventions can be an effective component of a better healthcare system, now and in years to come.

David Wennberg, MD, is the Chief Science and Product Officer at Health Dialog, a care management company based in Boston, MA that serves over 20 million lives. David is also a member of the Primary Project Team of the Dartmouth Atlas Working Group at the Dartmouth Institute for Health Policy and Clinical Practice.

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beautriellis
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beautriellis

Great post John!
If two percent is not the thirty percent and the NEJM study is correct, how is the industry ever going to achieve enough savings to stop the run-away health care train?

John Morrow:The Ratings Guy
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@Maggie Mahar From your own 2007 article in Dartmouth Medicine, The State of the Nations Health “Can waste help fund reform? With its decades of data, Dartmouth has exposed the incredible waste in the U.S. health-care system. Sizing up the evidence, Wennberg estimates that up to one-third of the over $2 trillion that we now spend annually on health care is squandered on unnecessary hospitalizations; unneeded and often redundant tests; unproven treatments; over-priced, cutting-edge drugs; devices no better than the lessexpensive products they replaced; and end-of-life care that brings neither comfort nor cure. As Dartmouth’s 2006 paper, “The Care of… Read more »

Barry Carol
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Barry Carol

I think there are significant chunks of healthcare that have wide price variance among providers but narrow quality variance or none at all. This includes prescriptions drugs, including the brand vs. generic issue as well as which pharmacy charges the least, expensive imaging and many routine tests and procedures. The work that Nate and others like him do in trying to guide patients toward the most cost-effective sources of care makes an important contribution toward controlling healthcare costs. Indeed, this is probably the lowest hanging fruit in the sector. Price and quality transparency tools as well as tiered in network… Read more »

Margalit Gur-Arie
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Of course you can, Nate. But just like you are able to show me cost savings down to two decimal points, you will need to show me how many of those folks actually renewed their Rx and how many actually kept that preventive care appointment and how many went to the more cost effective hospital after you called them and how does this compare to a control group you didn’t contact. You do have the data. Just aggregate it and do the calculations. Otherwise it’s nothing more than anecdotal evidence. Ideally you will also show me that their health is… Read more »

Nate
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Nate

If I call someone and remind them to fill an Rx they didn’t can I say I improved care?
What if I call and get someone to schedule a routine exam they didn’t plan to?
What if my website shows them hospital X has better outcomes and lower cost then Y can I claim it then?

Barry Carol
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Barry Carol

Strategies like filling prescriptions at less expensive pharmacies or getting routine procedures done at less expensive hospitals that can do just as good a job as the AMC with the marquee name and huge fees can make a significant contribution toward improving the cost-effectiveness of care defined as outcomes per dollar spent. We should be encouraging as much of that as we can which is why I keep pushing for price and quality transparency tools and tiered in network insurance products.

Margalit Gur-Arie
Guest

Of course you can Nate, as long as you don’t write an article saying that you are “improving care”.

Nate
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Nate

i was curious what your responce to Joe’s peice would be. Lot of employer involvement there. There are things that MDs can do to help lower cost, and they should be taken advantage of. I don’t understand why you would limit yourself to just those opportunities and ignore all the others though. If I call a member and get them to fill their Rx at Wal Mart instead of CVS and we save 15% does that really require me measuring their health outcome to justify claiming care was not negativly impacted? Can I really not claim we saved 15% while… Read more »

Margalit Gur-Arie
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And I’m sure Victor Fuchs is correct. As far as I know the definition of a team is a bunch of people working together to achieve a certain goal.
Where was the team in this study? There were phone coaches and separately there were doctors or nurses or whatever at the patient’s regular clinic.
There is no indication that these two separate agencies coordinated anything. Is this the optimal model?
Jo Flower has a new article here describing how Boeing did it. That model sounds really good and somehow they managed to collect health metrics and save 20%. Maybe they are…. liberals too.

Barry Carol
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Barry Carol

The esteemed health economist, Victor Fuchs, tells us that the best way to manage diabetes is with a team, most of whom are not physicians. Lots of routine primary care and chronic disease management doesn’t require day to day physician involvement. There is an important role to be played by NP’s, PA’s, nurses and pharmacists and we shouldn’t be afraid to utilize their expertise when and where it’s appropriate.

Nate
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Nate

“I don’t happen to believe that phone coaching which is totally separated from a patient’s clinical team can be very effective.” And you base this on years of experience with phone coaching? Did you even read what he wrote? Compare what he said to what you wrote; “by increasing medication compliance,” Why does someone need to schedule and consume the time of a medically trained provider to be reminded to take their medicine? Not to mention the delay in catching the problem and relying on the person being honest with their doctor. Now lets look at the terrible, ineffective, won’t… Read more »

Margalit Gur-Arie
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Nate, here is my problem in a nutshell: The title of this article is misleading. Yes, there was measured reduction in cost. No, there was no measured improvement in quality of care. The key word here is “measured”. I don’t happen to believe that phone coaching which is totally separated from a patient’s clinical team can be very effective. If you feel otherwise, I would very much want to be proven wrong. All we need is a study that actually Measures the outcomes of such intervention in terms of quality not just dollars spent by employers. Granted, it is harder… Read more »

Nate
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Nate

“The question is how to reduce costs while improving quality,” Not all quality needs improved, we could afford to lesson quality in some places if we could improve it in others. For example in Cleveland the Clinic runs adds saying every life deserves world class care, true for rare conditions, overkill for a cold. This area 99213 bills out around $80-$100 and they net $40-$50. Clev. Clinic bills $180 and nets $120-$150. For a flu, sprain, or all the other routine care do we really need that level of quality? Assuming their quality is even better to start with and… Read more »

Marilyn Nichols
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I don’t know if reducing medical costs is really that effective. I would understand why most readers would disagree. What matters in the end is the quality of care patients get out of what they’re paying for.

Margalit Gur-Arie
Guest

Maggie, I am certain that you are correct about coaches being valuable resources in a medical setting like the ones you mention. They would probably be very valuable in any clinical setting where their work is done in conjunction with the clinical team and basically supplements medical care provided by physicians. However, after reading the NEJM article, including the Appendix, very carefully, it seems to me that the coaches described in this study, although trained and probably very qualified individuals, are not part of a clinical setting. There is no mention anywhere that the coaching was somehow coordinated with the… Read more »