So the Medicare CCIP (chronic care improvement program) demonstration projects have been awarded and announced. And the winners are health plans and DSM companies. The plans are Aetna, Cigna, Humana, & United. The DSM companies are the more or less usual suspects of American Healthways, Lifemasters, Mckesson Health Solutions, Health Dialog (supported by a cast of thousands including Health Hero) and the slightly less well-known (i.e. I’d never heard of them!) XLHealth–which I guess specializes in obesity management.

What’s actually going to happen will be pretty darned interesting:

Phase I CCIP programs will serve 150,000 to 300,000 Medicare beneficiaries who are enrolled in traditional fee-for-service Medicare and who have multiple chronic conditions…. Beneficiary participation is completely voluntary and at no charge to beneficiaries and will not affect their ability to choose their own doctors and other health care providers…… Using historical claims data, CMS will identify beneficiaries by geographic area and screen them for CCIP eligibility. Targeted beneficiaries will be assigned randomly to either an intervention group or a control group.

Enrollment is voluntary and the organizations running the project will have to do the marketing/enrollment. What will they do after that?

Each of the local CCIPs will offer self-care guidance and support to chronically ill Medicare beneficiaries to help them manage their health, adhere to their physicians’ plans of care, and ensure that they seek and obtain the medical care and Medicare-covered benefits that they need. The programs will include collaboration with participants’ health care providers to enhance communication of relevant clinical information. The programs are intended to help increase adherence to evidence-based care, reduce unnecessary hospital stays and emergency room visits, and help participants avoid costly and debilitating complications.

The economics is that the sponsoring CCIP organization has to show at least a 5% reduction in the cost of these chronically ill seniors compared to the control groups, and then they get to keep the difference if they make bigger savings. This should be doable in that apparently in their commercial populations the DSM companies have been saving close to 15% compared to comparable cohorts. The question of course is, can the models that have shown success with a commercial population be translated to an older and potentially sicker one? And can it be done in places where there’s limited experience in care management?

Apparently the CCIP contracts couldn’t go to states which had big demonstration projects already, which included California and Texas, which is one reason that they ended up in states which, to put it one way, are not particularly known for innovation in population care management. (I hope I didn’t offend too many of my fans in Mississippi or Tennessee with that statement).

However, it’s worth thinking for second about who isn’t on that winners list. Remember the comment over on the DM Forum a while back about the DM executive explaining it at a cocktail party and being asked "isn’t that what doctors do?" Well there ain’t no providers on the list, and apparently not too many tried to get on it. At least one commentator, Robert Berenson from the Urban Institute, has pointed out that the way the law was written made it close to impossible for providers to take part. He doesn’t exactly pussy-foot around:

Consistent with the overall philosophy of the MMA, the law’s approach to addressing the growing need for improved care for those with chronic health conditions is a corporate one, focused on providing contracts to third party vendors, rather than enabling professionals to better serve their patients. Medicare has an important opportunity to lead the restructuring of how physicians organize and deliver health services, as called for by the Institute of Medicine in their seminal Quality Chasm report Instead, the MME would have Medicare merely follow private sector approaches that may not be well suited to the Medicare population.

Now there are some other approaches that Medicare has taken in smaller demonstration projects that have been more physician and provider-friendly, but they haven’t always had success. In fact one demonstration project in Washington state failed over physician lack of involvement earlier this year. And realistically, the current market attitude of hospitals which are focused on–and make their money from–acute care interventions, and the disaggregated nature of the physician population, overall makes provider organizations poor candidates for developing these CCIPs. However, that’s not the case for all providers. There are plenty of medical groups and forward-thinking hospitals that could have put such a plan together–after all it was big medical groups like Kaiser Permanente and the old Friendly Hills and Mullikin groups in S. Cal which started effectively innovating in the care of seniors back in the 1990s.

While CMS hasn’t said which bids didn’t get selected, either they didn’t pick a provider group or the whole thing was framed in a way that no provider group applied. Given that the intention of this demonstration project is to help reform Medicare, you’d think that one or two of the contracts could have been given to provider organizations to see if there’s any hope of innovation there. After all they’re the organizations that are going to have to change if we’re going to rescue Medicare in the long run. And one provider group, run by government bureaucrats no less, has quite an impressive record in DSM–so it’s a bit early to not even allow another one to give it a go.

Of course there is a somewhat more cynical view to take of this announcement. This Administration has shown complete faith in the market, even to the extent of subsidizing private plans to take over market share from the more efficient government Medicare plan–at an incremental cost to the tax payer. If you extrapolate out from current trends, Medicare will be costing in the order of 157% of GDP by 2020 (OK, not quite that much, but a very big number). To get Medicare costs under control, the only real long-term option is to pay the providers less. Meanwhile the consumers will want the same amount of services (or probably more). The conspiracy theorists amongst us might suspect that the way an Administration infused with market ideology will cut the spending on and benefits delivered by such a popular government program is to have private sector actors do the work for them. And if most of the new Medicare population is forced into private Medicare Advantage plans to get the best deal on the new drug benefit, and many of the most expensive patients are in CCIPs also run by private plans and their sub-contractors, it’s quite possible that the government can use them to beat up on the providers the same way that the employers used the HMOs to do it in the commercial sector 10 years ago.

Somewhat beating a dead horse, five years and one day after To Err is Human, UCSF patient safety expert (and by definition rebel physician) Robert Wachter has a paper in Health Affairs in which he (using a survey of 400 hospitalists) grades the US health care system’s efforts on the patient safety issue. The press release notes that he "gives the U.S. health system an overall grade of C+ on patient safety, noting some improvement but considerable deficiencies in key categories." Especially as the only category that patient safety gets an A grade (albeit it an A minus) is in the regulatory sphere. I don’t think that THCB’s commentator of earlier this week Michael Millenson would be so generous with his grading. As he said in his piece in THCB on Monday, "As the horror stories fade, Congress can barely summon the energy to mandate voluntary error reporting." Wachter is impressed only by JCAHOs regs on checking orders and the impact of the emerging role of hospitalists.

Here’s the full paper, and it doesn’t really make for encouraging reading.

Michael Millenson week continues here at THCB!

Despite giving my team at IFTF almost no credit for inventing the phrase (oh, I can be as petty as any academic!) Michael has written a pretty good article called Pay for Performance: The best worst choice. Millenson notes that some adherents of antecedents of P4P existed long ago in the medical system before the AMA had them taken out, put up against the wall and shot (or the professional equivalent). Given that Millenson quotes the AMA Chair as saying that P4P is a "scam designed by multi-millionaire Health Plan CEOs to take advantage of gullible physicians", it seems that some things have changed little. And why would you want your performance be reflected in your pay, especially as your performance is apparently as bad (or at least as inconsistent) as much of the care delivered in this country, even by the most prestigious institutions. (See 30 years worth of Wennberg et al if you don’t believe me). For that matter, given the ability of the plans and the rest of the suppliers to game the system in the past, I would be worried as a doctor is I was going to essentially give a with-hold away that I might not see back. But for the rest of us, as Millenson says, given the choice that we have now, P4P is the best one out there.

BTW the article is published in a somewhat obscure British journal called Quality and Safety in Health Care. It’s subscription only, but you dear reader can get to this article by special arrangement only from this page. Ooh, the power of THCB!

Nov 29, 1999 saw the release of possibly the most famous report in health care since the Flexner report excoriated the medical school system in the early 1900s. The report was called To Err is Human and it was created by an expert panel working under the auspices of the non-partisan Institute of Medicine. Based largely on the work done some 10 years earlier by the Harvard group looking at malpractice, To Err is Human made the leap into the public consciousness despite being an obscure report about the medical system, rather than a sexy report about new medical discoveries. Here is the IOM’s original press release.

At least two major news events in previous years had helped in the build-up–the death by wrong chemotherapy dose of the Boston Globe’s health columnist, Betsy Lehman, in the most prestigious cancer center in the most medically prestigious city in America, and the amputation of the wrong limb from a patient in a hospital in Florida. While this type of thing had been going on forever, patient safety suddenly became a screaming big deal, and it remains so today. However, it remains a big deal in the sense that medical errors are still routinely going on — in fact THCB reported just a few months back of an identical death by wrong dose of chemotherapy to that which killed Betsy Lehman. And just last week a Seattle medical center publicly apologized for a mix-up in which a patient died as a result of being injected with a toxin rather than a harmless dye.

The patient safety movement is also hamstrung by an unwillingness of both Congress and medical leaders to get really serious about the problem. Earlier this month in a survey by Bob Blendon at Harvard, in conjunction with Carolyn Clancy at AHRQ and the Kaiser Family Foundation, the public showed that they do not trust the medical system’s safety. Here’s the survey and the three authors also acknowledged the fact in the NEJM.

Throughout this entire time, or at least since the publication of his wonderful book Demanding Medical Excellence, Michael Millenson has been the leading lay critic of the medical establishment on its poor response to the patient safety issue, even following the IOM report. I asked Michael for his reaction on the five year anniversary. Here are his thoughts:

It’s official: the sage leaders of the health care industry have gathered for the five-year anniversary of the IOM To Err is Human report and concluded that not enough has been done to actually reduce the patient death toll since the report appeared.

It is, unfortunately, not a surprise that the equivalent of three jumbo jets crashing every two days continues to occur — although, in fairness, enough progress has been made that we may assume that the load factor on those jets has dropped somewhat. The death toll taken by tired residents gained national attention with the death of Libby Zion in the mid-1980s. Two decades later, strong rules limiting resident work hours have finally taken effect nationally. Wrong site surgery was the subject of sustained national headlines in 1995. JCAHO rules mandating the tremendously complicated solution — use a pen to mark the site — went into effect in 2004.

The fact is that 747s are not crashing in hospital parking lots; the preventable death toll remains largely invisible. Hard working, well-meaning physicians and nurses are all trying hard to do their best for patients, and their failures generally occur among people who were very sick to begin with. As the horror stories fade, Congress can barely summon the energy to mandate voluntary error reporting.

In two years we’ll have the five-year anniversary of the IOM’s Crossing the Quality Chasm. One can safely, as it were, predict that we will then be talking about the sad lack of progress in making evidence-based medicine an integral part of routine care.

One other thought. Health policy wonks had known about this for years. Why was this report become such a big deal in the first place? Millenson explains:

The IOM was lucky. The release came in a slow news time (post-Thanksgiving), when there was nothing new on various Clinton scandals and Boris Yeltsin, as I recall, was on the death watch but hadn’t died of alcohol poisoning or whatever. So: slow news day, catchy topic with soundbites, and real human interest examples (courtesy of newspaper stories) that allowed the TV folks to put real people on film — and you’ve got a big deal story. As opposed to the generalizations of most "reports," including Chasm.

Now, not pure luck. They were trying to make a splash. But timing was lucky. And they weren’t smart enough to realize the true elements in their success, ’cause they thought Chasm would be even bigger play because the topic was bigger. Sure, and putting out a report on problems with America’s plumbing systems will be a sure-fire media success, too.

Of course most people don’t know where the quote in the title of the IOM report comes from, but then again most people weren’t tortured through English literature class at their English boarding school the way I was. And the full phrase that Alexander Pope wrote?

Good nature and good sense must ever join;
To err is human, to forgive divine.

I think it’s fair to say that although we do have the "good sense" needed to make medicine safer, we don’t have the "good nature" required to put that sense into operation. So we don’t yet deserve any divine forgiveness.

Today we’re going to tour the ballpark and have a go in the batting cage. But first…

Shorter Bob Pearl, CEO Permanente Medical Group: Our docs are convinced we care about outcomes. Other people’s docs (other IPA and med groups) have doubts.

Chronic care management is an IT intensive, patient outreach intensive, 24/7/365 process that’s really tough, but need a whole system. We have to track and predict bad incidents. One example is tracking bi-polar people every day in order to predict a manic incident. But the system needs to track all patients –those with chronic illness and those at risk of getting one (which is everyone else!). The system needs to track everyone all the time and find the failures, and report them out for both intervention and later analysis.

Right now 500K in the KP system are being watched by a care manager, but that 500K is not a static population — and they are trying to get them out of that system back to baseline. Everyone everywhere needs constant prompts and that’s where KP’s heading. (Implication is that every one else needs to get on board or they won’t be around…)

Next session is on P4P in California, where 6 health plans are busy running a P4P program via the Integrated Healthcare Association. (Presentations are linked)

At the moment (Lance Lang, HealthNet) it’s only 0.5% of the dollars for those participating groups, but there’s a lot going on in terms of work being done for that 0.5% and it’s heading to 1% next year and maybe up to 20% (?) by 2009. He thinks that they need to ensure that groups that are not deserving of a bonus get the message that they are not going to be around in the longer term unless they change.

Greater Newport Physicians IPA med director Doug Allen had three main points. Even though his IPA was at 90% in all the metrics, the amount they got from different health plans in bonuses varied 6-fold. So what are they supposed to do?

With the P4P dollars they have created and improved their data warehousing, but there’s nowhere near enough for an EMR. There’s no new money for investment here–the P4P is a variation of a whithhold. Plus some plans are starting to play politics by witholding some of the amount as a bargaining chip for other negotiations.

Finally, he’s (rightfully) concerned that the whole HMO-IPA model is under threat. Even if they can prove they’re better quality, employers are going to other types of health plan (e.g. high deductible PPOs). So this may all go down the tubes anyway? Or at least come under a lot of pressure if they can’t figure out a model to take P4P to the PPO or high deductible world.

In the Medicaid plan world in California, the San Francisco Health Plan did improve its health scores, even though there are no groups and no IT at the physician level. (Michael van Duren, SF health plan) They used direct member intervention (bribes) and direct physician intervention (more and bigger bribes. But it also required visiting the bigger providers (on the 80-20 rule to get at the most patients) face-to-face to get them to do immunizations, etc. To do the visits they are imitating drug reps’ sales tactics. They serve food, and they show the data very quietly, and then start working on improvement by showing them into the live data on the warehouse (online) — then they go down to individual patient data (claims of course). So the incentives get you in the door, but it’s showing the doctors the transparent data as a tool to make them change — and of course most of it is fixing the coding which was done wrong in the first place! Now the plan is doing direct bribes to the physicians’ staff. The provider relations people are entitled to authorize anything that works up to a few thousand dollars,to get them to get their data better (including hiring a low level analyst, but also getting their Internet connection up, etc, etc.)

Of course, as W might say, this is really hard work.

Jeff Flick from CMS thinks that we’re heading from 33% of Californian seniors in Medicare Advantage to 50-60%. (Havent we seen this movie before–the private plans didn’t like the endsing and ran out before the end last time.) He wants to drive it there because he thinks that provate Medicare plans are easier to get to provide better quality care. Also worried about the impact of PPOs. HSAs and other higher deductible plans on shredding the community rating aspecy (as Alain Enthoven said to me in a quick corridor conversation).

In addition the CMS Docket program (seems not to have a Googleable web presence which may be why it’s not so popular!) Doqit program (thanks for the correction, Catherine) helps poorer and smaller practices get into information age, although it has not had much of an uptake so far. He does think that there’ll be a tipping point when doctors get the tech. He also thinks that the chronic care demonstration projects are part of Pay for Performance as they do mandate improved quality, satisfaction and guarantee savings. He said it: "We think that we are going to be able to figure out what works for disease management in Medicare" and it can then go into the main program with no further legislation needed. But in addition to focusing on chronic care, they are focusing on end of life issues which are very expensive and these people are getting no help from intensive case managmenet, or consumer support programs for those people. CMS is going to do a national demonstration for intensive case management. These are all forms of P4P that he thinks have a bright future in Medicare.

Finally CMS is also trying to figure out how to make claims data be useful for measuring quality and performance. As you can’t pay for perfomance if you can’t measure it, but they are working on this. (Ed’s Note. Going down this road will, you might suspect, be tricky given the reputation claims have for accuracy). But they also have to work out the payment issue on the FFS side. From 2006 there’ll be reductions in fees for the next four years. He thinks this needs to be fixed, but how will this be fixed legislatively? His personal hunch (not CMS dogma) that the solution is to increase fees for those physicians with quality information (and the IT to support it) and not for the rest.

In response to me asking him if we hadn’t seen this movie before (Plans launch into Medicare Advantage; rates go down plans so plans quit Medicare)  Jeff says that the Rx benefit, risk adjustment and quality indicators will drive people into Medicare Aadvantage — but of course politics may change this (i.e. the way the BBA reduced payment rates) and he can’t say that it won’t.

Like a bunch of kids sneaking downstairs to open their Christmas presents before the day comes, journalists and pundits across health care are "celebrating" the 5 year anniversary of To Err is Human, weeks before the actual day.

Don’t worry. As a bastion of blogging integrity, you can make a fair bet that THCB will lead with the story, on the actual day…

But for those of you who can’t wait there’s an article in the Pittsburgh Post Gazette here, and a survey from KFF, AHQR, and Harvard (same team as the recent NEJM article).

The conclusion is the same: we haven’t seen a whole lot of progress as yet on medical error reduction.

My piece yesterday on the apparent inability of DSM to prove its value got some very pointed feedback. Gordon Norman, the V.P of Disease Management at PacifiCare, wrote this response. He suggests that there are real world answers to the question of "does DSM save money?", and that the whole health care industry needs to become more sophisticated, focus more on where DSM can make cost-effective change, and be realistic about where DSM can and cannot make a difference. It’s an excellent piece:

In response to your musings this morning on DM outcomes and "what’s really going on", I offer this counterpoint on the four recent media pieces about Disease Management that may be viewed by some, including yourself, as casting doubt on the ability of DM to generate cost savings.

Full disclosure: I am a family physician, with a decade of experience working in managed care, responsible for the DM programs that my company has deployed for our 2M commercial and 1.5M senior HMO members since 2000, which in aggregate are generating net savings of $120M measured by robust methods and validated by external third parties. Based on these results and our enthusiasm that DM is one of the few effective, feasible, and politically acceptable means available to the health care non-system to deal with escalating costs in the near term, I am now dedicated to implementing and improving these DM outcomes for both managed care and non-managed care consumers (i.e., Medicare FFS beneficiaries).

1. CBO Report on DM

On October 13, the Congressional Budget Office released a report requested by Senator Don Nickles during the MMA legislative process that appears critical of DM’s cost savings potential for Medicare. This report represents no new knowledge about DM — CBO simply reviewed the available peer-reviewed literature and concluded that the evidence supporting financial savings from DM was inconclusive, not that there was good evidence demonstrating that DM does not or cannot generate positive ROI. This is not surprising, given that very little DM has been conducted as randomized trials, intended for publication in peer-reviewed medical journals. Health care delivery research is much harder to conduct in the classic "double-blind, randomized control trial" design as are medical studies with investigational drugs, and the majority of DM today is motivated by business vs. research drivers. Consequently the published DM work represents only a small fraction of the accumulated DM experience, and much of what has been reported is obsolete by current DM standards. In contrast, a variety of robust, quasi-experimental designs reported at DM meetings and the non-peer reviewed literature have repeatedly demonstrated significant ROI for good DM programs. Also, even if DM is shown to reduce short term expense but turns out to increase longevity for some with chronic illnesses, it may very well increase long term expense for Medicare relative to no DM — while increasing lifespan may be worthwhile in itself, from a Medicare Trust Fund solvency point of view, it will be a concern for those who must figure out how to fund that longevity.

In contrast to the CBO conclusion (or rather "inconclusion"), many prudent purchasers of health benefits, and the plans who supply these services, are convinced by the preponderance of evidence that short term economic benefits exist for DM, even if uncertain about the best method for calculating. The current $800M – $1B of annual spend on DM services carries a substantial amount of credibility about perceived savings in the marketplace. Understandably, CBO and policymakers may require a standard of proof that is "beyond a reasonable doubt" as opposed to a "preponderance of evidence" standard — that will require multiple, large scale, randomized controlled trials; fortunately, CMS’s ongoing BIPA and CCIP demos will provide just that. Here’s a link to the transcript of the DMAA’s rebuttal to the CBO.

2. CHF DM results in Annals Int Med

The October 19 issue of Annals of Internal Medicine published an article from Stanford/Kaiser about CHF DM. Dr. Robert DeBusk working with Kaiser centers in No Ca performed telephonic DM for wide range of CHF patients in RCT (Tx N=228), and found no statistically different outcomes for rehospitalization, ER visits, or death. (DeBusk developed MULTIFIT program, which was licensed by both CorSolutions and Kaiser for their CV DM programs.) They claim this is largest randomized study to date to evaluate specialized care mgt for patients discharged after hosp. for CHF. Notably, only 49% of these patients were of the same severity as those we enroll in our CHF DM (NYHA Class III or IV) at baseline, as indicated in the title of the article, "Care Management for Low-Risk Patients w/ Heart Failure". This is obviously one speculative reason why no difference in outcomes was achieved, but also perhaps also because Kaiser providers and patients are already "more EBM compliant" at baseline than non-Kaiser physicians, leaving little headroom for DM improvement. Also, the telephonic CHF DM approach used here may not be suitable for optimizing savings in low or high risk populations.

3. UT study on CHF DM at AHA Annual Meeting, Circulation

A report from the annual AHA meeting describes a large academic research project, "Long-term Impact of Disease Management in a Large, Diverse Heart Failure Population", at University of Texas, San Antonio which will appear in Dec 7 issue of Circulation. Over 1,000 elderly patients were assigned to telephonic case management by CorSolutions. Despite some minor longevity gains, there apparently were no utilization or cost differences in the treatment and control groups. From review of the article, I believe this study targeted too broad a cohort to optimize savings, and used suboptimal (telephonic only) interventions.

4. Kaiser DM in Health Affairs

This week Kaiser researchers published a longitudinal assessment of quality, utilization, and costs for adults w/ four major chronic conditions for the period 1996-2002. By their own report, Kaiser’s form of "DM" is an amalgam of many activities such as clinical guidelines, patient education, disease registries, proactive outreach, reminder messages, multidisciplinary teams, and performance profiling for providers, most of which are embedded in the usual delivery of primary care within the Kaiser system; in some cases, care managers are also utilized for DM. No defined "pre/post" periods can be defined for most of these efforts, as they were adopted incrementally. The authors concluded that quality measures showed improvements, but no reductions in real costs were demonstrated over this time frame for any diseased cohort. However, it appears that similar cohorts of patients without these conditions experienced signficantly greater cost increases over this period, suggesting relative trend mitigation.

Associated editorials by Kaiser clinical executives suggest that the authors set an impossible hurdle in trying to demonstrate absolute cost reductions year over year, even though the relative cost savings of these programs was over $200 million. They point out the challenges of determining DM impacts caused by (1) varying definitions of cost savings; (2) identification and characterization of baseline experience; and (3) issues about allocation and timing of costs and savings. We would agree that looking simply at total cost over time invites many confounders that may obscure true DM impacts — changes in unit costs, changes in networks, changes in covered benefits, changes in EBM/technology, severity changes in populations, etc. That is why we support DM savings methodologies that target the most important drivers of chronic disease cost and adjust for anticipated confounders (e.g., unit cost adjusted, CHF disease-related costs for identically-defined pre/post CHF cohorts), and then compare these financial outcomes with non-financial event outcomes (e.g., hospital & ER admissions) to test the plausibility and credibility of the economic results — an approach that has achieved recognition by the Disease Management Purchasing Consortium in their awarding PacifiCare certification of our outcomes methods for DM programs.

Takeaways from these 4 articles:

• DM is getting more public exposure — while it may be glib to suggest "there’s no such thing as bad publicity" for DM — as for celebrities — greater public scrutiny of DM to separate the hype from the reality, and the performers from the wannabe’s, is overdue and welcome.
• All DM is not alike — it is predictable that telephonic DM interventions may not have the same impact as remote monitoring interventions, or that targeting high risk populations will save more money than targeting all risk groups indiscrimately. Caution is urged in generalizing the conclusions from any one "DM study" to other DM settings or interventions. DM is not automatically good — there is good DM and not so good DM, and the differences require some digging beneath the surface.
• DM won’t save short term costs for people who weren’t going to have any — low severity CHF patients aren’t sufficiently at risk for utilization for even good DM to be effective, much less pure telephonic.
• Academics have a different standard of proof than business for DM outcomes — as evidenced by DM revenue growth CAGR of 20-30%, business appears to have sufficient proof of DM value today with their "preponderance of evidence" standard, while peer-reviewed reports of well-designed RCTs are still accumulating for policymakers, who maintain a "beyond a reasonable doubt" threshold.
• DM outcomes methods are in evolution, and therefore reported DM outcomes are not easily compared — DMAA is leading an industry-wide movement for increasing standardization and rigor in these methods and reported results. Their white paper was released at the annual DMAA meeting 2 weeks ago, and will serve as a template for improved methodological approaches in the future. (Not available on line but email Matthew if you want a copy)
• We must get beyond "Does DM work?" to "Which DM models work best for which patients on which measures?" — (after all, does "health care" work? It depends on who/what you measure.) Determining whether provider-based chronic care models, one-stop call center DMOs, or specialty DM vendor results are superior from identically defined metrics for equivalently defined populations is where we should headed. "Negative results" from studies utilizing any one DM approach tell us nothing about DM in general, only about one implementation of DM.
• Don’t expect DM to eliminate trend — absolute health care costs are going to rise for many reasons beyond the avoidable "wasted" dollars spent for chronic disease populations; DM should not be discredited for not mitigating all the trend drivers. We musn’t let Perfect be the enemy of Good — for DM to impact a large percentage of the avoidable costs for chronic disease patients while improving their quality of life, clinical and functional status, and in some cases, even their longevity, is a Very Good performance indeed.
• Who has a better idea? — while it may not yet have been incontrovertably demonstrated that good DM consistently produces favorable short-term economic outcomes, there is a body of evidence supporting that hyporthesis, and a larger body of work supporting many non-economic benefits from DM. So what other ideas are on the policy table that will work better, faster, or cheaper to address the growing mismatch of a health care system designed for high-tech, specialty acute care with an aging constituency with escalating chronic care needs? Universal coverage? Consumer-directed healthcare? Widespread EMR w/ point-of-care decision support? All of these are politically elusive, undeniably expensive, unfeasible for short term implementation, and unproven with regard to net health care cost savings.

The Wall Street Journal (from which this is stolen in its entirety as most of you can’t get to it) basically advocates Pfizer’s claim that their DSM process in Florida works and saves money; $41.9 Million to be exact:

Pfizer Inc.’s health-management program in Florida cut the state’s medical costs by $41.9 million in the 27 months ended in September 2003, Pfizer said Tuesday. Pfizer, the world’s largest drug maker, in 2001 launched the joint initiative, which provides patient education and nursing care to patients with chronic diseases such as diabetes who are covered by Medicaid, the federal and state health-insurance program for the poor.The goal was for Pfizer to save Florida $37.5 million for the life of the program’s four-year contract, which ends in September next year, Pfizer spokesman Jack Cox said.

During the 27-month period, Pfizer also has given the state about $19.2 million worth of other investments and its medicines, Pfizer said. The results of the program so far validate "the original approach we took with respect to the state’s budget problems," Henry McKinnell, chairman and chief executive at Pfizer, said in an interview with The Wall Street Journal.

He said Pfizer is in discussions with other states about applying the same approach. But Florida has been alone so far in pursuing the Pfizer model. The results were determined by Medical Scientists Inc., an independent organization.Mr. McKinnell praised Gov. Jeb Bush’s willingness to try the approach despite opposition in some quarters in Florida. Meanwhile, Pfizer is talking with several employer groups about applying similar principles and is looking for partners overseas for analogous projects in Germany, Italy and Sweden.Under the current contract, Pfizer is exempt from paying heavier rebates on drugs for Medicaid patients in Florida, in exchange for offering its disease-management services.

However, earlier this year, the Florida Legislature put a stop to new contracts like this that offer value-added programs in lieu of supplemental rebates. Pfizer’s program remains in force through September 2005, and the company said it would use the positive results in an effort to persuade lawmakers to reconsider allowing such plans beyond then. Pfizer said that the program has reached nearly 150,000 Medicaid beneficiaries in Florida.

But the State of Florida is by no means as happy as Pfizer thinks it should be, or as the WSJ’s cheerleading suggests it is. Why not?

The disconnect between Medicaid, Florida lawmakers, and Pfizer hinges on a scathing report put out by the Office of Program Policy Analysis and Government accountability several months ago. In a roundhouse blow to Medicaid DM in general, the OPPAGA said that the Legislature’s big hopes for disease management never panned out; big savings weren’t being realized, the numbers that were reported were suspect at best, agency oversight was weak, and many of the recipients that were supposed to be in the program weren’t. In fact, only about a quarter of the chronically ill patients ever made it into DM. Their penetration of disease categories were only 19% for Asthma, 29% for Diabetes, 17% for CHF and 22% for Hypertension. (though they were at 69% for HIV)

Based on OPPAGA methodology, DM did pay back $1.46 in savings for every $1 spent. LifeMasters, for example, was credited with saving slightly more than $5 million for its CHF program, comparing the $7.63 million in program costs with $12.66 million in gross savings. Pfizer produced $900,000 in net savings in a program that cost $7.5 million. And in a field where there are no "perfect methodologies," OPPAGA said that Pfizer’s calculations for determining gross savings were fundamentally flawed, seriously inflating its earliest returns. Just don’t tell that to Pfizer, which fires back that OPPAGA is the one that’s guilty of fuzzy math."The report is not accurate," counters Cox. "It had several glaring errors in it. They didn’t even recognize that Pfizer was paying for the program."

But perhaps even more convincing for state legislators, OPPAGA had already rendered a negative verdict on the kind of value-added program that Pfizer championed. Not only were drug companies avoiding discounts or supplemental cash rebates if they offered value-added programs, the state agency maintained, so were their competitors. Any drug company with a competing product didn’t have to discount its price significantly to get a drug on the preferred drug list if Pfizer and the others weren’t discounting at all.

In fact the state believes that it gave up closer to $60m in rebates and discounts to get those $40m in savings. In other words, DSM works but not well enough. That has a nasty implication for drug companies trying to use DSM as a wedge into preferred positions on formularies. Payers may believe that they are better off just getting the maximum discount possible from the pharma company (which its competitors then have to match) and paying for the DSM themselves, rather than giving the pharma company a better deal and hoping that they’ll save more in payback from a the DSM process that the pharma funds. This should be pretty good news on the face of it for the independent DSM vendors like Lifemasters and American Healthways, but then again there are three sides to every story.

The third side has been causing a fuss in the DSM community this week. A couple of different studies have not such good news for the whole DSM community. One from Texas is about CHF patients using ACE inhibitors, and another is about the results of Kaiser Permanente’s DSM programs since 1996.

The

first study from Univ. Texas researchers showed that a DSM program for a chronically ill populations with CHF and diabetes didn’t save any money. Smartmoney reports that:

After 18 months, the disease management group lived an average of 76 days longer than those in the control group. But the study showed no difference in doctor visits, hospitalizations and prescription drug costs.

"Unfortunately, it did not save any money at all," said Dr. Autumn Dawn Galbreath, the study’s lead author. She noted that some states such as Florida have set up disease management programs and then cut their Medicaid programs in anticipation of savings. She said previous studies of disease management programs were smaller. She also said they preceded newer treatment guidelines, which appear to be more effective in managing heart disease. For example, heart patients are now routinely put on blood-pressure lowering medications known as ACE inhibitors. Fewer than half of patients in previous disease management studies were on ACE inhibitors, while 77% of patients in the Texas study were on them, researchers said.

Meanwhile the Kaiser study in Health Affairs (abstract here, full paper here) comes straight out and says that costs for the group in the DSM programs increased, as did quality indicators. Some extracts from the Kaiser study:

Costs rose for each of the four conditions during the study period. After adjustment for age, sex, and inflation, annual costs for CAD patients, for example, rose $2,110, or 19 percent. Among adults without the conditions, costs increased by fewer real dollars yet by greater or equal percentages. For patients with and without the four conditions, costs rose in each of the five categories (data not shown). The only exception was hospital costs among diabetes patients, which stayed the same. Increases were steepest for pharmacy costs and least for hospital costs.

Hospital admissions increased less on a percentage basis in the chronic disease populations than in their comparison populations, and, with the exception of heart failure, so did hospital days. Diabetes and asthma patients had fewer hospitalizations in 2002 than in 1996, even as hospital days stayed about the same. Heart failure and CAD patients had more hospital days in 2002 than in 1996…..ER visits decreased by a greater percentage for asthma patients than for their comparison group.

A commentary from some senior staff at Permanente suggested that even though costs went up for the DSM group, there were savings over what the costs for the groups in the absence of the DSM program would have been. Of course there wasn’t a control group for Kaiser like there was in the Texas case. However, most quality measures or process measure outcomes such as levels of LDL, etc, were overwhelmingly positive. And the commentary also pointed out that Kaiser patients were relatively well managed (and had relatively little money spent on them) in advance of the program’s creation. So it appears that finding cost savings is very hard–especially if you’re not screwing up in the first place–while improving care quality is somewhat easier.

Of course, the members of the online DM Forum had various opinions, ranging from Al Lewis saying that

you could surf in Tahiti even if the "old school" said you couldn’t (i.e. he didn’t believe the Texas study) to those (Vince Kuratis) who said that the problem was either the patients were already too well managed — already 77% of them were on their ACE inhibitors — or (Mary Wieg) that they weren’t sick enough on average and that DSM should concentrate on the sickest ones. Still others (Margaret Radzwill) suggested that the actual DM process itself was flawed because there were fewer patients on ACE inhibitors at the end of the study than the start. And occasional TCHB contributor Dave Moskowitz put out a press release saying that the ACE inhibitors being used were the wrong ones in the wrong dose! (There’s alot more comments at the Forum and if you’re interested in this topic you should sign up).

There’s a lot to chew on here, but the obvious conclusion is that while DSM is good for patients, it’s hard to get some patients into it and once you get past the really low hanging fruit, it may not be that good for the bank balances of the sponsoring plan/payer. That plans have been reluctant to do DSM is no new news. Don’t forget that most Americans will move from their health plan in less than two years. So the incentive to put these programs out there remains cloudy for most private plans because even if they do pay back, the money will be saved by the next plan, not them. So we shouldn’t be surprised that DSM is not storming the world.

But it’s a bit of a shock to find that DSM might potentially hurt the bottom line of a plan like Kaiser that tends to keep its patients around. (Although the Kaiser top brass apparently don’t think that it is hurting them, other health plan execs might not be so sanguine). As Medicare is starting to lumber towards DSM this is going to be a big discussion issue, and it would be very nice to know what’s really going on.

UPDATE: Mary Weig, who I referenced as saying that the patients in the Texas study weren’t

sick enough on average and that DSM should concentrate on the sickest ones, writes in accusing me of being a Fox News employee:

The way you quoted me was a bit misleading. My point was that DM programs should concentrate on people who are not complying with optimum treatment plans–as well as the sickest ones. If they don’t comply with optimum treatment plans, they will end up sicker eventually. That’s why stratification and focus are so important.

This piece has generated quite a bit of feedback (some of it quite complimentary), and at least one excellent detailed response. So please check back for more on DSM tommorow. (And no, of course Mary never said I should work for Fox, but if they’re hiring….)

The NEJM has an article about the IOM patient safety report five years on. It’s by by a pretty elite group; Drew Altman of Kaiser Family Foundation, Carolyn Clancy, head of AHQR, and Bob Blendon at Harvard. Basically they are over kind to the system, suggesting that a move from 4% to 7% of hospitals putting in CPOE is a big deal, when it’s not really. I hope to have Michael Millenson, who is not so kind to the system commenting on this in the near future in TCHB. Anyway, the authors also note that the public perception of health care providers’ safety has been considerably reduced:

Unfortunately, despite five years of focused attention, people do not seem to feel safer. More than half (55 percent) of the respondents in our survey said that they are currently dissatisfied with the quality of health care in this country — as compared with 44 percent four years ago.5 In fact, 40 percent believe that the quality of health care has “gotten worse” in the past five years, whereas only 17 percent think it is better. And half are worried about the safety of their medical care.

Altman, Clancy and Blendon think that we’ll likely solve the patient safety issue as there’s bi-partisan agreement on the need to solve it and the info-tech needed to solve it is becoming more widely used. But they also stumble upon the key issue which is that:

Physicians also strongly oppose public reporting of information on medical errors — perhaps because of worries about malpractice lawsuits, which physicians name as the top concern facing health care and medicine today. In stark contrast, 71 percent of the public believes that public reporting of medical errors by government agencies would be very effective in reducing errors, and 7 in 10 persons say that such reports would tell them “a lot” about the quality of a hospital or a health plan.

Well they’re a lot more optimistic than I am. In over a century of conflicts between what’s good for doctors and what’s good for the public, only one side has ever won. Some leadership from the AMA on this issue would be nice, but I guess they’re busy pissing off the trial lawyers. And the importance placed on that conflict is most of the problem, and it’s one that I fear that the reasonable authors of this article understate.