A new model: outpatient pediatric diabetes improves care, profits and protocols for managing other chronic illnesses.

It is a well-known chronic illness conundrum: even though studies prove the efficacy of outpatient care, and the importance of preventive services in improving long-term health, insurers are just not geared to cover these costs.

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Count on payers for complications and hospitalizations. But when it comes to care and prevention in an ambulatory setting--even if the outcome is better--insurers fall woefully short.

Connecticut Children's Medical Center (CCMC), like institutions nationwide, felt the sting. Home to the University of Connecticut School of Medicine Department of pediatrics, CCMC found that delivering quality outpatient diabetic care to children--the right approach--was simply not profitable.

A better way

Believing in the quality of its care, and unwilling to deliver anything less than the best from the most appropriate provider, CCMC staff reconfigured operations, captured outcome data to substantiate claims, and won over payers for a new system that rewarded demonstrated performance.

How did CCMC unite providers, patients and payers alike to create a new patient-responsive dynamic? How did staff negotiate fair pay for proven performance? And what does CCMC's success with pediatric diabetes mean for managing certain other chronic illnesses nationwide? Read on.

Follow the gold standard

CCMC's approach to care capitalized on findings from the 1993 diabetes control and complications trial (DCCT), embraced by the medical community as the gold standard for treating youth with type 1 diabetes mellitus (T1DM). (1)

This trial showed that intensive insulin regimens for adolescents and adults dramatically reduced A1C levels--a marker of improved metabolic control--which in turn slowed the progression of microvascular complications.

Hailing the value of a multidisciplinary team, the trial proved that intense care, together with focused consultation, educational services and family involvement could reduce complications and dramatically improve patients' quality of life.

Unlike most adults, children with newly diagnosed T1DM, and some with Type 2 diabetes, require immediate initiation of insulin treatment. Additionally, youngsters and their families need intense individualized instruction in diabetes management skills.

After about three months, patients are generally medically stable and families sufficiently comfortable and competent to handle the routine associated with daily diabetes management.

Specialty care and support

The endocrinology practice at CCMC had the resources it needed to deliver high-quality outpatient, multidisciplinary, team-based care. An intense, proactive approach helped prevent or shorten the inpatient stay for hospitalized youths and shifted care to the ambulatory setting as soon as patients were medically stable.

Patients benefited from a team of specialists that included endocrinologists, advanced practice registered nurses (APRN), registered nurses (RN), nurse/nutrition educators, registered dietitians (RD), psychological support specialists and medical assistants. Additionally, all non-physician team members were certified diabetes educators (CDE).

Delivered by competent and credentialed professionals--not all of whom were physicians--outpatient services included urgent and scheduled care, phone contacts, response to e-mails and faxes, diabetes and nutrition self-management counseling and educational materials.

And herein was the reimbursement hitch: many of the diabetes-related services the team provided, crucial to better outcomes, fell into the payer-defined category of "non-physician" or "non-covered" care.

Patients continued to receive the finest treatment, from a team of dedicated professionals, but the program itself was sinking. Either non-physician providers delivered care that wasn't reimbursed or physicians stepped in--either way costs escalated.

Initially the resulting deficits were covered by hospital funding and/or indirectly through research dollars. However, CCMC could not continue to absorb these costs, posing a real threat to the sustainability of the pediatric diabetes team. Could CCMC make care delivery profitable in order for its program to be self-sustaining?

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In a word, yes, but not without redesigning the practice around four novel components.

1. An efficient, patient-focused service delivery model

CCMC's new model reorganized existing services into three distinct business lines: new-onset care, established care and insulin pump initiation. Staff meticulously documented actual and desired services within each business line, determined who currently delivered the care and who should deliver it, and logged service delivery time.

The result: A game plan for allocating providers and resources more effectively to maximize productivity.

For example, in the case of the new, emergent T1DM patient, team-based care was preferred. By assigning T1DM patient referrals to advanced practice nurses, instead of physicians, CCMC utilized a more cost-efficient provider resource for a significant portion of an unpredictable--but urgent--patient care service. Though no longer leading the charge, but with fewer interruptions to a busy clinic schedule, the on-call physician still retained care oversight.

2. Physician and non-physician capacity and commitment agreements

These understandings featured the fine print--an even more detailed resource reckoning to:

* Ensure the delivery of high-quality patient care by the most appropriate resource

* Allot provider clinical time

* Delineate performance expectations

Certified diabetes educators, for example, agreed to reconfigure their responsibilities to spend half their time responding to telephone calls and half their time conducting on-site patient education.

Registered dietitians expanded their duties so they had time to see scheduled diabetes and endocrine patients, coordinate lipid disorder patients, and help with scheduled insulin pump starts.

These task assessments were critical when the team moved forward to negotiate reimbursement for care delivered by other than physicians.

3. Financial and volume projections

Armed with a clear understanding of how to deliver care in each business line, the staff developed financial and volume projections to analyze associated costs and revenues, and to be certain CCMC had enough people power to meet current and future demands.

4. Outcomes and cost tracking

Having accomplished the considerable challenge of retooling for operational efficiency, CCMC now had to demonstrate improvement in pediatric diabetes outcomes and assemble the data needed to persuade payers to rethink reimbursements--rewarding and compensating for the use of proven treatment protocols that resulted in better outcomes.

The CCMC pediatric diabetes team built a clinical database to provide staff with immediate access to a variety of patient outcomes, from episodes of hypoglycemia to hospitalizations. Team members checked the database frequently to assess outcomes and enhance patient care.

At the core of data collection was a system to track all diabetes care provided by all team members for both patient visits and non-face-to-face contacts. The tracking system required team members to complete contact sheets, which they filed in the patient's medical record and entered into the database during the next medical visit.

This storehouse of data demonstrated sustained improvement of all outcomes over the past five years in the context of steady increases in patient volume. Furthermore, analysis of trends in metabolic control in various patient subsets had resulted in patient, family and friend-centered improvement initiatives for both adolescents and minorities.

Fair pay for quality care

The database proved crucial in CCMC's quest for fair pay for top-notch care. In capturing outcomes, CCMC had a highly effective tool for continuous quality improvement.

The data also provided payers with a snapshot of their covered patients, showing low A1C levels coupled with low rates of emergency department visits and hospitalizations. Compared to the national average of 13 hospitalizations and 29 emergency department visits per 100 person-years, the CCMC averages in 2006 were 2.3 and 15, respectively.

Referencing its business lines and services, CCMC could explain the continuous care children with diabetes required. And the team could back up the benefits of such care with demonstrated outcome improvements.

As a result, payers were open to replacing the fee-for-service structure with a viable alternative--a global rate model that would be a better fit for the continuous care requirements of youth with diabetes.

Education, negotiation and collaboration

CCMC held a statewide forum to educate the major payers about pediatric diabetes care and the proposed global rate reimbursement model. Armed with clinical data, CCMC argued for moving intensive diabetes management to the outpatient setting, citing improved care, decreased hospitalization and fewer emergency department visits.

By referencing the growing trend in outpatient volume, the team provided the rationale for shifting care from inpatient to an ambulatory setting for the majority of new-onset patients. The payers were swayed.

The CCMC team developed specific global rate dollar amounts for each of the three business lines, based on the true cost of delivering multidisciplinary care and demonstrating the cost savings for each insurer's enrolled patients.

CCMC then negotiated the actual global rate for each business line with individual payers, settling on an amount for annual review that was proprietary between each payer and CCMC.

Once agreement was reached in principle to change the payment model, both sides worked together to resolve operational hurdles. CCMC considered insurer concerns about a seamless interface with current billing methods.

For instance, the practice implemented internal safeguards to prevent team members from submitting fee-for-service bills for services now covered under the new global fee, and agreed to a hospital-based--instead of a physician practice-based--global rate program to make it easier to generate, among other things, monthly bills.

A broader application

The lessons CCMC learned for improving profitability, productivity, patient access, care coordination, outcomes and reimbursements in the outpatient setting may resonate for other chronic illnesses as well. Specifically, the model is applicable for any chronic illness or disease that requires:

* Intensive face-to-face services delivered in an ambulatory setting

* Non face-to-face services for maintenance, support or management of acute episodes

* Services that could be delivered by both physician and non-physician providers

Most notable of these chronic illnesses would be the care and treatment of cystic fibrosis, obesity and early metabolic syndrome (prediabetes).

Five lessons learned at CCMC could be applied in the chronic illness outpatient realm:

1. Develop categories of care.

CCMC created three business lines--new onset, established and insulin pump care--to describe its patient panel. Other organizations have sorted care into chronic, complex and episodic treatment. Create the categories that work best for the type of patients you serve and the care you deliver.

2. Determine who and when.

For each category created, determine who delivers what, when and for how long. Does the physician need to deliver the service, or can the advanced practice nurse better manage the care? Is the visit scheduled or on an emergency basis? And is the patient treated within the hour, or in the clinic for a two-day evaluation?

3. Set performance expectations.

Delineate and, if necessary, realign tasks for each category of care to be sure the right clinician delivers the right treatment at the right time. This information is crucial to understanding staffing and capacity requirements. Keep the physicians' time pure, so when doctors are with patients, they provide care and treatment and do not get distracted by tasks that support staff could easily handle.

4. Capture and analyze outcomes.

Put data management systems in place to capture statistics that demonstrate improved outcomes. Readily accessible outcome data allow clinicians to continually monitor care quality and adjust care plans as needed for better results. And this is precisely the information that leadership takes to the table when it comes time to negotiate reimbursement with insurers.

5. Lobby for a global rate.

The traditional fee-for-service reimbursement structure may not be the best model for managing chronic illness. The very nature of these debilitating conditions requires preventive care before complications set in, regular and/or continuous attention and often care delivery from other than physicians (that is, non-covered providers). Educate insurers about the nuances of care delivery for the chronic illness you manage and then work together with decision leaders to advance a more equitable reimbursement structure.

A new dynamic

CCMC's approach to care provided the clinical, educational and support services necessary to teach and empower patients and families to be more involved in--and responsible for--improving their health. By transitioning to a global rate, the team could continue to provide these services, project revenues more accurately, and develop programmatic quality improvements to further enhance patient care.

The new reimbursement structure allowed CCMC to maintain and improve a cost-effective model of quality care, which in turn ensured fewer health problems for diabetes patients and decreased payer costs.

Given the burgeoning expense for chronic illness nationwide, CCMC's success raises a compelling case for applying the lessons learned in managing and recouping costs for diabetes to other chronic illnesses as well.

Note: A more detailed chapter discussion of the points raised in this article can be found in the textbook, The Business of Healthcare, published by Greenwood Publishing Group, September 2007.

Jayne Oliva, MBA, is a principal with The Croes*Oliva Group, a team of health care consultants working exclusively with administrative and medical leaders to improve delivery of profitable, patient-focused and streamlined patient care. She can be reached at 781-272-6444, Ext. 103, or [e-mail].