Conquering chronic diseases: disease management programs help patients with chronic illnesses while saving money.

From a call center at National Jewish Medical Center in Denver, Colo., Sue Sinda helps patients understand their illnesses and treat them before they turn into emergencies.

"A lot of people deal with the immediate emergency and don't follow up with education," says the disease management nurse. Patients often end up back in the emergency room or hospitalized for conditions, like asthma, that could have been treated with medication or lifestyle changes.

Sinda worked with a mother in the asthma program for Medicaid enrollees who didn't understand the symptoms leading up to a serious asthma attack. Instead she would wait too long and then rush her 7-year-old to the emergency room when things got critical. "She had a fear of being over-alarmed" about her child's symptoms, Sinda says.

After working with Sinda and other nurses, the mother learned to act faster--to treat symptoms right away, see a primary care doctor and use the right medication to control the child's asthma. After several months, Sinda says, she "felt more independent and comfortable dealing with her child and knowing what to do to avoid emergencies."

Disease management programs target the most costly chronic conditions, like asthma, heart disease, cancer and diabetes. Given that these alone account for the lion's share of Medicaid expenditures--some estimates go as high as 80 percent--efforts to rein in the costs make sense.

"So often," says Dr. Sandeep Wadhwa, vice president of Government Services at McKesson Health Solutions, a disease management contractor for five states, "states enact measures to save money or improve health, so it comes as a surprise that there is an approach that is good for the population's health and good for the budget."

The costs associated with chronic diseases are "overwhelming" state Medicaid budgets, says Kansas Representative Bob Bethell. "We can't continue the spending we've had the past several years. We've got to start managing the diseases."

Depending on the severity of the condition, disease management programs provide varying levels of support--from written educational materials to home visits or frequent phone calls from a registered nurse. By giving patients the tools and knowledge to manage their care, they are less likely to need emergency room and hospital treatment.

FROM CURIOSITY TO COMMONPLACE

Disease management is not a new concept. It is used heavily by private health insurance companies and managed care plans. Ninety-seven percent of health plans have one or more disease management programs, according to the American Association of Health Plans.

Aetna, for example, has 885,000 members in management programs with asthma, congestive heart failure, coronary artery disease, diabetes, low back pain and end-stage renal disease. With disease management, providers monitor patients with chronic diseases; they don't wait for patients to seek care.

"We believe that you must get the members actively involved," says Dr. William C. Popik, Aetna's chief medical officer. "Then they will be in a position to help physicians provide better care and, as we've seen, lower costs."

What is commonplace in the commercial market is now being widely considered in public programs. "Disease management has gone from a curiosity to commonplace to critical in a few short years," says Al Lewis, executive director of the Disease Management Purchasing Consortium. He says the industry has grown 30 percent a year since 1997. Between 2000 and 2004, revenue estimates for disease management vendors jumped from $339 million to $819 million-more than 140 percent.

Virginia and Florida were first to try disease management for Medicaid enrollees in the 1990s. Today, as many as two dozen states have management programs for some Medicaid patients. Many have guaranteed savings (written into contracts with vendors) of 5 percent or more to their Medicaid budgets.

Kentucky Medicaid unveiled a plan to modernize earlier this year and expects to save big money--to the tune of $24 million in the first year alone--by more aggressively managing care and prescriptions for the state's sickest enrollees.

The goal is to give good service without making cuts, says Kentucky Representative Bob DeWeese, a physician. Disease management encourages the "practice of better medicine and better use of prescription drugs." As a result, "patients will be better served."

DO DISEASE MANAGEMENT PROGRAMS WORK?

The case for improvements in quality of life and patient satisfaction is a strong one. "They do improve quality. They help patients feel better and become more empowered to navigate the health system," says Dr. Autumn Dawn Galbreath, director of the University of Texas Disease Management Center in San Antonio.

States are reporting positive results. Emergency room visits and hospital stays are down, more appropriate medications are being used and patients are taking better care of themselves. In a pilot program in Colorado, emergency room visits for Medicaid patients with asthma dropped 86 percent and unscheduled doctors' visits dropped 58 percent, according to the National Jewish Medical Center in Denver.

Disease management programs also have improved the quality of life for people with chronic conditions and have increased satisfaction of health plan members, according to the Georgetown University's Center on an Aging Society.

But can Kentucky officials achieve the savings they need? Although other states have reported some promising results, "the potential for long-term savings is still not known," according to Georgetown University's Center on Aging Society.

And Galbreath of the University of Texas urges caution if lawmakers are only looking to save money. "There is a cost," she says. "It isn't magic." She worries that lawmakers desperate for a financial fix may not find it. "If you're putting all your eggs in this basket, you may he in for a big disappointment." Florida has seen improvements in quality of care, Galbreath says, but they "haven't saved the millions" that people were hoping for.

Doug Porter, assistant secretary for the Washington state Medical Assistance Administration agrees. "We believe better care is being delivered, and we think that should translate into savings." But, he says, states shouldn't think there will be "a huge budget savings, certainly not in the millions."

In the midst of financial uncertainty though, there seems to be agreement about the opportunity. "These are underserved populations," says Dr. David Tinkelman, vice president of Health Initiatives at National Jewish Medical Center. "We have the greatest opportunity for intervention to support, educate and reduce unnecessary costs."

"There is a degree of cost reduction," Tinkelman says. He adds, however, that "the degree of savings will be reflected in the degree of intervention." In other words, the variation in programs belies a simple answer to the cost question. Disease management programs are as different as the states that adopt them.

A number of variables--population served, diseases covered and the contractor's track record--all affect the bottom line. Some diseases yield faster returns than others, says Aetna's Popik. Since much of disease management involves patient education, he says "it takes time." Policymakers must be willing to view disease management as a long-term commitment.

By some accounts, the savings can be significant. Lewis thinks states might expect savings of 2 percent to 3 percent. "We're seeing "overall a 5 to 10 percent reduction in claims costs for the patients we're serving"--largely the disabled, fee-for-service population" says Wadhwa, who is involved with Medicaid disease management programs in five states. "This is "a sizable amount given how sick these people are."

Wadhwa says states should focus on people with disabilities who are not already enrolled in Medicaid managed care. Disease management programs integrate some managed care principles into their care that otherwise do not exist in the fee-for-service population. And people with disabilities "tend to be extremely sick" and typically use more health care resources. This is a "small costly pocket of need," Wadhwa says, "that is exceptionally well-suited" to disease management. Improving health care among this group, he believes, has the most potential to "move the needle from a cost-avoidance perspective."

AVOIDING BUMPS IN THE ROAD

A sometimes thorny issue is that patients often cycle on and off of Medicaid. "Keeping these folks Medicaid eligible is a challenge," says Melanie Brown Woofter, program administrator for Florida Medicaid. "When they go off the rolls, they lose the care. And if they return, the program needs to make up for lost time."

Communication can be another problem. Florida puts disease management nurses in emergency rooms to be closer to their target population. This is even better, according to Tinkelman, who says having an "on-the-ground, face-to-face presence" is most important. "The phone isn't always a viable option."

Another critical factor is getting doctors on board. Without it, Galbreath says, a disease management program is "doomed."

Some physicians believe the programs add another layer of bureaucracy to an already complicated system. "It honestly does give physicians more work, and they don't get paid for doing it," she says. Some doctors also believe it takes away their autonomy and view it as a constant critiquing of the care they're giving.

Disease management providers need to be close to the physicians, Woofter says. "The closer the better.

"We put nurses in community clinics and federally qualified health centers to work with doctors." They've stopped thinking that "someone is looking over their shoulder." Now doctors see that disease management adds resources to the physician-patient relationship, rather than taking them away, Woofter says.

NOT THE END OF THE ROAD

For some, disease management is an important step in a broader process of change in the health care system. "I don't think this is the end of the road," says Washington state's Porter, "It's just another stop along the way." Porter envisions a system that coordinates health care and social services and not just specific diseases. But disease management is an important step, he says. It may not be the silver bullet that many seek, but it is an important refinement to the system. "You'll save a bit of money, and what you'll learn is important in what is coming next," he tells policymakers. For now, he believes, "everyone is rightly waiting to see the results."

DISEASE MANAGEMENT DEFINED

Disease management identifies people with certain health problems and then intervenes to manage their care. Methods differ, as do the diseases that the programs address. States and vendors are managing a lot of diseases--diabetes, asthma, heart failure are the "core three"---and offering a spectrum of services, ranging from telephone counseling to case management, according to Dr. Sandeep Wadhwa, vice president of Government Services at McKesson Health Solutions.

The Disease Management Association of America says disease management should have:

* Ways to identify patients for participation.

* Evidence-based guidelines for care and medication.

* Treatment that includes physicians and support service providers.

* Patient education (may include prevention and behavior modification programs).

* Evaluation of results, such as patient satisfaction, expenditures and use of health care services.

* Routine reporting and feedback between the patients, providers and health plans.

CHARACTERISTICS OF STATE PROGRAMS

State disease management programs vary by:

* Population served. Fee-for-service, case management, disabled, TANF, etc.

* Diseases covered. Some states start small, with an asthma program, for example. Others manage several diseases.

* Buy or build? Some states contract with disease management organizations. Others design an in-house program.

* Legislator role. Nearly two dozen states have legislation authorizing disease management programs. Others pursue programs without legislation.

* Program goals. Some focus specifically on managing pharmaceutical services. Others manage patient care (through medical services and lifestyle counseling, for example).

* Program services. The range of services varies among state programs. Typically, states will offer less intense services (e.g., educational materials, telephone counseling) for patients with less severe conditions and more services (e.g., home visits) for sicker patients.

* Program savings. Most require guaranteed savings through the state's contract with the vendor.

Kristine Goodwin writes from her home in Colorado. She is a former NCSL staffer.