Disease management is not only here to stay but it's bigger than you realize. (Disease Management).

Discover why one physician executive is convinced that disease management will be around For a long time to come.

GROWING DISSATISFACTION with managed care, worsening access for consumers and mounting financial losses among many health care providers are likely to precipitate upheavals in health care systems.

Few are willing to predict how this will turn out, and those who attempt to read the future will probably be wrong. However, one prediction is a safe bet: disease management will not only survive the coming upheaval, but will thrive.

What is disease management?

Disease management is any coordinated system of health care interventions and communications for populations with conditions in which patient self-care efforts are significant. (1)

This strategy is suited for patients with chronic--and costly--illness, striving to provide timely, cost-effective care at the most appropriate location and level of service.

This contrasts with relying solely on the "provider-patient" encounter to deliver health care. Instead, this strategy packages multiple other treatment modalities, such as nurses case management, telephonic and Internet-based strategies, clinical guidelines and self-care in systems of care devoted to achieving specific outcomes.

There is widespread belief in this approach. Insurers gave at least $500 million to the estimated 160 disease management vendors in the year 2000, and that the figure could easily grow to $20 billion by 2010. (2)

Two widely known features of disease management account for such optimism:

(1.) Disease management is just beginning to demonstrate it can reduce downstream utilization, improve clinical outcomes and achieve a high degree of patient satisfaction. While credible data proving this are lacking in the peer review scientific literature, if companies offering disease management services take the time to share their results outside of their proprietary business relationships, purchasers of health care are likely to compel health care insurers to include disease management alongside traditional hospital and physician-based care.

(2.) Disease management is adaptable in any health care financing arrangement. Vendors typically assume control of a portion of the insurance premium devoted to medical care, in effect becoming a health care provider. They differ from traditional hospital or physician providers in that:

* They assume and profit from varying degrees of insurance risk

* Are not bound by geography or referral patterns

* Typically maintain lean cost structures.

These three key features are very well suited for the uncertainty of the health care environment and are independent of the current poor prognosis of managed care.

While managed care has been all about cost, disease management is about cost, quality and value.

The next generation of health care

Given its independence from managed care and success in lowering utilization and achieving outcomes, disease management is likely to grow. However, there are two additional reasons to believe that this strategy will not only grow, but could profoundly transform the health care system.

1. Disruptive Innovation

In The Innovator's Dilemma. When New Technologies Cause Great Firms to Fail, (3) Clayton Christenson points Out how low cost alternative "disruptive technologies" are constantly undermining the complex systems developed in response to yesterday's problems.

While it's a reach to apply the lessons of the demise of the mainframe computer industry from smaller cheaper hard drives and desk top computers to health care, the current complicated, unwieldy and costly system of hospitals and office practices may be more vulnerable to disruptive technologies than ever imagined.

Christenson takes this point of view in a follow-up Harvard Business Review article.4 Noting that traditional health care is unable to deliver simpler, more convenient and less costly services to the majority of consumers, he argues alternate strategies are "sneaking from below" to provide home-based self care or nurse directed care to replace the increasingly complex and unwieldy physician-patient encounter used as the dominant mechanism of health care delivery today.

Technologic innovation is already enabling patients with diabetes to monitor their own blood glucose, use sophisticated information systems to monitor medication adjustments and avoid complications under the virtual care of Web-enabled, non-physician health professionals.

Patients with congestive heart failure can have their fluid status and medication compliance virtually assessed and followed with periodic phone calls or email messages. These and other innovations are exactly what disease management packages and delivers for common and costly conditions such as congestive heart failure, asthma, hypertension, chronic obstructive pulmonary disease and cancer.

Critics doubt health care consumers would ever give up their local physician and community hospital. Advocates of disease management agree, but are actively promoting services specifically aimed reducing demand for these traditional services.

Since these vendors typically assume responsibility for the portion of the premium that typically goes to hospitals and physicians, use of innovative care strategies that are likely to reduce utilization of usual health care has significant implications for traditional health care providers. Mainframe computers and cable-actuated shovels still exist, but occupy only a small part of the information management and excavating business respectively.

Hospitals and traditional physician-based clinics may be next. They won't go away, but they will be smaller. Since disruptive technologies cannot be avoided, the only question is not when, but how much.

2. Health care Experience

In The Experience Economy, B. Joseph Pine and colleagues argue the traditional service economy is about to be supplanted by a growing industry of providing memorable "experiences."

Goods became commodities long ago and the typical, otherwise mundane services provided by widely admired and nimble companies like Starbucks and Disney (favorites of many health care consultants) have long since evolved into giving the consumer a far richer package than just a mere cup of coffee or a five minute amusement park ride.

Instead, Starbucks and Disney patrons are satisfied by sights, smells and interactions that enable the companies to charge a premium for their products.

This next step to immerse patients in a satisfying experience that is far removed from what awaits consumers in primary care waiting rooms and hospital gurneys--where patients can routinely expect drab surroundings, long waits, hassled office staff and distant arrogant clinicians in a brief office or bedside visit.

The health care management literature is replete with 'how to' articles on overcoming these shortcomings. Their popularity shows the problems are widespread and persistent.

In contrast, disease management companies routinely emphasize the experience in their interactions with patients. Unburdened by a legacy of entitled care providers struggling to preserve razor thin margins, these companies are aggressively building relationships with patients with frequent outreach, tailored messaging and use of consumer preferences to build a level of loyalty that is the exception rather than the rule in other parts of the health care system.

When done right, this "high touch" approach creates a rich, nurturing and ultimately satisfying environment for the patient--a highly valued experience.

While providing such an experience has never been explicitly described in the context of disease management, this level of service and customization is being widely leveraged. The fact that this occurs in the context of long-term illness only makes the patient even more open to the kind, personal touch that can make all the difference in a patient's journey through the health care system.

What's next?

As the companies and other entities that describe themselves as disease management vendors deliver savings, quality and satisfaction with a nimble, virtual and low-cost approach, it is likely to reduce reliance on traditional health care services and stress their profitability.

Since disease management also leverages disruptive innovations and provides a more satisfying experience for the patient independent of managed care, the likelihood that disease management will profoundly affect health care is very significant. It may utterly transform it.

Unfortunately, because traditional health care providers such as hospitals and physician-based clinics have a culture of physician-based care, are financially struggling and are traditionally loathe to assume insurance risk, it's unlikely there will be widespread adoption of disease management in these settings.

Several institutions have attempted small-scale programs, usually supported by cross-subsidization from other more profitable tertiary care departments. This approach has a poor prognosis, since the disease management program ultimately depends on the profitability of unrelated business lines instead of being what it is meant to be: an approach to managing risk, utilization and quality for health care insurance members with costly diseases.

Accordingly, one prediction--despite the current environment in health care--is safe: disease management will continue to grow and be financed as independent providers separate from traditional health care industries and closely align with insurance companies.

However, disease management may mean much more to the evolution of the health care industry than currently appreciated. Health care leaders would be wise to keep a close eye on this.

References

(1.) www.dmaa.org (current as of 9/18/02)

(2.) Matheson, D, Robinson, T. "Disease Management Takes Flight." Boston consulting Group. www.bcg.com (current as of 9/18/02)

(3.) Christenson, C. The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business School Press, 1997.

(4.) Christensen, CM, Bohmer, R, Kenagy, J. "Will Disruptive Innovations Cure Healthcare?" Harvard Business Review. 2000, September-October, 102-112.

(5.) Pine, J, Gilmore, JH, Pine, BJ, II. The Experience Economy Harvard Business School Press, 1999.

Jaan Sidorov, MD, is medical director of the care coordination department of the Geisinger Health Plan. He is also a practicing primary care internist, with an office located in the department of general internal medicine in the Geisinger Medical Center in Danville, Pa, He can be reached by phone at 570-271-8763 or by e-mail at [e-mail].