Evidence still out on disease management as cost saver

Supporters say early research proves the programs' value in boosting health and paring costs, but a study says it's too early to be sure.

By Robert Kazel, amednews staff. Oct. 27, 2003.

Cost-conscious employers and health plans are increasingly offering patients disease management programs for chronic illnesses such as diabetes and congestive heart failure, but very limited evidence has been produced to prove the programs save money, a new report says.

The report by the Center for Studying Health System Change doesn't make judgments about the effectiveness of disease management, nor does it discourage employers from using them as a cost-cutting tool. But it observes that the numerous companies that pay for these programs are largely making a "leap of faith" that disease management actually lowers costs by improving health outcomes.

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That leap of faith has been especially vigorous recently. The total revenue of specialty disease management firms rose from $85 million in 1997 to $600 million in 2002, the study said.

Disease management in theory has "a very substantial basis behind it" and "no one is against it," said Paul Ginsburg, PhD, president of the Washington, D.C.-based policy research organization that produced the report. AMA policy encourages the use of disease management programs provided they follow a list of ways physicians must be involved; for example, physicians may not be overruled by nonphysicians.

Plan sponsors appear to be "voting with their feet" by adopting the programs in greater numbers, Dr. Ginsburg said. But the growth would be even stronger if employers had better proof of future savings, he added.

"I don't mean the evidence is negative -- there just isn't much there," Dr. Ginsburg said.

Revenue of specialty disease management companies rose from $85 million in 1997 to $600 million in 2002.

Cost savings can be hard to measure because of changing membership within health plans and work forces.

"These programs are really a moving target -- that's part of the problem of coming up with reliable measures of effectiveness," said Glen P. Mays, PhD, senior health researcher at the center and one of the study's authors.

Proponents of disease management say carefully designed programs do save employers money and that time will make this clear. The best programs reduce employee absenteeism and improve their health over the short term for many illnesses, said Paul Kaplan, MD, chief medical officer of BlueCross BlueShield of Delaware. Long-term cost effectiveness likely will be seen as soon as it can be adequately gauged, he said.

"There is no gold standard for how to measure return on investment, yet," Dr. Kaplan said. "The industry as a whole needs to adopt a single standard." He noted that some cost benefits might not be realized for years. Some diabetics, for example, may avoid blindness or renal failure in the future by enrolling in disease management programs now, Dr. Kaplan said.

In addition, sometimes it's difficult to discern cost savings early on because disease management itself can uncover illnesses that require expensive treatment right away, he said. For instance, coronary artery disease patients in disease management often undergo bypass surgery during their first year in the program because doctors detect problems that otherwise would have been overlooked, he said.

It's not surprising that plan sponsors are not yet convinced about how much money they might actually save, said David Nash, MD, professor of health policy at Jefferson Medical College in Philadelphia and editor in chief of the journal Disease Management.

"I can understand why employers feel that way because we are just now getting the message out about the value of these programs," he said.

The wide variety of programs available also can be perplexing to plan sponsors, who have trouble discerning the effectiveness of one approach compared with many others, said Bob Stone, president of the Disease Management Assn. of America, an industry group. "Disease management is not homogenous," said Stone, executive vice president of Nashville-based American Healthways, a leading disease management firm with a patient base of 900,000. "We're all making hamburger, but our recipes are different so our hamburgers look different and taste different and are shaped different."

But well-established disease management firms are well on their way to proving that cost savings can be substantial, Stone said. In September, American Healthways announced that a disease management program for 17 chronic conditions, administered for BlueCross BlueShield of Minnesota since 2001, has produced a projected reduction in health care spending of about 2% to 3% for fully insured, commercial plan sponsors.

The Blues plan measured a 14% cut in hospital admissions and an 18% reduction in emergency department visits for the 130,000 patients in the program, American Healthways said.

Dr. Ginsburg said much of the research done to establish cost savings so far has been limited to certain patient populations or health plans.

"I'm not dismissing that research as not being useful," he said. But he added that scattered industry studies that detect cost savings probably won't be sufficient to persuade many large employers or the Medicare program that disease management definitely is cost-effective.