1. The 2004 Healthcare Conference 25-27 April 2004, Scarman House, University of Warwick David Mirkin & Joanne Alder

2. DISEASE MANAGEMENT  What is a DM program?  Why do we need DM?  Clinical Measures of Success  Actuarial Issues in Measurement  Does a DM program save money?

3. DMAA Definition of DM  Disease Management is a system of coordinated health care interventions and communications for populations with conditions in which patient self-care efforts are significant. Disease management:  supports the physician or practitioner/patient relationship and plan of care  emphasizes prevention of exacerbations and complications utilizing evidence-based practice guide lines and patient empowerment strategies  evaluates clinical, humanistic and economic outcomes on an ongoing basis with the goal of improving overall health.

4. DMAA Definition of DM :  Disease Management Components include:  Population Identification processes  Evidence-based practice guidelines  Collaborative practice models to include physician and support- service providers  Patient self-management education (may include primary prevention, behavior modification programs, and compliance/surveillance)  Process and outcomes measurement, evaluation, and management  Routine reporting/feedback loop (may include communication with patient, physician, health plan and ancillary providers, and practice profiling)

5. Critical to DM Success  Best Practice: Making sure physicians know and use the latest treatment approaches. (evidence based best practice guidelines)  Compliance: Teaching patients about the disease and how to self-manage  Utilization: Monitoring care for appropriateness.  Outcomes: Data analysis and feedback to providers and patients

6. Types of DM Programs  “Silo” or Disease Specific Programs  Diabetes  CHF  Coronary Artery Disease  Asthma  COPD  Integrated DM Programs (Patients with 2 or more chronic diseases)

7. DM Goals  Short Term Goals and Interventions  Identify and enroll patients with the disease.  Assess patients risk level and assign to risk category.  Improve treatment regimens.  Reduce related hospitalizations, emergency room visits and ancillary services.  Increase required outpatient screening visits and tests.  Monitor pertinent clinical data.  Improve therapy adherence.  Increase patient satisfaction

8. DM Goals  Outcomes: Long Term Goals and Measurements of Effect  Improve/maintain optimal health.  Evidence of therapy adherence.  Improved clinical status as measured by disease specific clinical indicators.  Reduced utilization of hospitalization, emergency room.  Reduced specific disease related complications.  Patient satisfaction.  Physician compliance.

9. Why Disease Management?  A Common Lay Question & Perception  “Why do we need disease management programs? I thought that we paid doctors to manage the patients. Why do we need to pay extra money to do what the doctors are being paid to do”

10. Why Disease Management?  Outcomes which are possible (evidence based literature supports) are not being achieved for the population at risk  Clinical  Functional  Financial

11. The Bottom Line Premium Worker’s Earnings General Inflation KFF/HRET, 9/2003

12. Population Outcome Failure  Evidence based best practice not applied  Large Variances in practices nationwide  Poor patient compliance  Lack of knowledge of disease  Not empowered  Lack of self management  Fragmentation of Care  Lack and Fragmentation of Resources  Lack of system integration

13. From Silos To Quality Care Payers Consumers/ Patients Hospitals Providers Employers Healthcare System DM Integration

14. Do You Need To Have Programs For All Diseases?  The 80-20 rule still holds:  80% of the health care costs tend to come from 20% of the patients, therefore that’s where the attention should focus.

15. Chronic Disease United States 2000  US Population Year 2000 – 276 million  151 million (55%) are well or have acute illnesses  125 million (45%) have chronic conditions  125 Million With Chronic Illness  70 million (56%) have 1 chronic Condition  55 million (44%) have 2 or more chronic conditions

16. Future Cost of Chronic Disease  By 2030, 148 million Americans will have a chronic disease and their health bill will reach $798 Billion.

17. DM Program Outcomes Metrics  Clinical/Functional ROI  Decreased Morbidity  Decreased Mortality  Improved Quality of Life  Financial ROI  Cost Minimization  Cost Benefit  Cost Effectiveness

18. CLINICAL OUTCOME METRICS FOR DIABETES METRIC METRIC DEFINITION Foot examination % of members with diabetes who completed one foot examination using Semmes-Weinstein monofilament, palpation of pulses and visual examination in the measurement year. ACE inhibitors/ARBs % of diabetes members with microalbuminuria or clinical albuminuria (ADA Guidelines) taking ACE inhibitors or ARB. A1C level at target % of diabetes members with an A1C level <7.0% in the past year. (ADA Guideline) LDL level at target Percentage of diabetes members with LDL levels < 100 mg/dL within the past two measurement years. (use last measure to report) (ATP III Guideline)

19. CLINICAL OUTCOME METRICS FOR DIABETES METRIC METRIC DEFINITION Fasting lipid panel % of members with diabetes who completed one test in the measurement year LDL level* % of diabetes members with LDL < 130 mg/dL within the past two measurement years. (use last measure to report) ASA % of diabetes members >30 years of age taking an aspirin each day. Smoking quit rate % of diabetes members who reported smoking at the beginning of the measurement period who at the time of measurement had quit smoking

20. Diabetes Disease Management Outcomes  DCCT/NIH Trials  Retinopathy ↓ 35% - 74%  Severe non-proliferative retinopathy and laser therapy ↓ 45%  1 st appearance any retinopathy ↓ 27%  Development Microalbuminuria ↓ 35%  Development Neuropathy ↓ 60%

21. Congestive Heart Failure: Outcomes  University of Pennsylvania Health Systems- Hospitalization rates dropped dramatically from 532/1,000 patients to 19/1,000 patients.

22. Ischemic Heart Disease Outcomes - Statin Treatment Reduces CHD Events and Deaths Milliman Actuarial Models, Framingham Risk Scoring, NHANES III, ATP III

23. Actuarial Issues in the Financial Measurement of Disease Management Programs  Return on Investment  Regression to the Mean  Statistical Credibility  Trend Estimation  Operational & Other Issues

24. Measurement of Total Program Savings  Method One: Comparison of pre-enrollment medical expenses (baseline year) to post enrollment expenses (intervention year).  Method Two: Comparison of medical expenses for a control group to an intervention group for like period.  Method Three: Comparison of requested services to approved services or other detailed comparisons

25. Actuarial Considerations in the Measurement of Total Program Savings  Regression to the Mean  Statistical Credibility  Others 1. Depends on method used 2. Population management issues 3. Operational issues

26. Other Considerations for Measurement of Program Savings  Method One: Pre-enrollment expenses to post enrollment expense comparison 1. Utilisation and cost trend estimation 2. IBNR and claims runoff issues  Method Two: Control group versus intervention group expense comparison 1. Age/sex4. Underwriting 2. Benefit design5. Others 3. Industry

27. Modified Exponential Modeling for AMI Admissions

28. Modified Exponential Modeling for Bypass Surgery (CABG)

29. Table 3 Comparison of One Year, Three Year, and Modeled Ultimate Rates of Utilization

30. Why Should We Talk About ‘Statistical Credibility’?  Disease populations are often small percentages of the total population  Disease population is high cost, high variance  Often savings calculations are based on only a portion of the health care dollar for the diseased members  Savings guarantees and ROI target calculations need to reflect program impact rather than statistical fluctuation  An ignorance of credibility can lead to faulty or misleading conclusions

31. Typical Disease Prevalence Rates for a US Commercial Population (Employer Insured Active Employees) Diabetes3.8% - 8.1% Asthma1.6% - 5.1% CAD1.9% - 2.6% CHF0.3% - 1.1% COPD0.3% - 1.2% Source: Disease Management News, September 25, 2002

32. Typical PMPM Claim Costs Ranges by Disease Category for a Commercial Population (US $$$) Diabetes $400 - $800 Asthma $150 - $500 CAD $400 - $1,300 CHF$1,500 - $2,100 COPD $500 - $1,400 Source: Disease Management News, September 25, 2002

33. The Choice