1. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Promoting Transparency in Medicaid Chronic Care Outcomes June 2008

2. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Agenda How not to measure your chronic care disease management outcomes How to measure your chronic care disease management outcomes Examples

3. © 2008 DMPC www.dismgmt.comwww.dismgmt.com How not to measure: In this example… …Assume that “trend” is already taken into account correctly Focus on the baseline and contract period comparison

4. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Base Case: Example from Asthma First asthmatic has a $1000 IP claim in 2005 2005 (baseline) 2006 (contract) Asthmatic #11000 Asthmatic #2 Cost/asthmatic

5. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Example from Asthma Second asthmatic has an IP claim in 2006 while first asthmatic goes on drugs (common post-event) 2005 (baseline) 2006 (contract) Asthmatic #11000100 Asthmatic #201000 Cost/asthmatic What is the Cost/asthmatic In the baseline?

6. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Cost/asthmatic in baseline? 2005 (baseline) 2006 (contract) Asthmatic #11000100 Asthmatic #201000 Cost/asthmatic $1000 Vendors don’t count #2 in 2005 bec. he can’t be found

7. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Cost/asthmatic in contract period? 2005 (baseline) 2006 (contract) Asthmatic #11000100 Asthmatic #201000 Cost/asthmatic $1000$550

8. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Why Pre-Post Overstates Savings 2005 (baseline) 2006 (contract) Asthmatic #11000100 Asthmatic #201000 Cost/asthmatic $1000$550 In this case, a “dummy population” falls 45% on its own without DM due to the magic Of actuarial “black boxes”

9. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Agenda How not to measure your chronic care disease management outcomes How to measure your chronic care disease management outcomes Examples

10. © 2008 DMPC www.dismgmt.comwww.dismgmt.com The Valid Way to Check Pre-Post Savings Claims –You look at the event rates overall in the plan (or in your own organization if large enough) over time As though you were measuring a birth rate. Very simple As in this example, count total IP (and ER) events, divide by 1000

11. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Asthma events in the state as a whole 2005 (baseline) 2006 (contract) Asthmatic #11000100 Asthmatic #201000 Inpatient events/year 11 Actuarial method shows 45% savings Non-actuarial transparent approach shows no change in costs

12. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Let’s look at one state’s numbers These are simply the ER and IP events primary-coded for the disease in question These events are exactly what you are trying to avoid through DM (chronic burden * poor management = ER and IP usage by ICD9 code) –Over time –Pre and post disease management

13. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Agenda How not to measure your chronic care disease management outcomes How to measure your chronic care disease management outcomes Examples

14. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Trends in total admissions/ER visits prior to DM (disabled population)

15. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Trends in total admissions/ER visits following DM (thick lines)

16. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Implications of this simple analysis DM is working modestly well for CHF but not for CAD, asthma or diabetes COPD needs a program! You can easily move from these reductions to an ROI using a “number needed to decrease” spreadsheet (on request) Let’s see how one plan compares to other plans (not enough comparisons For states in the database…yet)

17. © 2008 DMPC www.dismgmt.comwww.dismgmt.com Incidence Rate Per 1,000 Members Asthma Rates Pre DM Partial DM Full DM Example: total asthma events across health plans (not states – not enough data yet)

18. © 2008 DMPC www.dismgmt.comwww.dismgmt.com What did this slide show? Plan 5 has a very successful asthma program (assume that age profiles of these plans are similar) The other plans instituted asthma programs and failed to show actual savings despite giddy pre-post reports claiming ROIs.

19. © 2008 DMPC www.dismgmt.comwww.dismgmt.com What are the implications for states of this simple transparent analysis? You can compare yourselves to other states –Chronic disease burden * how badly it is managed = “failure rate” – ER and IP use You can now compare your health plans to one another…and to history –You can actually determine if they are accomplishing anything other than squeezing providers and denying care