Is it better to build or buy disease management?

Should you build or buy your next disease management program? It depends on the specific circumstances, industry experts say, but here are some factors to consider. Building means you get easier buy-in from physicians, more control over what the program looks like, and all the savings. Buying is easier because the vendor has the infrastructure, it takes less time (a vendor can have you up and running in 90 to 120 days, while it might take you years to do it yourself), and you can get guaranteed cost savings.

"Many health plans are still building disease management programs, but there is a shift in people starting to see the wisdom that there might be enough high-quality vendors out there that they would be better off buying," says Harry Leider, MD, MBA, corporate medical director and vice president of health services for Kansas City, MO-based HealthNet. "People who have traditionally built are starting to ask themselves whether they'd rather spend a year and a half and a lot of money building one or two disease management programs or buy five in that same amount of time."

Al Lewis, executive director of the Newton, MA-based Disease Management Purchasing Consortium, agrees that the trend over time has moved toward buying programs. But he definitely thinks there are cases in which a provider should build. And he thinks it's better to buy the whole package instead of just pieces of it. For example, Lewis would recommend contracting for cancer and not individual cancers or for rare diseases and not just hemophilia. To find out which way you should go, Lewis and Leider suggest asking yourself these questions:

o How many members are affected? If it's under .5%, you should buy. If it's over 1% to 2%, build it. You might do your own maternal health program because 2% of your under-65 members are going to get pregnant every year, but you outsource your neonatology program because a health plan with 200,000 members is only going to have 200 to 300 premature babies every year.

o How costly is the condition? The more costly it is, the more likely it is that it's difficult to manage and should be left to the experts. You would certainly farm out end-stage renal disease, Lewis says, but peptic ulcer disease you would keep in-house.

o Are you set up to do it? If you have support from top management down and will be given the budget and resources, then build your own because you'll get to take advantage of all the cost savings. But if you're going to have to do it with existing resources, you'd be better off buying.

o Can you get immediate savings? Some diseases, like peptic ulcer disease, won't show immediate savings, so you might want to do those on your own. With congestive heart failure, on the other hand, you'll see savings right away. If you can get that guarantee from a vendor, buy it.

"There are a lot of excellent vendors in most disease categories," Lewis says. "You could spend twice as much and take twice as long to get half as many patients enrolled in your own disease management program as you could if you bought one. It makes sense in a lot of cases to buy, but some health plans think buying is almost like cheating. They think they're not fulfilling their mission if they let another company tell them how to set up a program."

At Aetna U.S. Healthcare, with headquarters in Blue Bell, PA, and Middletown, CT, organizational pride certainly has an impact on the decision to build disease management programs, says Rose Kaufman, RN, a member of the company's core disease management team. "We know there's tons of good stuff out there, but we want to do it and make it ours. We know we can do it."

But Aetna's obvious advantage, she points out, is its size and availability of resources. The company has a performance measurement division that can provide front-end data such as member identification as well as back-end data such as outcomes and comparisons with other plans.

Thomas Morrow, MD, vice president and medical director of One Health Plan of Georgia in Atlanta, which covers about 300,000 people in the Southeast, says most companies are not big enough to build disease management programs that are successful and can hold up over time. Doing it yourself requires people, time, money, and other resources that most companies just can't give up. You also have to develop, warehouse, and mail your educational materials by yourself and come up with a fairly sophisticated data tracking system. "Many companies try to fit disease management into their existing work flow and totally depend on one or two people to set the whole thing up," says Morrow, who has been a National Committee for Quality Assurance surveyor for five years. "Then when that person with all the training leaves, the whole program falls apart."

[For more information, contact:

· Harry Leider, MD, MBA, corporate medical director and vice president of health services, HealthNet, 2300 Main St., Suite 700, Kansas City, MO 64108.

· Al Lewis, executive director, Disease Management Purchasing Consortium, 1037 Chestnut St., Newton, MA 02164. Telephone: (781) 237-7208.

· Robert Stone, executive director, Diabetes Treatment Centers of America, One Burton Hills Blvd., Suite 300, Nashville, TN 37215. Telephone: (615) 665-1133.

· Travis Cook, group director of finance, Stuart Disease Management Services, Little Falls Centre One, Suite 100, 2711 Centerville Road, Wilmington, DE 19808. Telephone: (212) 437-1563.

· Rose Kaufman, RN, Aetna U.S. Healthcare, 1000 Middle St., MC2T, Middletown, CT 06456. Telephone: (860) 636-5178.

· Thomas Morrow, MD, vice president and medical director, One Health Plan of Georgia, 114 Perimeter Center Place, Suite 1010, Atlanta, GA 30346. Telephone: (770) 901-9937.]