DM program lowers costs and improves health

Program uses expert vendors for DM

When PacifiCare Health Systems Inc. decided to expand its disease management programs, the Cypress, CA-based insurer looked at all the options and decided to contract with vendors who were experts in their field rather than developing the comprehensive programs in-house.

"Our philosophy is that if there is significant specialization required for a particular type of program, we prefer to outsource it. Building a really good program takes a long time and a lot of money, and that has to be factored into the decision," says Kathy Cartelli, director of disease management.

Their philosophy must work. The Disease Management Association of America awarded PacifiCare its prestigious Excellence Award for demonstrating favorable health outcomes and improved quality of life for its Medicare + Choice members with congestive heart failure, coronary artery disease/stroke, and chronic obstructive pulmonary disease.

The company has been awarded a demonstration project from the Centers for Medicare & Medicaid Services (CMS) to provide specialized disease management services and comprehensive drug coverage for 15,000 chronically ill Medicare fee-for-service beneficiaries in California and Arizona who have congestive heart failure.

The insurer has seen significant improvement in health outcomes for members who participate in disease management programs as well as substantial cost savings, according to Gordon Norman, MD, PacifiCare’s vice president of disease management.

"We designed our disease management programs to help improve clinical results, better treat diseases, and help alleviate our members’ pain and suffering with an overall goal of enhancing the care and quality of our members’ lives," he says.

PacifiCare launched its first disease management programs in the mid-1990s. "In 2000, we began to take a different approach, spurred by changes in how we contract with network physicians. We were starting to move away from capitation and to bear the risk for health care costs ourselves and were looking for additional strategies to control health care costs and still provide high-quality care for our members," Cartelli says.

After looking at a lot of options, including creating the programs in-house, PacifiCare selected a number of disease management vendors who specialized in managing particular chronic diseases.

"We didn’t go to one company that offers 30 programs. Instead, we decided to take a look at individual diseases and choose the best interventions for each one," Cartelli says.

Initial programs

The company currently has contracts with seven different vendors.

PacifiCare Health Systems started its disease management initiatives with four Medicare + Choice populations with which they have the biggest opportunities for improvement. Their initial programs, rolled out in late 2000 and 2001, were for congestive heart failure, coronary artery disease, stroke, chronic obstructive pulmonary disease, and end-stage renal disease.

The company chose vendors who offered services in each of the states where it provides coverage so the programs in each state will be the same.

By the end of 2003, PacifiCare added a cancer program, a neonatal intensive care program, and an orthopedic case management program.

Cartelli attributes the success of PacifiCare’s disease management programs to making sure the members who will benefit are identified and enrolled, educating primary care physicians on the program, and closely monitoring the vendors.

"We are heavily involved in making sure that we get the most out of our programs. We carefully track clinical outcomes and work with the vendors to develop strategies for program improvement," she says.

When PacifiCare analyzes program outcomes, the company looks at the total population of people eligible for the program, rather than just those who are participating.

"We don’t want them just picking off the low-hanging fruit. We want to make sure that they picked the right people for interventions. If you measure disease-specific costs and all costs, you can really see if there is an impact," she says.

Identifying members

The company encourages the vendors to focus on enrolling members, particularly in some programs.

It’s easy to find and enroll members with end-stage renal disease because they are in a dialysis center three days a week, Cartelli points out.

"In comparison, asking someone with congestive heart failure to put a scale in their home and monitor their weight is more difficult. Our enrollment rates vary with populations," she adds.

If Cartelli doesn’t feel as though a vendor is enrolling enough people in a particular program, she works with it to develop strategies to address the problem.

Members who are eligible for the program are identified from pharmacy data, hospital and physician claims data, and other authorizations. Referrals come from the concurrent review staff, physicians in the PacifiCare network, and case managers.

"The entire organization works to help make these programs work by early identification of potential enrollees. We look at claims data every month and identify people who potentially have the various chronic conditions and who may benefit from our program. We work with the disease management vendors to provide outreach for the members," Cartelli says.

The disease management vendors are responsible for contacting the members, confirming that they are eligible for the program, and enrolling them.

PacifiCare monitors the data to determine the outcomes and the success of the programs.

"We’ve been successful because of our constant oversight of the process and because we are always working with the vendors to see where improvements can be made," Cartelli says.

Each month, Cartelli examines the data PacifiCare gets from vendors, looking at how the disease management programs are progressing in each market and what benchmarks are or are not being reached.

"We track utilization during the contract period and compare it to utilization during the baseline period, making adjustments for unit cost changes. We want to make sure we are really judging the impact of the program and want to account for the possibility that more or fewer members are involved," Cartelli says.

Two strategies

All of the vendors must follow clinical guidelines adapted from nationally recommended guidelines.

"Before we sign a contract, we look at any guidelines the vendor is using to make sure they fit with our guidelines. If they make any changes in the program, we make sure they still fit with national guidelines," she says. PacifiCare has developed two strategies for improving enrollment:

  • Members who are identified as eligible for the program receive a letter describing the program and notifying them that someone will be calling them in a few days.

    "We’ve found this works better than a phone call out of the blue," she says.

  • The company also works to educate physicians about the disease management programs, a task that often takes several contacts before it’s effective.

    "A lot of seniors say they want to talk to their doctor. If the doctor isn’t familiar with the program, the likelihood of getting them to enroll is slim," Cartelli says.

    "Physicians are so busy that one letter or phone call isn’t effective. We use letters, fax campaigns, job aids, and personal meetings to inform them about our programs and the patients that can benefit from them," Cartelli says.

Workflow systems

The company works with the vendors to decide how often members should be contacted. Those in the high-risk groups usually get a telephone call or a visit once a week. "We make sure they’re doing what they should be doing and if not, we look for the barriers to compliance," she says.

PacifiCare has worked with the vendors over time to integrate their disease management programs with the company’s case management department.

At PacifiCare Health Systems, members who have multiple comorbidities or psychosocial issues are referred for case management.

PacifiCare has set up a workflow system that moves patients smoothly from the vendor-based disease management programs to the company’s in-house case management program.

"Typically, someone will progress in a disease to a state where disease management can’t help them. They need more coordination of care and interventions that do more than focus on a particular disease. At this point, the disease management vendor closes the case and refers the member to our in-house case management staff," Cartelli says.

Sometimes, members are referred to in-house case managers for short-term help. For example, if a member in a disease management program has experienced the death of a close family member, the disease management nurse may refer him or her to a case manager who can help with community resources such as grief counseling.

"They talk to each other and make the decision on the best way to handle the situation for each individual member. The case managers and the disease management nurses work closely when members need a lot of care," she says.

PacifiCare Health Systems is in the process of recruiting participants for the three-year Medicare demonstration project that is aimed at decreasing the number of acute hospital stays and improving outcomes and quality of life.

CMS requires the project to be budget neutral, meaning that the money spent on disease management and the savings will cover prescription drugs, Cartelli reports.