Disease Management – Better Outcomes and Reduced Care Costs

 

The current economic environment demands businesses carefully justify every budgetary item. Predictably this has brought health care expenses under even greater scrutiny than usual. Companies are faced with difficult decisions on how to best limit health care costs for themselves and their employees while still ensuring access to quality coverage resources. As a result companies are willing to look at alternative and innovative ways to control healthcare expenses.

One way that companies have embraced innovation is through the adoption of programs aimed at keeping employees healthy and programs to help employees manage chronic disease.  These programs focus on assessing the level of the individual’s health, setting health goals based on that assessment and then helping them adopt and maintain healthy behaviors to reach those goals. The belief is that a healthier workforce is less likely to become sick or develop chronic diseases such as heart disease or diabetes and thus lower the cost of coverage. While at present there is limited documentation of the amount being saved, the logic is clear.

These programs are developed to help individuals improve their overall health, achieve a healthy lifestyle and avoid chronic illness Employers also face the challenge of what to do about employees who are already suffering from chronic illnesses. Statistics show that this may be a growing challenge. Social & Scientific Systems Inc.¹ conducted a study based on data collected by the Department of Health and Human Services Medical Expenditure Panel Survey². This study showed that individuals with chronic disease (such as cancer, high blood pressure, high cholesterol, diabetes and others) grew from 41% in 1996 to 44% in 2005. What may be more alarming is the number of people suffering from more than one chronic illness grew from 7% to 13%. When applied to a company with just a handful of employees it is clear a number of them may have or will have a chronic illness of some kind and some may have more than one.  This is an important factor because chronic disease can have a big economic impact on health care costs for the company.

As an, example diabetes afflicts 20.6 million people aged 20 or older in the United States. In 2002 it cost $132 billion. $92 billion were in medical costs and $40 billion were for lost wages. Employers are bearing the brunt of the cost.  According to an Agency for Health Research and Quality (www.ahrq.gov) study:

• National inpatient hospital costs for diabetes with complications were nearly $3.8 billion in 2001
• Cardiovascular disease is common among adults with diabetes
• Prevalence of lower extremity amputations is high
• Multiple hospitalizations are likely
• Much of the cost for complications are preventable
• With appropriate primary care for diabetes complications, nearly $2.5 billion in hospital costs might have been averted

The study concluded that “hospitalizations for diabetes complications could be prevented with high-quality health care and patient adherence to treatment. Clinical studies suggest that prevention activities, quality outpatient care, and greater patient self-management of diabetes may prevent or reduce the prevalence of cardiovascular disease, lower extremity amputations, and multiple hospitalizations associated with diabetes.”

When you add the cost of other chronic diseases it’s difficult to overstate the impact of chronic illness on healthcare costs. This is where disease management steps in. Disease Management programs are designed to help individuals with chronic disease control their condition, improve their health and become better health care consumers. Like a wellness programs, Disease Management Programs are based on a health assessment and setting achievable goals then working with the individual to reach those goals to improve and maintain their quality of life. This is key to Disease Management because most studies have shown that, depending on the condition, less than half of the people diagnosed with a chronic illness follow their prescribed treatment plan.

A recent program called the Diabetes Ten City Challenge³ indicates what disease management programs can accomplish. Employer groups in ten communities established a voluntary health benefit for employees and dependents with diabetes. Using incentives, employers encourage people to manage their diabetes with the help of pharmacist coaches, physicians, and community health resources.  This collaborative approach resulted in:

• A savings of approximately $918 per employee in total health care costs for the initial year, with an even greater savings in subsequent years.
• Return on Investment (ROI) of at least 4:1 beginning in the second year.
• A 50% reduction in absenteeism and fewer workers’ compensation claims.
• High employee satisfaction – 95% approval for pharmacist care – and improved quality of life.
• Employees saved an average of $400-600 per year on out of pocket expenses with incentives such as waived co-pays.

As an example, the Diabetes Ten City Challenge shows the benefits of embracing disease management to provide better outcomes physically and financially. One important factor employers should consider in implementing a disease management program is choosing a disease management provider that best meets the needs of their employees.  Best results may be attained from a source that can offer multiple programs for a variety of chronic illnesses. Engaging independent vendors which do not provide integrated condition management across the employee’s health care continuum could potentially impede their long term health needs. It’s clear that disease management programs will become an increasingly important part of  health care coverage. An effective disease management program offers employers a way to positively impact healthcare costs for themselves and their employees. For employees, disease management programs offer cost savings, guidance, and encouragement to maintain and hopefully improve their quality of life.

¹www.s-3.com
²www.meps.ahrq.gov/mepsweb/
³www.aphafoundation.org/programs/Diabetes_Ten_City_Challenge/