Opening Statement of Hon. Nancy L. Johnson, a Representative in
Congress from the State of Connecticut, and Chairman, Subcommittee on Health

Hearing on Promoting Disease Management in Medicare

April 16, 2002

Good morning.  Today’s hearing will focus on the important subject of disease management and its application to the Medicare program.  Disease management has significant potential to improve health outcomes and the quality of patients’ lives, and may reduce health costs.

A small number of Medicare beneficiaries – 12 percent -- accounted for 75 percent of all Medicare fee-for-service payments.  Typically, these beneficiaries suffer from chronic illnesses, such as diabetes, asthma or coronary heart disease.  In many cases, these high costs are from repeated hospitalizations as a result of poor medication compliance, lack of adherence to a prescribed treatment plan, and lack of patient self-management skills. 

In addition, there are also provider related problems, such as poor communication and coordination between providers, and inadequate and fragmented monitoring of patients that undermines patient care. 

As the baby boom generation retires, the number of chronically ill beneficiaries is expected to increase, causing Medicare costs to escalate.  Disease management programs - programs designed to assist both the physician and patient to develop a plan of care, using evidence-based practice guidelines – should help defray some of these costs and improve health care outcomes.    

While there have been some attempts by providers to implement disease management programs in fee-for-service, health care for beneficiaries with chronic illness is typically fragmented and poorly coordinated.  These shortcomings are due to multiple health care providers and multiple sites of care. 

Conversely, many managed care entities have developed a wide array of cost-control programs that combine adherence to evidence-based medical practices with better coordination of care across providers.   Medicare+Choice plans have found preventative care and case management saves money and avoids costly hospital stays.  According to the 2000 Survey of Disease Management Practices, the average Medicare+Choice plan has four disease management programs, with 95 percent of plans having a diabetes disease management program. 

Netcare, a diabetes management program comprised of 7,000 diabetics in 7 managed care organizations actually decreased hospital admissions by 18 percent – resulting in 12 percent savings. 

There has been some movement towards implementing disease management program in fee-for-service.  A Coordinated Care Demonstration authorized by the Balanced Budget Act resulted in approval of 15 programs.  In addition, on February 22, of this year, CMS issued a request for proposal to conduct demonstration disease management programs in targeted specifically towards congestive heart failure, diabetes and coronary heart disease.  The demonstration projects will operate for up to three years, after which a formal evaluation will be conducted by CMS. 

These proposals hold the hope that we can achieve the twin goals of improving care and saving money – long recognized as a central tenet of managed care.

We are pleased to welcome Ruben King-Shaw from the Centers for Medicare and Medicaid Services who will comment on these exciting new opportunities.

I would like to welcome our other experts.  Dr. Wennberg from  Dartmouth College will discuss regional variation in quality of care.  Dr. Hillman from Marshfield Clinic will explore their exciting work in incorporating disease management in fee-for-service.  Dr. Henschke from Cornell University will present her first hand efforts in managing lung cancer.  Dr. Lord, from Humana and the President of the Disease Management Association of America will discuss Humana’s work in Medicare+Choice.  Finally, Dr. Anderson of Johns Hopkins University will discuss his work in this field.  I look forward to your testimony.