Statement of Christobel Selecky, Chair, Government Affairs and Health Policy Committee,
Disease Management Association of America

Chairwoman Johnson and distinguished members of the Subcommittee, it is a pleasure to have the opportunity to provide testimony to the Subcommittee on the strong value of disease management programs to improve quality and control costs under the Medicare Program.  My name is Christobel Selecky and I am a member of the Board of Directors of the Disease Management Association of America (DMAA) and also the Chair of their Government Affairs and Health Policy Committee.  I am also the Chief Executive Officer of LifeMasters Supported SelfCare, a privately held Disease Management Organization (DMO).

Overview.

Comprehensive Disease Management (“DM”) programs have demonstrated their effectiveness in improving health status, health care quality, patient and provider satisfaction, and financial outcomes for populations with congestive heart failure (CHF), diabetes, coronary artery disease (CAD), chronic obstructive pulmonary disease (COPD), end-stage renal disease (ESRD), asthma, obesity, and several other chronic illnesses.  Commercial, Medicare FFS, Medicare+Choice, and some state Medicaid plans have already implemented DM programs and benefited from these clinical and financial outcomes. A majority of large private payors have already launched major disease management programs and have signaled their commitment to DM as the core element of their new medical management strategy.  

The Disease Management Association of America fully supports and commends the Congress and the Centers for Medicare and Medicaid Services (“CMS”) for promoting the expansion of DM programs in its efforts to modernize and revitalize Medicare + Choice, and through the coordinated care, Benefits Improvement and Protection Act (BIPA), and other demonstration projects. 

In order to build on the incremental progress made to date, DMAA strongly urges federal policymakers to offer the benefits of full-service DM programs to all enrollees in:

• The traditional Medicare fee-for-service (“FFS”) program;

• Any new Medicare + Choice programs, such as point of service, PPO, or MSA products; and

• All State Medicaid programs, including FFS and managed care alternatives.

Disease Management and the DMAA.

Disease Management is an approach to patient care that seeks to limit “preventable” events by maximizing patient adherence to prescribed treatments and to health-promoting behaviors.  For patients with chronic diseases, the anticipated benefits of disease management include superior clinical outcomes; improved functional capacity and quality of life; lower health care costs; reduced need for hospitalization, surgery or other invasive care; and greater access to care support service. 

The Disease Management Association of America (DMAA) is the only association in America dedicated exclusively to the DM industry. The DMAA draws members from throughout the United States and has representatives from all segments of the DM industry, including health plans, hospitals, employers, pharmaceutical companies, physicians, and stand-alone DM organizations.   The DMAA seeks to advance the use of DM programs as a means to build a better system of care that will predictably improve quality and reduce costs in private and public sector health care programs.  DMAA also works to promote research, accreditation, education, and the science of DM, and to increase the effectiveness of DM programs.

The DMAA has established an industry-standard definition[1] of qualified disease management programs and entities.  The DMAA definition -- established in consultation with primary care and specialty physicians, and incorporating private practice, health plan and institutional perspectives -- has been relied upon widely by CMS (the definition is cited by CMS in its February 22^nd, 2002 solicitation for proposals to conduct the DM demonstration projects authorized in the BIPA, by DM accreditors (NCQA, URAC and potentially JCAHO) and by payors and providers.

Disease Management Improves Health Status & Quality and Helps Control Costs.

Disease management programs produce significant clinical improvements at the same time that they achieve financial savings. For example, one study published in a peer-reviewed cardiology journal (Am Heart J 1999; 138: 633-640) followed the progress of a population of CHF patients enrolled in a multidisciplinary DM program including patient education, interactive vital sign and symptom monitoring, nurse support and physician intervention.  Clinical impacts measured twelve months after enrollment included an 18 percent reduction in inpatient days, a 36 percent reduction in inpatient admissions, a 31 percent decrease in emergency department visits, and a 20 percent decline in average length of stay.  Patient satisfaction surveys showed a 16 percent improvement.  Financial savings for the group were reflected in a 54% drop in disease specific claims and a 42% average reduction in all claims.  Numerous similar examples of such impressive outcomes are fully described in DMAA’s Medicare and Medicaid “White Paper” (available at www.dmaa.org).

DM has already been proven to be successful in Medicare and Medicaid populations.  In Hawaii, American Healthways, a DMAA member DM company, provided diabetes disease management services to 6,000 Medicare FFS cost contract beneficiaries enrolled in HMSA.  In the first year, the program yielded a 17.2% reduction in total claims savings over the population resulting in a $5 million net savings to CMS. In Florida, LifeMasters has been providing CHF disease management services to approximately 3,000 FFS Medicaid recipients in the northern half of the state for almost two years.  After just one year, total claims costs for this population were reduced by 21% resulting in a $3 million net savings to the state.  In addition to cost savings, quality of care and satisfaction for these populations was significantly improved.

One DMAA member company’s calculations indicate that the difference between annual baseline costs for CHF in the Medicare FFS program and the company’s claims-reconciled costs for patients in a disease management intervention for one year is over $14,000.  Extrapolating savings across the Medicare program using a conservative figure of $11,000 for both the Medicare+Choice and FFS programs, CHF disease management alone could produce total Medicare savings of over $8.3 billion annually.  The FFS program would account for $7 billion, or nearly 85 percent of the total savings opportunity, suggesting the critical need for testing the expansion of disease management to this segment of Medicare.

DM programs also improve access to care.  Sophisticated information technology is used to both identify and enroll all persons with a given health condition.  This proactive outreach process helps to include individuals who are otherwise isolated from the health care system.   And many programs run by DMAA members are administered on a multi-lingual basis in languages such as Spanish, Cantonese and Mandarin.

DM programs can also play a crucial role in reducing medical errors and improving quality. The recent Institute of Medicine (IOM) reports on medical errors[2] and the deteriorating quality of healthcare in America[3] argue that DM is not only integral to preventing medical errors, but also to protecting and improving overall health care quality, especially for the chronically ill.  As the IOM studies emphasized:

• One of the chief culprits in medical errors is the lack of care management and coordination, resulting from the decentralized and fragmented nature of the health care delivery system, and the multitude of unaffiliated providers practicing in different settings without access to complete medical record information or coordination (such as can be provided by DM organizations).

• More than 100 million Americans have at least one chronic illness.  “Clinicians, health care organizations, and purchasers . . . should focus on improving care for common, chronic conditions such as heart disease, diabetes, and asthma that are now the leading causes of illness in the United States and consume a substantial portion of health care resources. These ailments typically require care involving a variety of clinicians and health care settings, over extended periods of time . . . who work so independently from one another that they frequently provide care without the benefit of complete information about patients' conditions, medical histories, or treatment received in other settings.”

Disease Management is Needed "Inside" Medicare and Medicaid.

Diseases such as arthritis, asthma, cancer, chronic obstructive pulmonary disease, CHF, depression, and diabetes account for 60 percent of medical costs in the United States.  Cardiovascular disease is the leading cause of death among both men and women and across all racial and ethnic groups.  About 58 million Americans live with some form of the disease.  In 1999 alone, cardiovascular disease cost the nation an estimated $287 billion in health care expenditures and lost productivity, and this burden is growing as the population ages.  In the Medicare population, a 1993 chronic care demonstration proposal indicated that roughly 10 percent of the Medicare beneficiaries accounted for 70 percent of the $129.4 billion in total Medicare expenditures.  The majority of these 10 percent suffered from chronic illnesses.  Medicare has recognized that an acute care system is no longer appropriate where the major morbidity, mortality and cost drivers of our era are chronic conditions.  However, Medicare and Medicaid have thus far lacked the legislative and regulatory authority to implement demonstrations on a wide scale to provide fair access to all beneficiaries.

DMAA believes that comprehensive DM, if fully employed in Medicare and Medicaid, can:

• Improve the safety and quality of care by adhering to evidence-based treatment guidelines and outcomes data, and by providing patients with a safety net between physician and hospital visits, thereby reducing drug and treatment errors and improving care coordination (identified by the Institutes of Medicine as the two principal problems with the America health care system)

• Improve access to care by around the clock nursing and high-tech contacts, and by assisting rural caregivers and their patients who do not have the benefit of easy entrée to in-person care 

• Improve patient self-management of, and responsibility for, preventing and treating their conditions by its innovations in patient-centered and collaborative education

• Improve financial cost containment without sacrificing quality or patient satisfaction by serving as an alternative to the increasingly unacceptable cost-containment techniques of managed care, such as utilization review, gatekeeper restrictions, referral limitations, and drug restrictions

• Enhance efforts in the Public Health arena by providing health improvement programs on a population basis; creating financial incentives to promote and deliver preventive interventions on a large scale using advanced outreach technologies, especially secondary preventive measures; and encouraging those segments of the private sector that have not yet embraced DM to do so.

DM should be implemented in Medicare FFS, Medicare + Choice, and Medicaid according to the following principles endorsed by the DMAA:

• There should be no discrimination against FFS enrollees, who currently lack any access to the benefits of DM programs available to Medicare + Choice and certain Medicaid enrollees (or have lost access to these programs as a result of the loss of their Medicare + Choice coverage). 

• Medicare and Medicaid FFS programs should directly contract with DM organizations to offer such benefits on a population basis.  Further, DM programs and demonstration projects sponsored by CMS should reflect models of DM which have been successfully utilized in the commercial sector.  Specifically, these programs should not require that DM be linked with the provision of a drug benefit which is not a standard offering of DM providers.

• Medicare and Medicaid managed care programs should provide financial and other incentives to private health plans and public managed care programs and their enrollees to join HMOs, PPOs, MSAs, point of service plans, and other alternatives to traditional FFS.

• DM programs should be compensated for their services on an equitable and competitive basis that compensates them for their investments, provides them with incentives to maximize both clinical and financial outcomes.  Historically fees paid to DM organizations are a fraction of the savings generated for their payor customers.

As the only association in America dedicated exclusively to the DM industry, we would like to offer the services and expertise of DMAA’s staff and member organizations to serve as a resource to the Subcommittee as you explore the various ways in which Disease Management can improve the delivery of healthcare in the United States.

Thank you for the opportunity to provide these views to the Subcommittee. 

* * *

The Disease Management Association of America, a non-profit, voluntary membership organization, founded in March of 1999, is the only industry organization dedicated to advancing disease management.  DMAA’s members represent disease management organizations, health plans, employers, pharmaceutical companies and benefits managers, hospitals, physicians, and other stakeholders in the disease management community.

[1] Disease management is a multidisciplinary, systematic approach to health care delivery that: (1) includes all members of a chronic disease population; (2) supports the physician-patient relationship and plan of care; (3) optimizes patient care through prevention, proactive, protocols/ interventions based on professional consensus, demonstrated clinical best practices, or evidence-based interventions; and patient self-management; and (4) continuously evaluates health status and measures outcomes with the goal of improving overall health, thereby enhancing quality of life and lowering the cost of care. Qualified Disease Management programs should contain the following components:

• Population Identification processes;

• Evidence-based practice guidelines;

• Collaborative practice models that include physician and support-service providers;

• Risk identification and matching of interventions with need;

• Patient self-management education (which may include primary prevention, behavior modification programs, support groups, and compliance/surveillance);

• Process and outcomes measurement, evaluation, and management;

• Routine reporting/ feedback loops (which may include communication with patient, physician, health plan and ancillary providers, in addition to practice profiling); and

• Appropriate use of information technology (which may include specialized software, data registries, automated decision support tools, and call-back systems).

[2] To Err is Human: Building a Safer Health System, Linda T. Kohn, Janet M. Corrigan, and Molla S. Donaldson, Eds., Committee on Quality of Health Care in America, Institute of Medicine, National Academy Press, Washington, D.C. (1999). <http://books.nap.edu/books/0309068371/html/R1.html#pagetop>

[3]  Crossing the Quality Chasm: A New Health System for the 21^st Century, Committee on Quality of Health Care in America, Institute of Medicine, National Academy Press, Washington, D.C. (2001). <http://www.nap.edu/books/0309072808/html/>