Fairleigh Dickinson Executive MBA Health Systems Management

1. Fairleigh DickinsonExecutive MBAHealth Systems Management Managed Care and Provider Reimbursement Robert Eidus MD, MBA

2. May 31 • Final Exam (First Hour) • Case Study- Merck- Medco: Ken • Population Based Health Management • Preventive Health Services in Managed Care • Demand Management • Disease Management • Case Management • Case Study- Accordant Health Services- Araceli • Oral Presentations of Project • Wrap Up and Feedback

3. Case Study • Merck-Medco Managed Care: Ken

4. Population Based Health Management • Key Premise • Different populations have different needs/ risks/ health cost exposure • Strategies should be tailored to sup-population needs

5. Population based health management People with complex multisystem illness 25-35% of health care costs People with chronic illnesses 30% of health care costs 35% of health care costs Healthy or asymptomatic and at risk for illness

6. Population based health management People with complex multisystem illness Care management (Catastrophic Case Management People with chronic illnesses Disease Management Preventive Health, Demand Management Healthy or asymptomatic and at risk for illness

7. Preventive Health Services • Why do this if you are in managed care? • Historical Roots (except Medicare) • Societal Expectations • Marketing • Risk Selection • You are graded on this

8. Why not do preventive services? • Time to benefit is greater than member retention • Member turnover can be as high as 35% per year • Cost of management services and cost of testing • Lack of clarity on what preventive services should be promoted

9. Examples of managed care success stories in prevention • Mammography • Pediatric immunizations • Cholesterol Screening • Adult immunizations • Beta blockers after MI (tertiary prevention) • ACE inhibitors in diabetics (secondary prevention) • Colorectal cancer screening • Kaiser • US Healthcare

10. Examples of un-success • Screening for depression • Why?

11. Typical Prevention Interventions • Registries • Reminders • Educational activities • Provider incentives

12. Barriers to effective managed care preventive efforts • Migrating membership • Inaccurate data bases • Lack of point of service effectiveness • Missed opportunities • Physician overload • Lack of systems in providers offices

13. Demand Management • Basic Principle: • 70% of illness is self limited • Much of primary care visits and ER visits are patient initiated; very often due to lack of education/ information • Giving patients information/ advice/ and alternative venues for care can save money

14. Typical conditions which can be managed via demand management • Colds: (avoid a PCP visit) • Asthma, ear infections (avoid an ER visit) • Minor strains/ sprains • Allergies • Urinary tract infections

15. Types of Demand Management Interventions • Algorithmic books and other literature • On-line advice systems • E-health care (future) • Nurse advice lines (advice and triage) • Example: Access Health • After hours clinics and urgent care centers

16. Does Demand Management Work? • Probably- but don’t believe the press you hear • Nurse advice lines are well received by patients, but: • Most patients don’t use them • They are costly • Cost savings may be difficult to calculate, particularly after year one

17. Disease Management • Definition: A systematic attempt to improve health outcomes for patients with chronic illnesses using managed care techniques in the framework of quality improvement • Look at systematic barriers to optimizing outcomes • Design interventions which attack those barriers

18. Barriers to Optimizing Outcomes • Lack of patient education • Lack of patient readiness to change • Lack of physician education • Missed opportunities • Patient adherence • Lifestyle issues • Fragmentation of care • Lack of access • Affordability

19. Disease Management Toolkit • Identify, enroll, and stratify members • Guidelines to physicians • Disease registries to physicians • Reminders to patients • Educational material to patients • Care management for the sickest patients

20. How are DMs Paid? • Administrative Fees • Shared Savings • Capitation

21. Most Common Conditions that have DM Programs • Asthma • High Risk Pregnancy • Diabetes • Congestive Heart Failure

22. Conditions Where There are Few DM Programs • Infertility • Hypertension • Osteoporosis • Arthritis What are the problems with the above programs?

23. Issues with Disease Management • Clear identification of eligible members using administrative data • Measured costs and savings • Regression to the mean • Preloading the baseline • Length of time to achieve cost savings

24. Presentation • Accordant Health Systems • Araceli

25. Care Management • Also called case management or catastrophic case management • Operating assumptions • Sutton’s Law • If I can manage the few cases with big ticket items, then I can ease off the micromanagement of the masses

26. Typical Cases Managed • Transplants • Parenteral Hyperalimentation • HIV/AIDS • Premies • Traumatic Brain Injury • Stroke

27. Care Management Toolkit • Discounted contracting • Home nursing, PT, DME, Rehab., Centers of Excellence • Substitution of benefits • Coordination of care • Guidelines monitoring • Telephonic or on-site support

28. Care Management • The bulk of the services are provided by nurses that work for the health plan or an independent company that contracts with the health plan or employer • Nurses are specially trained • Documentation software

29. Care Management Problems • Although most people believe that Care Management helps patients and save money, it is hard to quantify • Small numbers and large dollars give large amounts of variation • You are basing savings on what would have happened had you not intervened

30. Prospective Care Management-A new paradigm • Basic tenet: • Identify people at risk for high medical expenditures before they get sick • People with chronic illness • Depressed • Social Isolation • Poor self efficacy • Poor decision-making skills

31. Course Summary • Managed Care should be differentiated from HMOs • Managed care started in response to a societal need for access • In the last 25 years, the growth has been fueled by a need to control costs • Managed care will continue to respond in the future to the balancing and changing needs of access, coverage, and cost containment

32. Course Summary • Although it seems to be an ideal situation, the development of integrated delivery systems has been fraught with problems • Within the sphere of cost containment, the general tactics are benefits constriction, cost sharing, transfer of risk, incentives, and utilization management • None of these have worked very well alone- together they have helped to modify the escalation of medical costs • The basic factors that contribute to cost escalation are aging of the population, new technology and consumer demand

33. Course Summary • Managed care has made many contributions to improving quality of health care. There is little evidence that the tactics used to contain cost have adversely impacted quality • Despite public statements to the contrary, employers chose health plans based upon cost, no quality • Population based care management has become increasing popular to prospectively influence outcomes