The Emerging Challenge of Chronic Care

1. The Emerging Challenge of Chronic Care Robert A. Berenson, M.D. Senior Fellow, The Urban Institute 27 September, 2007

2. Chronic Condition • An illness, functional limitation or cognitive impairment that lasts (or is expected to last) at least one year • Limits what a person can do • Requires ongoing care Source: National Academy of Social Insurance, “Medicare in the 21st Century: Building a Better Chronic Care System,” January 2003.

3. Projected Total Number of PeopleWith Chronic Conditions (in millions) Sources: Partnership for Solutions. “Multiple Chronic Conditions: Complications in Care and Treatment”; RAND Corporation, 2000.

4. Chronic Conditions by Age Group Source: Partnership for Solutions. “Disease Management and Multiple Chronic Conditions”; Agency for Healthcare Research and Quality, MEPS, 1998.

5. Chronic Condition Prevalence By Race (Total Population) Source: Hwang, W., et al., “Out-of-Pocket Medical Spending for Care of Chronic Conditions,” Health Affairs, December 2001.

6. Proportion of Adults 50+ with Chronic Conditions, by Race Source: “Cultural Competence in Health Care,” Center on an Aging Society, Georgetown University. No. 5, February 2004.; K. Collins, et al., “Diverse Communities, Common Concerns; Assessing Health Care Quality for Minority Americans,” New York: The Commonwealth Fund, 2002.

7. Chronic Conditions for Children Source: G. Anderson, “Hospitals and Chronic Care”, PowerPoint Presentation to the American Hospital Association. Partnership for Solutions. 16 June 2004.

8. Chronic Conditions for Adults Source: G. Anderson, “Hospitals and Chronic Care”, PowerPoint Presentation to the American Hospital Association. Partnership for Solutions. 16 June 2004.

9. Chronic Conditions in Seniors Source: G. Anderson, “Hospitals and Chronic Care”, PowerPoint Presentation to the American Hospital Association. Partnership for Solutions. 16 June 2004.

10. Multiple Chronic Conditions and Medical Service Usage Source: G. Anderson, “Hospitals and Chronic Care”, PowerPoint Presentation to the American Hospital Association. Partnership for Solutions. 16 June 2004.; MEPS 2000.

11. Hospitalizations by Number of Chronic Conditions Source: G. Anderson, “Hospitals and Chronic Care”, PowerPoint Presentation to the American Hospital Association. Partnership for Solutions. 16 June 2004.; MEPS 2000.

12. Hospitalizations for Ambulatory Care Sensitive Conditions Sources: Partnership for Solutions. “Multiple Chronic Conditions: Complications in Care and Treatment,” May 2002; Medicare Standard Analytic File, 1999.

13. Activity Limitations by Number of Chronic Conditions Source: G. Anderson, “Hospitals and Chronic Care”, PowerPoint Presentation to the American Hospital Association. Partnership for Solutions. 16 June 2004.

14. Annual Prescriptions by Number of Chronic Conditions 49.2 33.3 24.1 17.9 10.4 3.7 *Includes Refills Sources: Partnership for Solutions, “Multiple Chronic Conditions: Complications in Care and Treatment,” May 2002; MEPS, 1996.

15. Utilization of Physician Services by Number of Chronic Conditions Sources: R. Berenson and J. Horvath, “The Clinical Characteristics of Medicare Beneficiaries and Implications for Medicare Reform,” prepared for the Partnership for Solutions, March, 2002; Medicare SAF 1999.

16. Breakdown of Total Health Care Spending 78% Health Care Spending for People with Chronic Conditions 22% Health Care Spending for People without Chronic Conditions Sources: Partnership For Solutions, “Chronic Conditions: Making the Case for Ongoing Care,” December 2002; MEPS, 1998.

17. Health Care Spending by Number of Chronic Conditions Sources: Partnership For Solutions. “Disease Management and Multiple Chronic Conditions”; Agency for Healthcare Research and Quality, MEPS 1998.

18. Medicare Spending Related to Chronic Conditions Source: Partnership for Solutions, “Medicare: Cost and Prevalence of Chronic Conditions,” July 2002; Medicare Standard Analytic File, 1999.

19. Medicare Spending on Beneficiaries with Chronic Conditions Source: G. Anderson, “Hospitals and Chronic Care”, PowerPoint Presentation to the American Hospital Association. Partnership for Solutions. 16 June 2004.

20. Growth of Medicaid Spending Sources: J. Crowley and R. Elias. “Medicaid’s Role for People with Disabilities,” The Kaiser Commission on Medicaid and the Uninsured, August 2003; Urban Institute estimated based on HCFA-2082 and HCFA-64 Reports.

21. Projected Total Medicaid Spending Per Enrollee Note: Includes federal and state spending on benefits. Sources: J. Crowley and R. Elias. “Medicaid’s Role for People with Disabilities,” The Kaiser Commission on Medicaid and the Uninsured, August 2003; KCMU analysis based on CBO baseline for Jan. 02.

22. Private Health Insurance Spending on Individuals with Chronic Conditions Source: G. Anderson, “Hospitals and Chronic Care”, PowerPoint Presentation to the American Hospital Association. Partnership for Solutions. 16 June 2004.; MEPS 2000.

23. Been told about a possibly harmful drug interaction Sent for duplicate tests or procedures Received different diagnoses from different clinicians Received contradictory medical information Sometimesor often 54% 54% 52% 45% Incidents in the Past 12 Months Among persons with serious chronic conditions, how often has the following happened in the past 12 months?

24. Barriers to Improvement

25. Barriers to Implementing Change in Most of Medicare • The nature of medical education and the resultant professional culture and orientation of clinical practices • Traditional Medicare is based in traditional indemnity insurance • Major benefit limitations and restrictions in the Medicare statute

26. Professional Issues • Hard to influence by public policy • Based on an orientation to identifying and caring for acute illnesses and injuries, not chronic conditions • “find it and fix it” • solve, rather than manage problems • “the tyranny of the urgent” • Failure to find the unusual and the life-threatening is worse than overlooking the common and considering quality of life

27. Professional Issues (cont.) • Oriented to those who present for care, rather than to populations who inhabit their chronic conditions • Little division of labor – M.D. as captain of the ship • Underuse of information management and decision support tools • Resistance to change, even in the face of demonstrable failures

28. Specific Structural and Organizational Deficiencies • Residency training takes place in hospitals • Shortage of geriatricians • Guidelines (even when followed) usually ignore co-morbidities – may conflict or produce overwhelming compliance burden • Disease management and primary/principal care are not well coordinated • Lack of integrated care orientation (also fostered by siloed payment systems)

29. Medicare Statute Based on Indemnity Insurance of the ’60s • Kenneth Arrow in 1963: for people with chronic illness, “insurance in the strict sense is probably pointless.” • Why? Moral hazard • Yet, 80% of beneficiaries have one or more chronic condition and 20% have 5 or more and account for two-thirds of program spending

30. Example of the Problem: Should Medicare Pay for E-mails? • Why not phone calls, while you’re asking? • In a fee-for-service payment system, there are a number of concerns: • Relatively high transaction costs relative to the value of the underlying service • Substantial program integrity concerns • “Nuclear force” moral hazard

31. Problems in How Traditional Medicare Pays for MD Services • Many Medicare payment systems have evolved from FFS to prepayment for episodes of care – physician payments is the main exception • Physician payment is for discrete, narrowly defined services or transactions • Partly fails to account for complexity • Pays based on resources expended, whether serve a useful purpose or not • And doesn’t pay differently for quality

32. Medicare Benefits Need to Be Improved and Upgraded • Now, reasonable coverage for prescription drugs (although still 4 million not in) • Sensory loss support devices not covered (eyeglasses, hearing aids) • DME and home health limitations, e.g., the “homebound” definition • Program interpretation that rehabilitation services require prognosis of improvement, and not maintenance or slowed deterioration

33. Various Models of Enhanced Chronic Care Management

34. Disease Management • I use the term to refer to third parties attempt to influence patients directly, bypassing physicians • Relies on predictive modeling, decision-support software, and remote monitoring devises to complement core nurse-patient communication, which focuses on patient self-management (diabetes) and early detection of clinical deterioration (CHF)

35. Case Management • Targeted to a subset of patients who are typically the most complex – with a combination of health, functional, and social problems • Approach is more customized to needs of particular patients • Relies mostly on telephonic interventions

36. The Wagner Chronic Care Model • Pioneered by Wagner and associates at Group Health Cooperative of Puget Sound and The MacColl Institute • Offers a multidimensional approach to a complex problem • Identifies 6 essential elements: community resources, health care organization, self-management support, delivery system redesign, decision support, clinical information systems

37. Delivery System Redesign • Specialized assessment tools to identify patients at risk • Multi-professional team responsibility and delineation of roles • Active promotion of patient self-management • Proactive follow-up/communication, outside of the anachronistic office visit

38. Chronic Care Strategies That Bypass Physicians Make No Sense • From 30 years of Medicare demos -- approaches that are supplemental to the patient/physician relationship have had little impact – the MMA disease management demo seems to be failing; in commercial and Medicaid settings D.M. may have some, but limited, usefulness. • In contrast, CMS just announced modest positive results from the Medicare physician group practice demo, which incentivizes, rather than bypasses, practices – mostly, but not only, large groups

39. Challenging the Status Quo in Chronic Disease Care: Seven Case Studies Robert A. Berenson, M.D. September, 2006 Available on California Health Care Foundation website

40. Seven Case Studies • Sutter Health Sacramento Sierra Region • Park Nicollet Health Services • Integrated Resources for Middlesex Area (Ct.) • Billings Clinic • Care Level Management • Washington Hospital Center Medical House Call • MDxL

41. Case Study Finding 1 • Physicians and hospitals can do much more to manage patients with chronic conditions • Physicians and hospitals do not think third-party disease and case management has worked because of the absence of physician engagement

42. Finding 2 • Viable models of chronic care management fall between the Chronic Care Model and third-party approaches • Case study sites do not attempt to redesign traditional practice of frontline primary care physicians

43. Finding 3 • Although third-part D.M. remains the dominant framework for chonic care improvement, some health plans also support innovative approaches that more closely relate to patients’ regular sources of care

44. Finding 4 • Provider-based programs carefully distinguish among patients based on their specific clinical conditions and other assessments • Differentiators include: whether patient home-bound, have limitations in activities of daily living, and specific conditions, e.g. CHF vs. diabetes vs others

45. Finding 5 • Approaches to case management for medically complex patients vary more than do disease management programs for patients with one or more specific chronic conditions • For the former, programs rely more on point of care decision-making by clinicians

46. Finding 6 • Capitation is more compatible with chronic care programs and their populations than fee-for-service reimbursement • Capitation provides greater flexibility and organizations can benefit from reduced expenditures • The Medicare “shared savings” approach used in the PGP demo also may be a practical approach

47. Finding 7 • Current Medicare payment rules greatly influence the configuration of chronic care programs, e.g., how to get reimbursed for diabetes education or the “incident to” rules.

48. Finding 8 • The negative business case for hospitals to support chronic care management does limit the robustness of programs • However, in some circumstances, there are offsets to the negative ROI

49. Finding 9 • Communications, monitoring, and data-sharing technologies enhance chronic care programs but, state-of-the-art, “high tech” technologies are not essentail. • EMRs, disease registries, PDAs, yes • Sophisticated telemonitoring devices, not really

50. Some Final Thoughts on Physician Payments to Support All of This