The prevalence of chronic disease in the U.S. is a significant public health issue. About 133 million people, almost half of all Americans, have at least one chronic health condition – for example, heart disease, asthma, or diabetes. The Centers for Disease Control and Prevention (CDC) estimates that chronic diseases account for 70% of all deaths in the U.S., and the medical care costs of people with chronic diseases account for more than 75% of the nation’s $2 trillion annual medical care costs.
DM began during the 1970s with the concept of prospective medicine. Prospective medicine focuses on health risk appraisal and reduction, i.e., identifying an individual's current and potential health hazards and helping reduce those risks in order to extend life expectancy, improve quality of life, and reduce morbidity and disability. The movement progressed in the 1980s as patients with diabetes were encouraged to engage in self-care activities, or “self-management.” In the 1990s, the term “disease management” was coined to describe a strategy to increase pharmaceutical sales by improving medication adherence. The industry association – formerly the Disease Management Association of America, which renamed itself DMAA: The Care Continuum Alliance – promotes disease management as a tool for evidence-based population health improvement. The goal of disease management is to reduce the costs of care while improving health outcomes. The concept of DM is grounded in the notion that chronic care, self-management of disease, and wellness promotion can reduce costly, acute medical complications. DM programs have been growing in popularity in the commercially insured market, primarily because they are advertised as a way to improve cost effectiveness of care. It is estimated that the annual revenues for the DM industry have grown from $78 million in 1997 to about $1.8 billion in 2008. DM is also being adopted in many Medicaid programs and tested under pilot and demonstration projects for Medicare populations with certain high-cost chronic illnesses like heart disease and diabetes.
Financing arrangements for DM services can affect the level of savings that can potentially be achieved. Two traditional forms of disease management contracts are capitation contracts and case rate contracts (Baldwin, 1999). Capitation contracts involve fixed amount per-member-per-month payments from a health plan to a disease management vendor. Case rate contracts pay fixed amounts per patient treated. Some case rate contract arrangements pay higher reimbursement rates for treating patients with advanced disease or more complications. Another risk sharing approach for DM contracts is the shared savings approach, in which the costs or revenues of the disease management vendor are subject to specific performance targets. For example, the vendor may be required to achieve a 5 percent savings target for all services provided to the enrolled population. The financial risk involved will be affected by the population being served, patient characteristics, complications, and clinical outcomes. If predictive models used by DM vendors overestimate patient utilization needs, this can result in savings if actual service utilization is lower than projected. Such factors including patient characteristics and utilization needs must be taken into account when considering potential savings from DM programs.
Disease management has evolved into a complex and diverse industry offering comprehensive management of common chronic conditions. Some DM vendors have recently been shifting their focus from single-disease programs to an integrated approach that targets all of a patient’s health problems. Many programs have expanded from targeting very high-cost and high-risk patients to addressing the needs of broader populations, with approaches ranging from mass communication technology and call-center based outreach to more intensive approaches such as recurring home visits by nurse case managers. DM can also involve feedback mechanisms for providers such as practice profiling, which is an analytic tool that uses epidemiological methods to compare physician practice patterns and process and clinical outcomes. The goal is to deliver evidence-based, high quality care to improve patient outcomes. The use of DM interventions could be considered an offshoot of the Chronic Care Model originally developed by Ed Wagner, M.D., M.P.H. as a tool to improve the care of individuals with chronic illness (including HIV/AIDS). The Chronic Care Model focuses on six elements: self-management and adherence support, decision support, clinical information systems, delivery system design, organization of health care, and community resources.
Disease management seems an intuitively plausible approach for addressing rising health care costs and the need for improved quality of care in the U.S. However, in spite of the growing use of DM in the commercially insured market, there is no conclusive evidence that DM reduces overall costs, and there is only limited evidence that it can improve quality of care for some conditions. Inherent challenges to measuring the impact of DM include regression to the mean and selection bias. Disease management programs may identify patients after they have incurred significant health care costs, such as a hospitalization, but then utilization of services can return to normal without any intervention. The decrease in utilization might be attributed to regression to the mean or to the DM program. With selection bias, patients who choose to enroll in a DM program may have underlying differences from those who do not enroll. If treatment and utilization costs are lower for DM program enrollees compared to the nonparticipating patients, it is difficult to know for certain how much of the difference is attributable to the DM program intervention. DM evaluations do not always use randomized controlled methodology because of operational issues. For example, an employer that engages a DM vendor to provide services may not wish to use random assignment to determine which employees are targeted for intervention and which are controls. If the employees self-select for participation, then this type of situation is not a randomized controlled trial of the DM intervention, and it introduces bias. Because of limitations such as this, many existing studies using quasi-experimental designs have been criticized for their low rigor methodologies.
As the number of disease management programs has grown over the years, there has been only limited uniformity in programmatic features. Common features of disease-specific programs include an integrated approach to care and patient education through home visits or by telephone. Case management programs are characterized by intensive post-discharge monitoring by a case manager who connects patients to community-based non-medical support services (Krumholz et al., 2006). As DM programs continue to evolve, they may become useful tools in ensuring high quality, patient-centered care.