By Mark Lutes
There is now widespread agreement that a small percentage of patients drive a disproportionate amount of potentially avoidable healthcare costs. This is the case in all populations, commercial as well as Medicare and Medicaid, which means self-funded employers have a tremendous amount at stake relative to addressing these chronic cases – lower back pain, depression, diabetes and congestive heart failure, to name a few on most employers’ list.
Given the sums at stake, one would expect that self-funded employers who bear these costs would have latched onto a range of solutions for managing the care of these “frequent flyers.” The current toolbox tends to rely on wellness programs and perhaps telephonic disease management (DM). Among the employers with whom I speak, neither approach is being credited with much success. So why are additional methods not being tested?
Perhaps the current buying pattern is in part to blame. These self-funded plans seek total workforce/national solutions from their administrative services only (ASO) vendors, while chronic care management demands a more localized approach. Care management of chronics demands more than telephonic engagement. It often requires multidisciplinary local teams built around physicians actually treating the patient, prescribing the meds and following the symptoms.
Unless self-funded plans demand more, they are not likely to get what I describe. Building local care management solutions requires, at a minimum, out-of-the-box provider arrangements. The typical ASO vendor is oriented historically toward claims payment, not care management, and works on a volume, lower-margin basis. This third party administrator (TPA) orientation is not the one that will create care management solutions that can save costs on chronic care.
There is, however, another alternative. In many jurisdictions, hospital systems employ a range of physicians who can lead disease-state specific care management teams. Those same hospital systems are at least considering investing in care management resources (nurse case managers, social workers, etc.) in response to the Centers for Medicare and Medicaid Services’ value-based purchasing initiatives. Perhaps self-funded plans should at least divert the money being spent on ineffective telephonic disease management to seed hospital system development of these programs.
In many instances, the barrier is lack of volume in the various chronic categories. However, that can be overcome by “group purchasing”— employer coalitions or otherwise. In other instances, there is simply a lack of C-suite time and attention.
Some of the conversation can be started by customer-focused health systems designing offerings that address these high cost populations. However, the fiduciaries of the self-funded plans ultimately need to educate themselves as to the feasibility of innovative purchasing and contracting. If the plan assets are not being optimally managed through the current array of ASO services – telephonic DM included – then it is incumbent on the plan fiduciaries to consider other options.
When they do, if they look down the street to the local health system, they may well find a partner able to create a care management system that more effectively manages these chronic conditions. The overall benefit design or TPA arrangement need not be abandoned. But they do need to be tweaked to accommodate new arrangements for provider-based management of chronic conditions.
Mark E. Lutes is a partner in the Health Care and Life Sciences practice of the Epstein Becker Green law firm. He is based in Washington, D.C. mlutes@ebglaw.com.
