The Effectiveness of Disease Management Programs in the Medicaid Population E-mail

Robert Freeman, Ph.D., Kristina M. Lybecker, Ph.D., D. Wayne Taylor, Ph.D., F.CIM

Executive Summary

In the midst of rising health care expenditures, increasingly limited health care budgets and economic uncertainty, the efficient use of government funds and other resources is of the utmost importance.  In March 2010, the Patient Protection and Affordable Care Act (ACA) expanded Medicaid, to help reduce the number of uninsured, thus potentially further increasing tremendously the fiscal burden on the states.  According to the Office of the Actuary of the Centers for Medicare and Medicaid Services the states’ Medicaid programs spending is forecast to increase by an annual rate of 8.4% from 2009 to 2019.
Some of the cost increase is due to the inefficiencies inherent in the highly fragmented nature of the delivery of Medicaid between state and private enterprise, between stand-alone and co-ordinated services models, between individual and population health management strategies, and among the 50 states themselves.

As a consequence, policymakers are making difficult decisions regarding program expenditures, available benefits, eligibility requirements and provider payments.  Although reductions on these fronts may generate costs savings, they also reduce access to care and can exacerbate poor health outcomes.  As an alternative, disease management (DM) programs are seen as one of the few policy options left, facilitating cost containment through improved health outcomes in chronically ill populations.

It is currently estimated that 162 million Americans suffer from chronic disease; half of this population suffers from two or more chronic illnesses.  The most common chronic disease conditions are costing the economy more than $1 trillion annually; just five chronic conditions account for close to half of US healthcare spending and the care of chronic illness consumes approximately 75% of total healthcare expenditures annually.  

The disproportionate burden becomes more obvious in an examination of government  programs.  More than 60% of adult Medicaid enrollees have a chronic or disabling condition; a mere 4% of Medicaid enrollees absorb half of all Medicaid funding.  The cost burdens of these chronic conditions vary by condition and by state.  

Unless significant steps are taken on a population level to modify lifestyle behaviors and other risk factors for chronic disease the future holds much more of the same.  It has been estimated that the rates of growth of the major chronic diseases far outstrip the population growth rate of the US between 2003 and 2023.

The Cameron Institute reviewed and analyzed the available literature from the last decade on disease management programs with an eye to determining their effectiveness in the Medicaid population.  It was challenging to extrapolate the studies’ results to a larger context.

Nevertheless, there were several recurring themes which provide some perspective on the current state of knowledge:

  • The robust results of many studies, across disease types, showed that disease management programs were most cost-effective and improved quality of care when dealing with severely ill enrolees who are at high risk for hospitalization, near-term hospital readmission and for emergency room visits as well as those patients who have co-morbidities.
  • In-person care management - the most costly intervention overall - was found to be the most significant intervention for high-risk patients in terms of achieving overall patient improvement goals and cost savings; less intensive care worked better in lower risk patients.
  • Self-management and monitoring was found to be especially significant.
  • Provider education of patients was found to be effective in increasing medication adherence, vaccination rates and screening.
  • Telephonic care management also was found to be effective.
  • Physician- and pharmacist-led interventions positively influenced prescription medication adherence and attainment of guidelines for lipid and HbA1c levels.

The health benefits from DM most frequently cited included: 

  • Improved prescription adherence;
  • Greater therapeutic successes;
  • Reduced hospitalizations;
  • Fewer hospital readmissions; 
  • Reduced number of emergency room visits;
  • Lifestyle changes;
  • Increased numbers of patients receiving flu shots;
  • Reduced depression; and
  • Utilization of fewer unnecessary drugs.

As clinical outcomes improved, so did savings, although not all studies documented net cost savings or a return on investment (ROI).

  • Net savings reported in two studies conducted during 2002-2005 reported net savings of 9 and 14% respectively.
  • Four 2008 studies reported ROIs of 1.15, 2.20, 2.72 and 32.70 respectively.
  • Disease management programs that decreased hospitalization admissions by as little as 10% covered associated program costs. 

Comparability and generalizability by the authors was prevented by the lack of standardized measurement tools and data.  Not all DM programs have been studied extensively and further research is needed, especially in the area of standardized cost-savings analysis.   However, the strength of the evidence reviewed herein has led the authors to conclude that DM used in the management of chronic disease in the Medicaid population improves health outcomes and saves money.

Download this file (The effectiveness of DMPs in the Medicaid Pop.2011.pdf)The effectiveness of DMPs in the Medicaid Pop[Cameron Institute report]1940 Kb