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CBO on Medicare’s Care Management Demos

By January 24, 2012Commentary

Disease or care management is no longer innovative; it has been tried for a couple of decades now.   Following its initially enthusiastic acceptance by private payers, Medicare conducted a number of demonstrations to determine if the concept might produce substantial savings for the program.  As a number of independent researchers, both those hired by CMS and completely outside the agency, found, the demonstrations were less than a resounding success.  The Congressional Budget Office has now released a working paper which reviews those demonstrations and attempts to draw lessons from them.  (CBO Paper)

There were 34 of these demonstration projects in all, many utilizing private disease management companies, some using hospital systems or large medical practices.  The primary method by which the demos hoped to save money was reducing hospital admissions.  They tended to have similar targeting criteria, looking for chronic disease patients who have relatively high costs.  Most had nurse care managers who interacted with the patients, often by phone.  Some of these nurse care managers had little interaction, however, with the patient’s physicians.  Overall, the programs had no effect on spending or on hospital admissions, although small sample sizes make firm statistical conclusions either way difficult.

There was variance, however, and programs in which nurses were either embedded in a physician practice or interacted significantly with the doctors and programs in which the nurses had substantial in-person contact with patients appeared to have a greater level of success, but even among these programs, few saved money after accounting for the cost of the program.  The results were a great disappointment, both to CMS and to private disease management firms.  Ignored was the fact that some of these programs often improved the overall quality of care.  One problem, which was reflected in a recent AHRQ Statistical Brief, is that few patients, even those with chronic disease, are persistently high cost, which makes finding patients with the greatest potential for future cost reduction hard.


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