To control expenditures more effectively, insurers and health plans are assessing the costs and benefits of new medical technologies and disease management (DM) programs, which promise to provide quality preventive care for high-cost patients with chronic illnesses. A main thrust is to expand DM activities for Medicare through several pilot programs, including the larger number of seniors with traditional Medicare fee-for-service coverage.

One problem is that DM aims to reduce doctors' office visits and hospitalizations-services that fee-for-service Medicare covers more readily than preventive care-and a lack of prescription drug claims data for most Medicare patients makes it difficult to identify DM candidates. On the plus side, DM is most suitable for Medicare, which provides care to patients for many years.

Despite frequent plan switching, MCOs see a clear payoff from DM programs. A recent survey of DM activities at 10 health plans reports fewer hospital admissions and emergency room visits and lower overall costs for treating patients with asthma, congestive heart failure, lower back pain, and diabetes; the biggest savings come from programs that manage care for patients with multiple chronic conditions. Anthem Blue Cross Blue Shield finds that care management of the 5% of its members who account for 53% of medical costs can reduce member expenditures and improve clinical outcomes. McKesson Health Solutions similarly reports significant cuts in hospitalizations for children in its asthma DM program.

The key to DM is selecting the right patient population for special interventions, said Aetna chairman Dr. Jack Rowe at a Capitol Hill briefing last month sponsored by the American Association of Health Plans/Health Insurance Association of America. Not all diabetics benefit equally from DM, and the danger of expanding Medicare DM programs, he said, is that seniors might demand the extra services as an entitlement, leading to overextended programs and high costs.

Better analysis

The need to better control healthcare spending also is stimulating efforts to analyze the value of new medical technologies and prescription drugs. A study sponsored by the Blue Cross and Blue Shield Assn. shows that some new technologies and treatments add millions to annual healthcare costs without providing comparable benefits (see Newswire, pg. XX). A group of experts seeks to improve comparative effectiveness data on new drugs by assembling all the major stockholders-pharmaceutical companies, health plans and insurers, large employers, government health agencies and the Food and Drug Administration. The plan is to meet early next year to map out standards for cost-effectiveness research that can improve healthcare coverage decision making.

Hard choices

Greater use of evidence-based practice guidelines and institutionalized technology assessment are needed to curb healthcare spending if the U.S. expects to expand health coverage to the millions of uninsured, according to economists at the Center for Studying Health System Change (HSC). "If we are to cover everyone, we cannot cover everything," say HSC President Paul Ginsburg and Vice President Len Nichols. The authors are not afraid to use the "R" word-rationing-in pointing out the need for a clinically based form of rationing to avoid pricing healthcare out of the reach of more people.

Maybe next year

Mental health parity advocates are hoping that a more modest coverage mandate proposal will gain Congressional approval next year. Several key senators back legislation requiring insurers and plans to offer equal coverage for mental and medical benefits. These supporters have agreed to narrow the list of mental disorders subject to coverage parity, and Senate leaders have promised to consider the legislation early in 2004.