Here's one more nail in the coffin of fee-for-service healthcare: a report on the failure of a large disease management pilot program for Medicare patients.

The New England Journal of Medicine this fall published the results of the Medicare Health Support Pilot Program, a disease management program for fee-for-service Medicare patients. The program used eight commercial DM companies to provide nurse-based telephone care for about 160,000 Medicare enrollees, focusing on those with heart disease and/or diabetes.

The result? It achieved only modest improvements in quality-of-care measures, with no improvement in reducing cost and utilization over three years. At first blush, it seems like a no-brainer that providing care management for patients with diabetes and heart disease would pay off. The nurse case managers provided counseling and reminded patients to take their meds, check their vital statistics and get regular check-ups--all of which should reduce complications and hospitalization.

But the truth is that it's hard to get a handle on fee-for-service Medicare patients and efficiently manage their chronic conditions. Managed care organizations, or the new medical homes, have a much greater chance of managing illness because they have access to all of their members? medical histories and relationships with their providers, and ideally they have members long enough for disease management programs to make a difference. The participants in the Medicare pilot were likely too sick for the DM companies to achieve a short-term savings.

The authors of The New England Journal article noted that phone calls from a nurse were not enough to manage care; to be effective, such programs ?need to include intensive, costly, personal clinical attention.?

Disease management?using evidence-based programs to keep patients on their medications, in compliance with treatment protocols and out of the hospital? makes perfect sense for the Medicare population. It just can?t be done effectively with an unmanaged fee-for-service population. Medicare Advantage plans have not always delivered on care management, but the ones that will flourish and receive bonuses under the Centers for Medicare & Medicaid Service's new Star Rating system must provide quality preventive care and disease management. They have a powerful incentive to perform, since those bonuses help offset federal reimbursement cuts.

Decades of fee-for-service care got us where we are, with a costly, inefficient healthcare system. Only managed care, whether it's through MCOs or other programs being piloted with providers, will give us a more effective system.

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