Chronic Care Management: Options for Vermont

1. Chronic Care Management: Options for Vermont Kenneth E. Thorpe, Ph.D. Robert W. Woodruff Professor and Chair Department of Health Policy and Management Rollins School of Public Health Emory University kthorpe@sph.emory.edu November 14-15, 2005 Montpelier, VT

2. Key Facts • Cost of treating chronically ill patients accounts for 75% of health spending in Vermont (over $3 Billion per year) • Rise in chronic illnesses and obesity key factors in driving growth in spending • Chronically ill patients receive about 50% of the clinically recommended care • The IOM and others have highlighted the need to dramatically restructure how we deliver services • Patient focused/central • “integrated” multi-disciplinary approach • Proactive not reactive model November 14-15, 2005 Montpelier, VT

3. Chronic Care Model (CCM): • Does It Work? • Yes. Interventions that contain 1 or more elements of the chronic care model improve clinical outcomes and processes and to lesser extent quality of life according to RAND findings. • Implementation Challenges Facing The State: Can Vermont Build the CCM? • Change how Medicaid pays for care—key challenge for existing Blueprint. November 14-15, 2005 Montpelier, VT

4. Disease States Commonly Targeted by DM Industry • CHF, Cardiovascular disease • Asthma • Chronic Obstructive Pulmonary Disease (COPD) • Diabetes • Cancer • Maternal/Neonatal • Rare Diseases • ESRD November 14-15, 2005 Montpelier, VT

5. Components of DM Products November 14-15, 2005 Montpelier, VT

6. Full Integration: Population Based and Chronic Care Case Based Model HEALTH IMPROVEMENT DISEASE MANAGEMENT Lifestyle interventions Low risk At risk Early Signs Symptoms Disease Disease Management Preventive Services Case Management Screening Acute treatment Disease Management Primary and Secondary Prevention HEALTH MANAGEMENT POPULATION-BASED CASE-BASED November 14-15, 2005 Montpelier, VT

7. Disease Management Targets for Vermont • Medicaid, could be effective approach for managing global commitment • State employees • Dual eligible (Medicaid/Medicare) • Commercial market November 14-15, 2005 Montpelier, VT

8. Managed Care Organizations (MCOs) Play Key Role In Medicaid DM Nationally • Some MCOs manage directly, others outsource and pay vendors on performance (e.g. % reduction in hemoglobin A/C levels among diabetics, % reduction in hospital days among asthmatics) • Disease states typically targeted in Medicaid • depression - anxiety disorders • psychosis - diabetes • hypertension - asthma • CHF, CVD November 14-15, 2005 Montpelier, VT

9. Other states are implementing disease management programs to provide beneficiaries with higher quality care at a lower cost • Florida – runs in AIDS, Congestive Heart Failure (CHF), End Stage Renal Disease (ESRD), diabetes, hemophilia and asthma. Five of these programs reported successful results • Washington state runs programs in ESRD, diabetes, asthma and CHF and has also published favorable results. • Montana started recently with five common chronic diseases and a highly popular nurse call in line to help beneficiaries coordinate care. • Indiana is building its own program rather than outsourcing to disease management vendors. • Wyoming, Texas, New Hampshire, Georgia, Tennessee, and South Carolina are in various stages of RFPs with disease management vendors and will likely begin operations soon. November 14-15, 2005 Montpelier, VT

10. Selected Examples of DM in Medicaid FFS November 14-15, 2005 Montpelier, VT

11. DM Contracting Examples • Washington - full risk • 80% payment at risk based on projected savings • 20% payment at risk based on performance/quality • Has been effective in Washington • Financial and clinical goals need to be clear • Need methodology for program evaluation November 14-15, 2005 Montpelier, VT

12. Based on other states’ experience and vendor guarantees, significant savings can be achieved, e.g., • Disabled and Blind – 4% • Aged – Community & Custodial Care • Acute Care Medical – 25% • Drugs – 10% • Aged in Skilled Nursing – 20% • TANF – Neonates – 6% • ESRD – 8% Contracts typically include performance guarantees. States typically pay base administrative fees to DSM vendors. At the end of the reporting period (Usually a Fiscal year), savings are measured. If the net savings “guarantee” is not met, the vendor will reimburse the state up to 100% of their administrative fees. SOURCE: COMPUTER SCIENCES CORPORATION November 14-15, 2005 Montpelier, VT

13. Vermont can expect challenges to implementing these programs • Need continuous enrollment (at least 12 monthly enrollment by Medicaid / SCHIP) populations • Need to define business model: • Per member, per month adjusted for risk (i.e. Medicare Advantage Methods). • Contracts with physician groups based in cost savings / quality / clinical measures November 14-15, 2005 Montpelier, VT

14. Inside the “Black Box”: Key Implementation Issues • How to identify candidates • Registry • Claims data • Physician referral • How to enroll beneficiaries • “opt-in” (low enrollment ≈ 30%) • “engagement or opt-out model” (are enrolled unless they decline – up to 95% participation) November 14-15, 2005 Montpelier, VT

15. Inside the “Black Box”: Key Implementation Issues • How to pay for DM – Perhaps the Key Issue • Full insurance risk (PMPM risk adjusted payment using Medicare Advantage Model) • P4P – Performance Risk • Define evidence based guidelines November 14-15, 2005 Montpelier, VT

16. Inside the “Black Box”: Key Implementation Issues • P4P (continued) • Bonus pool distribution at practical network level based on • HEDIS measures (50% weight) • Patient satisfaction (30% weight) • IT investment (20% weight) November 14-15, 2005 Montpelier, VT