Disease state management

Thursday, October 31, 2002

WASHINGTON, D.C. - To prevent and manage chronic diseases and thus control soaring medical costs, the Center for Best Practices at the National Governors Association (NGA) convened high-ranking policymakers from eight states and one territory in late August to help them develop plans of action for disease management.

Disease state management (DSM) programs are gaining favor as a possible way to reduce healthcare costs. Though payers will not currently reimburse for DSM services, even some HME providers have begun fledgling DSM programs.

Recently, a senior policy analyst in the NGA's Health Policy Studies Unit, Lydia Faulkner, spoke with HME News about the DSM. Here are excerpts from that conversation:

HME News: How would states put disease state management into practice?

Lydia Faulkner: The way they would probably handle it is in their Medicaid or Public Employee and Retiree populations, since those are state-administered programs. There are ways to try to better identify your high-risk populations and help those patients and their providers better adhere to treatment plans based on tested, evidence-based medicine with proven outcomes.

HME: Providers often complain that Medicaid is a terrible payer, so how would they implement DSM programs without an increase in reimbursement?

LF: The idea, of course, if that if you identify high-risk patients before they become high-risk, high-cost patients - that is, you intervene early and keep them from becoming extremely sick - these people won't need to utilize Medicaid or other services as much. That's good for them and for state budgets. Remember that the problems caused by chronic disease account for more than 70 percent of nation's total medical care costs overall, as well as almost 70 percent of total Medicaid expenditures. So it's cost-effective to catch people early.

HME: Are we going to see insurers paying for DSM services in the near future?

LF: I think that if it can be proven that disease management does indeed save money in terms of healthcare expenditures, I cannot image why or how a payer could fail to start reimbursing for that. It's a bit of a "chicken and egg" situation - until there is more proof, those strategies may not be covered. HME