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••Fall 1998 / Vol 2, No 4 |
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External Affairs Purchaser Demands for Care (Disease) Management | to pdf >> By Joel D. Hyatt, MD Employer group purchasers are requesting increasingly specific information from health plans about "disease management" because they understand that better management of chronic diseases--which account for a disproportionately large use of health care resources--reduces health care costs and increases employee productivity. Responding adequately to some employer group purchasers was difficult initially, but Kaiser Permanente (KP) is preparing to show its commitment and effectiveness in Population Health Care Management by responding to employer groups from our strength and experience as an integrated delivery system and as a health maintenance organization (HMO) designed on the group-practice model.
California employer groups (purchasers) are holding health plans accountable for their clinical and administrative performance by issuing performance standards and (financial) guarantees.1,2 In 1997, the Kaiser Permanente California Division (KP-California) returned several hundred thousand dollars to California employers for not meeting negotiated 1996 clinical performance improvement targets based on the Health Plan Employer Data Information Set (HEDIS) measures and returned several more hundred thousand dollars for not meeting administrative and membership services guarantees. At first, in 1997, Atlantic Richfield Company (ARCO) chose Foundation Health Systems (HealthNet) and did not pick KP as its 1998 benchmark health plan for their employees and dependents, in part because KP scored low in demonstrating use of population-based "disease management" for our members. However, that choice occurred at the same time that KP-California was selected as the Blue Ribbon HMO by the Pacific Business Group on Health (PBGH)2 and was shown to have among the lowest risk--adjusted prenatal mortality and acute myocardial infarction mortality in California. Heavily influenced by their health benefits consultants (William M. Mercer, Towers Perrin, Deloitte & Touche, Watson Wyatt), the larger, sophisticated purchasers (Southern California Edison, Hughes Electronics, Disney, Digital) have understood the 8020 rule, ie, that 20% of their employees--mostly those with chronic conditions--account for most of the companies' insurance costs as purchasers of health care.3 The population of current and future insured employees, dependents, and retirees is aging, and the prevalence and incidence of chronic disease in that population is increasing. These demographic and epidemiologic changes predict an even greater economic burden for purchasers of health care. Employer groups are requiring evidence that health plans are effectively managing these populations, which they hope will help lower health care costs and increase employee productivity (function) as well as time on the job. Employer Group Purchasers' Expectations A representative sampling of RFP questions from purchasers is shown (Fig. 1). Purchasers have specific expectations about how health plans should engage in disease management. For example, the RFP from the University of California (UC) framed questions as if disease management were a study with hypothesis and testing criteria. Carrying this focus even further, several purchasers (including UC and Hughes) are now requesting employer-specific outcomes and results. Responding to these kinds of detailed questions presents a formidable task. Employer groups are evaluating, grading, and comparing health plans based on RFP responses, sometimes supplementing these processes with onsite interviews and audits. Some employers have created their own report cards. Hughes and UC (advised by Deloitte & Touche), for example, use their Value Equation® to grade a health plan's performance. Based on these evaluations, employer groups are selecting health plans to offer their employees and are promoting specific health plans as preferred or benchmark plans, sometimes providing attractive underwriting or subsidizing the cost to encourage enrollment. Reaction to KP Responses After receiving this feedback, we committed ourselves to three goals: 1) learn more from purchasers and their consultants, 2) develop better ways to effectively show KP's strengths in managing the care of members who have chronic conditions, and 3) encourage KP in Southern California (KPSC) to focus on improved approaches to managing the care of members who have chronic diseases. First, our purchasers mentioned that several other health plans have established relationships with many of the more than 40 leading disease management vendors, eg, HealthNet with Schering-Plough Corporation, Lovelace Health Systems (CIGNA) with Greenstone Solutions (Upjohn). Other health plans, such as PruCare, have implemented their own centralized, claims--based tracking systems; targeted mailings to providers and members; telephone outreach; and health risk assessments. Using health plan claims, membership files, and data from pharmacy benefit management services, disease management vendors have analyzed health plan populations to develop data bases from which the vendors create member mailings, initiate telephone interventions with care managers, and give limited notification to the providers. Although the effectiveness of these methods has not yet been shown, employer groups have seemed satisfied that these health plans were actively conducting disease management.
Second, interviews were conducted with consultants from Deloitte & Touche, Watson Wyatt, and other firms who were willing to advise us on how to better respond. In large part, employers and KP seemed to be speaking in different dialects. But once we began to speak in terms of clinical populations and of managing health or care for defined populations of members or patients, our approach to care management could be understood as comparable to the "disease management" models. Employers could find persuasive the description of KP as always having been focused on improving the health of our members--a focus which is part of our core values as stated in the KP Aspiration Statement (Fig. 2). The specific, population-based KPSC Clinical Strategic Goals for improving outcomes in cardiovascular disease, cancer, communicable diseases, pregnancy and newborn care, and asthma--along with evidence of objective clinical measures and results--would further illustrate the KP approach to "disease management," which we now call Population Health Care Management. Third, KPSC committed to increasing its focus on population-based care management. Care management is not new to KP. For example, KPSC has a long history of specific regionwide Care Management Programs like that for Elder Care (1986) as well as others for perinatal services/high-risk pregnancy (1983), HIV/AIDS (1988), and endstage renal disease (1992). In addition, local programs for treating diabetes, asthma, coagulation dysfunction, and congestive heart failure are flourishing. We had an opportunity to build on this base of experience by greater coordination, facilitation, and transfer of successful practices. Beginning in 1998, KPSC is targeting clinical populations for greater alignment with our Clinical Strategic Goals and purchasers' expectations (eg, for treating congestive heart failure, diabetes, and asthma). To do this, KPSC is identifying Permanente leaders in care management across the Region; providing increased support for the information systems, data, and analysis; and providing project management and consultative services for care management in all service area operations. With availability of patient lists and with patient registry capabilities, our physicians already have a growing appreciation of the power of coordinated, integrated systems for effectively managing the care of our large clinical populations. Demonstrating the Value of KP Population Health Care
Management to Purchasers in 1998
Our recent experiences with employer groups in 1998 have been positive. Since late 1997, we have totally rewritten our responses to RFPs so that we describe our Population Health Care Management. We have presented our descriptions and results of Population Health Care Management to many employer groups and consultants. Subsequently, ARCO was very impressed with our Population Care Management Initiatives, and PepsiCo announced that KPSC will be their benchmark health plan for 1999. We were told that our ability to show the population focus of our integrated delivery system along with objective clinical results and outcomes was very persuasive. Hughes has given KP "A" grades this year on the Value Equation® for disease management. This rating will be taken into consideration in these employers' open-enrollment communications with employees about health plans. We continue to develop and improve our approaches to Population Health Care Management and show the value of Permanente Practice for measurably improving health outcomes. With purchasers and accreditors (ie, the National Committee for Quality Assurance, NCQA) setting expectations for care management and with the changing demographics and diseases seen in our health plan member population, KP's future success will depend greatly on its effectiveness in managing the care and services provided to specific populations of members. Indeed, the most successful HMOs will be those that produce the best population outcomes most efficiently and with the highest patient satisfaction. References 1. Schauffler HH, Rodriguez T. Exercising purchasing power for preventive care. Health Aff (Millwood) 1996;15:73-85. 2. Kaiser awarded 1997 Blue Ribbon HMO: PBGH alliance negotiates 1% trend for 1998. Pacific Currents 1997 Fall:3(3). 3. Brunner L, Hickey ME. Disease management: Lovelace Health Systems episodes of carea case study. Best Pract Benchmarking Healthc 1997;2:254-7.
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