More Health Care Plays

The nation's greatest contemporary health challenge is chronic illness. While modern medicine and public health have dramatically improved our ability to survive acute threats like heart attacks and infectious diseases, chronic conditions demand new and fundamentally different approaches than those currently offered. For well over a century, medicine has emphasized acute care. Doctors are trained to "find it and fix it." A broken bone needs a cast. A heart attack leads to a bypass operation to correct a clogged artery. A badly infected foot is amputated.

While obviously necessary in many cases, these medical responses often represent a failure to act proactively against chronic illnesses, which are by definition ongoing and resistant to quick fixes. Osteoporosis, which weakens bones and makes them brittle and fragile, can be managed with diet and drugs, as can coronary artery disease. Properly fitted shoes and regular foot exams prevent disabling diabetic foot ulcers.

About one-half of all Americans have a chronic condition, and about one-quarter have multiple chronic conditions. Seven out of every 10 deaths in America each year are due to a chronic disease. In less than 20 years, care for these conditions will consume 80 percent of the nation's health care spending. Approximately 7 percent of the Medicaid population account for 54 percent of Medicaid's costs. Chronic disease is a leading cause of disability in the United States.

Pennsylvania Gov. Ed Rendell created, by executive order, a Chronic Care Management Commission that has developed a statewide strategy managing chronic disease. According to Rendell, "About 78 percent of all health care costs can be traced to 20 percent of all patients -- those with chronic diseases. We cannot reduce the occurrence and cost of chronic diseases without aggressively addressing prevention, detection and treatment in a comprehensive, pro-active way."

"Emergency services and hospitalizations are not only costly to drivers but also signs of poor prevention and treatment of disease. States have been innovators of chronic disease prevention, early intervention, and disease management programs. In Arizona and most other states, we have realized that what is good for patients can also be good for state budgets." -- Gov. Janet Napolitano, Arizona

States are part of a revolution in health care that is making "care management" or ongoing treatment of chronic illnesses the focus for health care providers, instead of reactive acute care in hospitals for patients whose conditions have become life-threatening. Like the Medicare program for the nation's elderly, Medicaid faces a substantial challenge with chronic illness, which is more common in the older, poorer, and disabled Americans whom Medicaid serves. Unlike Medicare, Medicaid programs in many states have been taking action for several years to stem the tide of red ink and lost lives. Fighting chronic illness is the key to healthy aging.

Medicaid pays for about 40 percent of the health care costs for people with disabilities and for the low-income elderly who also qualify for Medicare (known as dual eligibles). Although the percentage will decline somewhat with the new prescription drug benefit under Medicare, Medicaid will continue to be on the hook for billions of dollars to supplement Medicare, and to provide the full range of health benefits for low-income families.

By looking at patients' needs across the spectrum of services from home care to hospitals, states have been pioneering more effective and less costly ways to prevent and treat chronic conditions and the problems they cause.

Here are some examples:

Medical Homes. A medical home is the antidote to today's disjointed health care system. It's where a doctor makes sure patients are getting all the right care, both prevention and treatments. It involves treating each patient as a whole person instead of their parts by customizing and coordinating their care. It's an old idea with a modern twist. It deploys information technology for new means of communication like email and for tracking patient progress through electronic health records. States like North Carolina have used medical homes in Medicaid to improve care for patients with chronic conditions and saved 10 percent of its costs by avoiding duplicative services and expensive patient crises. Establishing medical homes also boost payments to primary care physicians that can help stem the growing shortage of primary care.

Managed health care. Many states use managed care plans to provide health care benefits to low income families, but fewer states use it for low-income elderly and disabled individuals. Beginning in 1999, Oklahoma has enrolled this population in managed care plans operating under contracts developed in cooperation with advocates for the poor and health care providers. By using managed care techniques, such as assigning nurse case managers for high-cost patients, enabling patients to care for themselves, managing multiple prescription drugs, and integrating family, medical, behavioral health and community resources, Oklahoma has increased the satisfaction of Medicaid recipients while lowering costs. States should hold managed care plans accountable by measuring and assessing their performance.

Integrated health plans need not be the domain of states alone. Large employers and trade unions can implement managed health techniques too. The Culinary Health Fund, which is sponsored by Culinary 226, a Las Vegas trade union of restaurant and hotel workers, maintains its own pharmacy with an offering of free generic drugs and negotiates low co-payments on doctors visits and medical services. The Culinary rewards providers who document their effectiveness and provides extra incentives to the top quality providers in the area. All of these efforts are aimed at keeping patients healthier and health costs lower. Other unions and large employers should recognize that they, themselves, can combat chronic illness by taking a more proactive role in the care of their employees.

Community-based care alternatives to nursing homes and hospitals. Few people want to go to a nursing home, but it remains the most common solution when people can no longer function at home. Finding and managing community alternatives, such as home care and adult day care, requires coordination and cooperation among everyone involved in a patient's care. For individuals that only need help with a few activities of daily living, assisted-living may be a possible alternative to institutional care. Assisted-living provides individuals with the comfort of home-care with institutional-style care if need be. Evercare, part of the United Health Group, has developed several ways to save money by managing all of each patient's services, including community and health care services. Operating in Florida, Evercare has reduced demand for costly nursing home care and hospitalizations. Oregon is also widely known for achieving similar results using a public system of community care.

Cash and Counseling. Disabled elderly need help with personal activities ranging from bathing to housekeeping. Before they go to a nursing home paid for by Medicaid, they often receive personal services from paid workers in home care agencies. Unfortunately, the quality and availability of such workers varies widely. For example, many agencies do not provide services outside normal business hours. Disabled elderly would generally prefer to receive personal care assistance from friends and relatives. Cash and Counseling, a successful demonstration program in Arkansas, New Jersey, and Florida, gives them control of their care by establishing a personal account for their cash and counseling. It has now expanded to many other states including Iowa, New Mexico, and Pennsylvania. Patients receive help choosing care and managing the account from trained counselors. They are not only happier and more likely to get the care they need, but these disabled, elderly patients are less likely to need more costly nursing home care.

It is important to note that none of these programs provide easy solutions to the complex needs and problems of people with chronic conditions. Indeed, state Medicaid administrators must carefully manage contracts and continuously assess results. States should also deploy this knowledge and experience throughout Medicaid and all other segments of the state's health care system. To capitalize on their investments in chronic disease management, states should pursue the following three steps:

Prepare checklists of best practices. Given the wide range of successful state initiatives, few states are doing everything that has proven to be successful elsewhere. In response, expert models for delivering care are becoming ever more sophisticated. For example, a Seattle-based research organization, Improving Chronic Illness Care, provides an assessment of existing services, including community resources, patient self-management support, and clinical information systems. This assessment was prepared for health care organizations, but states could use it to create a comprehensive checklist.

Deploy chronic illness care and prevention throughout the state. To varying degrees, private health plans have begun to use disease management techniques, but they lack the volume of patients to give them full experience with chronic illness. They might find Medicaid's experiences very helpful. States should consider running "breakthrough" forums to spread knowledge throughout the state, similar to the breakthrough series pioneered by the Institute for Health Care Improvement. Another strategy is to target whole communities with a top-to-bottom effort to prevent and treat chronic illness. For example, Arizona is working with the city of Avondale to collaborate across all health care sectors to saturate the city with health promotion messages and services.

Make state health officials accountable for improvement. As part of its Healthy Aging 2010 project, Arizona has created report cards on the health status of many counties and the whole state. These reports provide a basis for measuring and assessing success in fighting chronic illness. By partnering with employers, health plans, and Medicare's new regionalized chronic care program, states can create a framework of accountability that will lead everyone in a concerted campaign against chronic illness.

Resources for Action Gov. Rendell, "Governor Rendell Signs First Two Executive Orders Implementing Rx for Pa; Unveils Pennsylvania's First Diabetes Action Plan," press release, May 21, 2007
http://www.state.pa.us/papower/cwp/view.asp?A=11&Q=463368

Pennsylvania Chronic Care Management, Reimbursement and Cost Reduction Commission, "Strategic Plan," February, 2008
http://www.rxforpa.com/assets/
pdfs/ChronicCareCommissionReport.pdf

ACCESS Cost Savings -- State Fiscal Year 2004 Analysis, letter to Jeffrey Simms, Mercer Government Human Resources Consulting, March 24, 2005
http://www.communitycarenc.com/

Patient-Centered Primary Care Collaborative
http://www.pcpcc.net/

"Medicaid Best Buys: Improving Care Management for High-Need, High-Cost Beneficiaries," Issue Brief, Center for Health Care Strategies, March, 2008
http://www.chcs.org/publications3960/
publications_show.htm?doc_id=674876

Culinary Health Fund
www.culinaryhealthfund.org

Lindsay Palmer et al., "Integrated Care Program: Performance Measures Recommendations." Center for Health Care Strategies, June, 2006
http://www.chcs.org/publications3960/
publications_show.htm?doc_id=379026

Evercare, United Health Group, Inc.
http://www.evercareonline.com

Cash & Counseling, Robert Wood Johnson Foundation
http://www.cashandcounseling.org/index.html

The Assessment of Chronic Illness Care Survey, Improving Chronic Illness Care
http://www.improvingchroniccare.org/index.php?p=ACIC_Survey&s=35

"The Breakthrough Series: IHI's Collaborative Model for Achieving Breakthrough Improvement," Institute for Healthcare Improvement, 2003
www.ihi.org/IHI/Products/WhitePapers/
TheBreakthroughSeriesIHIsCollaborative Model Programs, Partnership to Fight Chronic Disease
http://www.fightchronicdisease.org/resources/model.cfm

Healthy Aging 2010 Reports, Arizona Department of Health Services
http://www.azdhs.gov/phs/healthyaz2010/
healthy_az_report_cards.htm

"Innovations in Chronic Care," America's Health Insurance Plans, March 2007
www.ahipresearch.org/PDFs/Innovations_InCC_07.pdf

Additional Reading

"Purchasers Guide: Patient Centered Medical Home," Patient-Centered Primary Care Collaborative, ERISA Industry Committee, April 16, 2008:
http://www.pcpcc.net/employerguide.pdf

David B. Kendall, et al., Healthy Aging v. Chronic Illness: Preparing Medicare for the New Health Care Challenge, Progressive Policy Institute, February 14, 2003
www.ppionline.org/

Improving Care for Adults with Chronic Illnesses and Disabilities, Center for Health Care Strategies
www.chcs.org/info-url_nocat3961/
info-url_nocat_show.htm?doc_id=206323

Contacts

Suncerria Tillis
Project Manager
Healthy Arizona 2010
1740 W. Adams
Suite 410
Phoenix, AZ 85007
(602) 542-1219
tilliss@azdhs.gov

David Kendall
Senior Fellow for Health Policy
Progressive Policy Institute
4021 Heritage Way
Missoula, MT 59802
(406) 543-2265
(772) 679-0652 (fax)
dkendall@ppionline.org