Does Medicare Really Know How To Save Money And Assure High Quality Care?

I was rather dismayed today after reading an article in the New York Times entitled ” Medicare Finds How Hard It Is To Save Money,” written by Reed Abelson (NYT April 7, 2008). The article summarized what seems to be Medicare’s failure to save money by having nurses call patients with chronic diseases (e.g., heart disease, diabetes). The study began in 2005 and included about 160,000 people. Medicare paid 8 companies about 360 million dollars to make the calls. So far, the results have not shown any significant cost savings to Medicare. There are no data yet (if ever) to show if the study subjects have better health outcomes.

Why was I so unhappy after reading the article?

First, I thought the article was well-written- that was not the problem. The problem seems to be the Medicare administration. It is hard to believe Medicare (presumably someone specific at Medicare?) thought that a few phone calls to patients with chronic diseases would save the system big money within only 2-3 years. I would have predicted that if the phone calls were effective in getting patients to seek more care, the short-term costs would go up. There are reams and reams of data from numerous studies that have already shown that “case management” of patients with chronic diseases saves money- lots of money. The way the money gets saved is by having expert teams manage the disorders (i.e., not just making telephone calls) which results in astonishing savings over time by preventing or slowing progression of disease. It takes time to achieve these types of cost savings. Let’s not forget what accounts for the majority of diabetes care costs. If you have read some of my earlier entries, you already know that the lions share of diabetes care costs are for management of the chronic complications, all of which are preventable by good care long-term. Didn’t the Medicare Program gurus look at the results of the Kaiser-Permanente Health Care Programs for chronic disease? Quite a long time ago, Kaiser-Permanente discovered that they could save gobs of money if they could treat their patients with chronic diseases (I think Kaiser has focused on diabetes, cancer, and heart disease, but I’m not certain- there may be other disorders included) in such a way that they could prevent the complications, which accounted for the major costs in treating the chronic diseases. For example, more than 50% of all Medicare patients on kidney dialysis have diabetes. Kaiser found that by setting up care teams that aggressively managed the patient care, health outcomes were dramatically improved (about 50% better than expected) and the cost savings to Kaiser were huge.

What should Medicare do?

Medicare would do well to emulate what Kaiser-Permanente and others are doing and forget about the phone calls. Phone calls are great to help us remember our hairdresser and dentist appointments, but Medicare could spend its money better. Also, Medicare should not get discouraged about efforts to save money- they just need to be patient (it takes time for chronic complications to develop in people with chronic diseases; 2-3 years would not be enough time even if their intervention was a good one (e.g. case management teams).

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