Wednesday, August 5, 2009

Disease Management Thrives in Legislative Neglect

A sentiment of lack of change exists, now that legislators are on break. A couple ideas occur to me, examining the disease management industry, that make the legislative slowdown neutral or good in terms of its effect upon the healthcare system.

First, I’ll examine the progress of the disease management industry in the benign neglect of Congress and the Health and Human Services Administration. I’ll then provide an example of how legislation already signed into law this year contradicts core tenets of the Senate and House proposals.

Back in 2000, when HHS was deliberating on how to develop regulations for the HIPAA privacy rule, the agency commented that “[w]e are unable to find generally accepted definitions of the terms ‘disease management’”, and omitted the terms from the final regulation, opting instead for the catch-all category of “health care operations”. Nonetheless, according to BCG ( disease management organizations (DMOs) grew from $346 million in revenue in 2000 to $1.1 billion in 2005. By 2008, outsourced DMOs alone generated $2.3 billion in revenue. While Medicare did experiment with a disease management pilot, to great initial fanfare, the program’s design failed to monitor a control population, and therefore did little to empirically support disease management's claims.

It may be that slower, more incremental progress is better. Witness, for example, the provisions in the recent American Recovery and Reinvestment Act (better known as the Recovery Bill, or ARRA), which permits individuals to opt out of having their data used for “health care operations”. Specifically, if an individual pays cash, the care provider must offer the individual an opportunity to not have his or her data used for “health care operations” purposes. “Health care operations” includes informatics and disease management, so the ARRA cuts away the empirical data on which those programs run. Individuals paying out of pocket are the minority today, but they represent an important shift towards consumer driven healthcare, and are growing at an increasing rate. In just a few years, omitting these individuals from disease management databases could significantly skew the data. This doesn’t bode so well for the reform bills, for which better disease management is a key cost control strategy. (see, e.g., )

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