Vol. 3. No. 1

that a health plan facing a radical turnaround should consider when concentrating its focus, resources, and strategy? The answer is a qualified "yes, maybe," and here's why!

The "Usual Suspects"

The intriguing factoid about health plans is that the most likely cures for their primary illnesses -- inefficiency, failure to meet member and provider expectations, and poor financial performance -- are all straightforward. What we did when confronted with organizational and operational challenges in a health plan twenty years ago is the same approach that should be utilized now, with disease management potentially having a significant role under the right circumstances. Here are the "usual suspects," and how DSM may or may not be a part of the solution.

1. Physician Participation and Performance.
Twenty years ago, we spun the managed care potential story on the ability to coordinate and control the organization and delivery of care. What this evolved into, of course, was controlling doctors -- primarily by underpaying them and then, to some degree, managing care via a cost algorithm that pertained more to contracting efficiencies than quality. But now managed care has changed its tune, with the cry of "power and autonomy to the physicians" -- a position only brought about when health plans discovered that they were getting clobbered in the marketplace of public opinion.

If disease management is really a mechanism for helping to focus on managing care while maintaining physician independence, all well and good, but that's where the chafing starts. Much of disease management requires ceding control of case management and the accompanying intensive disease focus to outside vendors who may not have a reason to really care about maintaining physician relationships.

A portion of the effectiveness of DSM programs can be traced to the notion of out-sourcing care management, a notion that many health plans and their networks could find somewhat distasteful. Therefore, DSM only really works if the health plan is able to strike a balance between focusing on the treatment protocols for a particular condition while not substituting judgment for or placing a heavy business hand on the physician -- which led to the crisis in confidence over managed care in the first place.

2. Poor Blocking and Tackling.
Most health care systems that are having operational and financial woes can trace their problems to an inability to execute the basic and fundamental business processes: determining and verifying eligibility, collecting/coding/tracking/paying claims properly, appropriately pricing the product, and maintaining appropriate levels of service for care management and member management
issues. If you don't do these things right, all of the fancy programs for monitoring and treating asthma, CHF, COPD, and diabetes, just to mention a few, won't have the promised beneficial results. Successful health plan management requires first that the basic blocking and tackling issues be addressed, and then building on those results in terms of marketplace relationships.

3. Poor Network Contracting and Delegation.
If the rates a health plan has negotiated for either hospital or physician network services make it impossible to competitively price the product, DSM will simply act as a bandage rather than stitches and antibiotics. Put simply, disease management can ameliorate, but not overcome, the effects of poor contracting or the inability of provider entities to manage delegated risks. Good contracting probably can yield better economic results in the short term than can the implementation of one or two DSM programs, especially if there are holes in the organization's fundamental operating processes.

4. Poor Product Design. This means
that either the network itself is not comparatively desirable in the marketplace, or the benefits themselves are either too limited, too restrictive, or inappropriately priced. DSM won't help this problem at all, except to the extent that it reduces the cost of care for certain populations, but this particular symptom is usually fatal.

5. Administrative Costs Run Amuck.
If you've got too many staff in too many disorganized silos, DSM isn't going to solve this problem. In fact, you often need more people with greater skill levels to design, coordinate, and operate DSM programs.

6. Lack of Infrastructure. If the focus
hasn't been on the actual management of care from a clinical perspective within a health plan, simply dropping in a DSM program is probably the worst thing you can do. You will confuse your physicians, your members, and your staff, all at the same time, and will probably add additional chaos to an already difficult challenge.

These are the "big six" problems that too often "deep six" managed care companies. If you have a reasonable game plan for dealing with these practical issues, then DSM can be the focus around which the business and the quality of care can be reorganized and regalvanized.

What DSM Can Offer

So what can DSM really offer to a health plan in search of making medical care really work for its membership?

1. Focus.
DSM provides an intensive application of care protocols and education to an identified condition, something that health plan staff often cannot do internally because of lack of knowledge, lack of resources, or both.

2. Education.
DSM is an excellent method for working with physicians and showing them that the only concern with healthcare is not the almighty dollar. Getting physicians to participate in the design and monitoring of DSM programs can help cement the needed but so seldom realized medical-health plan partnership.

3. Create Appropriate Incentives.
Those physicians that actively assist in the DSM initiatives are likely to also help a health plan manage the cost side of the business better. Provided that the leadership is not so concerned with recoupment of all of the dollars into their bottom line rather than rewarding those physicians who demonstrate the initiative to manage well, DSM can be an excellent facilitation of a sound economic relationship with the network.

4. Consumer Education.
DSM is probably the best vehicle, especially when implemented utilizing the Internet, to enhance active patient participation in assuming responsibility for the improvement of health status. DSM programs at their best are patient centered, particularly when utilizing technology and monitoring all aspects of a patient's medical and environmental circumstances.

5. Staff Training.
DSM is an excellent mechanism to provide the knowledge to help a health plan's internal staff manage care better. What often gets complicated, however, is that the DSM vendors are afraid of working themselves out of contracts because internal staff want to assume control over the process after an initial term.

6. Innovative Technology.
DSM companies are the most likely to bring innovative technological solutions to monitoring and communicating with patients, not to mention measuring outcomes. Most of the rapidly appearing technological break-throughs and clinical protocols would be too expensive and knowledge-intensive for a single health plan to implement on its own. In the most successful DSM implementations, focusing on challenging medical and economic problems results in:

• Reshaping the restrictive permission-based medical management environment
• Providing innovations that differentiate the company from its competitors in the marketplace
• Assisting with compliance monitoring and outcomes analysis
• Impacting the bottom line more quickly than can be done internally
• Facilitating improvement in the plan-provider relationship
• Serving as an objective evaluator of how well the organization is truly managing care
• Improving the organization's belief in its ability to accomplish change through positive and focused intervention