WASHINGTON, May 17 (UPI) -- DISEASE MANAGEMENT PILOT BEGINS
American Healthways and the Centers for Medicare and Medicaid Services have finalized a pilot project that will test whether disease management programs can improve quality and save money for beneficiaries who have diabetes and congestive heart failure, two costly chronic conditions.
The Medicare Payment Advisory Committee has estimated that 5 percent of Medicare beneficiaries account for some 50 percent of Medicare spending -- mainly because of high-cost chronic illnesses.
Managed care plans may handle this population by including disease management benefits -- where nurses and other healthcare staff help patients at home with medication and therapies to keep the condition under control. That keeps people healthier and reduces crisis events and hospitalizations.
In Medicare fee-for-service, however, it was long felt disease management could not be done because the government entitlement program lacked the administrative structure health plans have to operate such a program. There also were questions of how Medicare would reimburse for disease management and measure quality of care and cost outcomes.
American Healthways, with headquarters in Nashville, has taken advantage of opportunities for growth on the private insurance side to become the leader in this young health sector. It is ready to provide that administrative bridge to Medicare in the FFS population. Disease management pilot programs are part of the Medicare Modernization Act of 2003.
American Healthways' Medicare Health Support three-year pilot will provide disease management services to 20,000 Medicare FFS beneficiaries in Maryland and the District of Columbia. Later this summer, the company also will partner with Cigna, as a subcontractor, providing disease management to another 20,000 beneficiaries in Georgia. A small sector of Medicare FFS allows private insurance plans to cover beneficiaries.
All American Healthways' fees for the Maryland/D.C. project will be based on the company's performance. Failure to meet a performance target of a 5 percent reduction in costs will mean the company has to refund part of the fee to CMS. The company feels it will be able to make an initial determination of performance within 10-12 months of beginning the project.
American Healthways has updated its guidance for fiscal 2005, which ends Aug. 31, to add in the expected costs for beginning the pilot programs, reducing earnings per share from $1 or $1.02 to 90 cents or 92 cents.
Company Chief Executive Officer Ben Liedel Jr. told reporters the pilots will "mark the first time Medicare fee-for-service beneficiaries have been able to access a disease management program designed specifically for their unique needs."
"CMS will have the necessary results to provide expansion of disease management across the Medicare population," he said. "Simply put, we expect our successful performance under the pilot to lead to a potential doubling of the market for our services."
American Healthways already has 1.5 million people in its disease management programs, including 100,000 beneficiaries in Medicare Advantage, the program's managed care arm.
CANCER DRUGS FILL PIPELINE
Cancer is big for 2005 and healthcare trend watchers believe the pharmaceutical industry is nearing a major breakthrough in new cancer drugs.
Pharma's research and development drug pipeline, in recent years a cause for concern because it contained so few potential blockbusters, now boasts 399 new drugs just for cancer.
A tally by the Pharmaceutical Research and Manufacturers of America shows 179 companies and the National Cancer Institute all are working on cancer therapies.
Pharmaceutical company executives this spring have been highlighting their cancer drug portfolios and pipeline at one healthcare conference after another.
Dr. David Schenkein, senior vice president of Millennium Pharmaceuticals, told an oncology conference this week the drugmaker's first multiple myeloma cancer drug, Velcade, is showing very strong sales, up 54 percent over the first quarter of 2004.
"Velcade is going to be a major component for profitability next year," he said.
PhRMA's drug development lists include 62 for lung cancer, the leading cause of cancer death in the United States; 49 for breast cancer; 50 for prostate cancer; and 35 for colorectal cancer, the third most common cancer in men and women. More than 570,000 cancer deaths are expected this year in the United States.
THINKING ON MEDICAL ERRORS CHANGES
The Institute of Medicine's 1999 report "To Err is Human" was a wake-up call for the healthcare industry on medical errors. Lucian Leape, an adjunct professor of health policy at Harvard, and Donald Berwick, chief executive officer of the Institute for HealthCare Improvement, write in this week's Journal of the American Medical Association that progress reducing the 100,000 or so deaths each year from medical errors has come about in three ways.
First, the medical community is giving up the blame game for errors and is focusing on the idea that bad administrative or clinical systems lead to the majority of mistakes. Second, the report got leading healthcare organizations to work together to improve safety. Even the government got in the act -- putting up $50 million for a research study. Third, the industry has begun to adopt guidelines and protocol for patient safety going forward.
Progress is not, however, uniform across the country and problem areas remain, often because of a lack of leadership.
That said, however, among initiatives developed at hospitals since the IOM report, computerized physician prescribing reduced errors by 80 percent; including a pharmacist with medical teams reduced preventable adverse drug events by 78 percent; and standardizing medication practices lowered adverse drug events by 60 percent.
"While the progress that has been made in improving patient safety is encouraging, it has been much too slow. Hospitals need to have crash programs to implement the many safe practices that we now have evidence work. We will not become safe until we put that knowledge into practice," the authors wrote.
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