Are Commercial Disease Managers Willing and Prepared to Enter the Medicare Market?
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0092-8615/2002
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Copyright Q 2002 Drug Information Association Inc.
ARE COMMERCIAL DISEASE MANAGERS WILLING AND PREPARED TO ENTER THE MEDICARE MARKET?* JOSHUA COHEN,PHD Senior Research Fellow, Tufts Center for the Study of Drug Development, Boston, Massachusetts
Recently, the public policy debate on Medicare reform has turned to adding a prescription drug benefit. Currently,approximately a third of Medicare beneficiaries lackpharmaceutical coverage. Lack of coverage appears to be particularly detrimental to the chronically ill Medicare subpopulation that often needs prescription medications on a daily basis, Several Congressionalproposals would establish disease management demonstration projects concurrently with a prescription drug benefit. Theoretically, implementation of disease management programs that improve coordination of drug therapy with hospital and physician care services would contribute to a more cost-effective drug benefit. This paper presents results from a Tufts Center for the Study of Drug Development survey describing current disease management practice in the United States. The survey results suggest willingness on the part of commercial disease managers to negotiate performance- and (insurance) risk-based contracts with Medicare. However, at present, disease managers enroll only a small number of Medicare beneficiaries; less than 20% of their total enrollment. Disease managers also have very limited experience with government agency contracts, which comprise less than 5% of their total contracts. In addition, comparatively few disease managers surveyed focus specifically on diseases that are highly prevalent among Medicare beneficiaries, such as Parkinson’s, Alzheimer k, EndStage Renal Disease, and Chronic Obstructive Pulmonary Disease. These survey findings suggest that disease managers are not currently filly prepared to enter the Medicare market en masse. Key Words: Disease management; Medicare prescription drug benefit; Insurance risk
INTRODUCTION THE MEDICARE fee-for-service program has traditionally been more generous in terms of reimbursementof acute care episodes such Presented at the DIA 2001 Annual Meeting, July 10, 2001, Denver, Colorado. Reprint address: Joshua Cohen, PhD, Senior Research Fellow, Tufts Center for the Study of Drug Development, 192 South Street, Suite 550. Boston, MA 02111. *Research for this paper was supported by a grant awarded to the author by the DIA research grants program in May 2000.
as hospitalization and physician visits, and less so with respect to most long-term care, home health, and preventive services. Since each service is typically delivered, billed, and reimbursed separately, the functional and financial separation of treatment components may have inhibited more cost-effective care. Component management occurs if both health care providers and payers of health care services view health as well as budgetary matters through a specific window of care and/ or administrative budget for which they are responsib
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