Looking to manage care more closely - new techniques in case management to manage chronic illness and high-risk pregnancies - Cover Story

Employers are going beyond traditional case management to manage chronic illness and high-risk pregnancies.

For years, insurers and third-party administrators (TPAs) have closely managed treatment plans for catastrophic injuries and illnesses. Spinal cord and head injuries, AIDS, and motor vehicle accident victims typically have received close scrutiny. Such cases lend themselves to catastrophic categorization, and all insurers use these diagnoses as criteria for applying case management techniques, says Kathleen Douglas, director of the medical management unit for Massachusetts Mutual Life Insurance Co. in Springfield, Mass.

Insurers and employers, however, are beginning to apply case management in situations that don't fit the traditional definition. Chronic diseases, such as diabetes and asthma, and cases not necessarily described as catastrophic--high-risk pregnancies, for example--are now frequently targeted for case management.

Employers, case managers, and insurers agree that more aggressive case management may be warranted in smaller cases. "You need to go beyond the strict decision tree related to catastrophic cases and look at high-dollar cases that might not have a diagnosis that would strictly fit into case management," advises Mindy Owen, past president of the Case Management Society of America (CMSA), in Washington, a national professional association of case managers.

Gary Wolfe, CMSA president-elect and director of case management for Pacific Review Services (PRS), a health care cost management firm in Cypress, Calif., concurs. "You still have to worry about those $100,000 and $250,000 cases," he says. "But you also have to look at managing some of the other events that, over time, contribute to high costs, as well as the inherent employee problems of lost time and lost productivity."

A broader focus

Typical of how employers are expanding utilization of case management services is the case management program at Santa Barbara Cottage Hospital and Cottage Care Center in Santa Barbara, Calif. Case management for the 465-bed hospital's more than 1,800 employees was initially handled in-house. But, says John Crozier, manager, compensation and benefits, "It was difficult for our staff to work with physicians whom they dealt with all the time and really be objective about case manegment." In October 1990, case management was assigned to PRS.

At first, PRS's case management services were invoked based solely on inpatient hospitalization. However, after 15 months' experience, the process was expanded considerably. "We realized we weren't catching certain diseases, such as AIDS, for example," Crozier explains. "You don't necessarily have a hospitalization right away, or you may have a very short hospitalization that, by itself, wouldn't necessarily cause a case management program to kick in. Also, you might look at someone who keeps returning to the hospital, even though they're short stays. The fact that this keeps occurring might make it appropriate for case management."

It was just such a pattern that served as a red flag to activate case management in a situation that involved a diabetic patient who was terminally ill, notes Crozier.

An employee's spouse was coming in for hospital stays of one or two days over about six months. Noting the frequency of the admissions, a case manager investigated and found that the inpatient stays were being used as a means of avoiding home visits by a nurse. "The couple tried to save their home visits because the hospital's benefits plan had a limit on the number of at-home visits from a nurse," Crozier explains. Once the full scenario became clear, the employer opted to remove the home visit limit for the patient.

Since the care could be easily performed at home by a nurse, the result was more convenient, quality care for the patient and savings for the employer. Even with the charges incurred for the nurse, Crozier estimates savings of at least $10,000 over the last eight months of the patient's life. As a matter of course, Santa Barbara Cottage Hospital now considers chronic cases as case management candidates on an individual basis, explains Crozier.

Recognizing the evident cost containment benefits of case management, employers are increasingly utilizing this approach. Five years ago, 50% of employers responding to the annual health care benefits survey conducted by A. Foster Higgins & Co. Inc., benefits consultants in New York, were using case management. By 1992, that number had climbed to 69% of surveyed employers.

Managing prenatal costs

Case management is also routinely applied in all maternity cases. "Maternity management is an area where there's usually no problem, but you manage the case in preparation for that expensive claim," says Crozier. "The employee makes initial contact with PRS, gives the vendor the physician's name, and answers some questions. Based on that first phone interview, PRS determines whether the pregnancy is low, medium, or high risk. Each one is handled differently," he continues. No high-risk pregnancies have occurred since Santa Barbara Cottage Hospital flagged maternity claims for case management. However, Crozier is well aware of what just one such case can cost. The highest medical claim in the hospital's history was a neonatal case that cost $550,000. Most of the charges were for intensive neonatal care during 1990--just before the hospital contracted for outside case management.

Three years later, the hospital has achieved substantial bottom-line savings in health care costs. "Our total utilization management savings was $368,000 for the last 12-month period. Case management accounted for $227,000 of that total," says Crozier.

"Other than the cases you actually catch and document, I think there's a strong sentinel effect" from case management, Crozier points out. "Our doctors know that we watch our plan." As a result, during 1992, medical costs increased only about $65,000, to a total of $4.1 million--a 1.6% increase over the previous year.

Like Santa Barbara Cottage Hospital, Polychrome Corp., a manufacturer of graphic arts and supplies in Fort Lee, N.J., includes high-risk pregnancies among the health conditions that call for case management, says benefits coordinator Carol Jankowski. For more than three years, Polychrome has used Options Unlimited Corp., a health care and disability management firm in Huntington, N.Y., to manage a variety of potentially high-cost cases. In one high-risk maternity case, for example, doctors recommended that a patient be hospitalized for the last two months of pregnancy. As an alternative, Options Unlimited arranged for home uterine monitoring and the services of a health care worker in the home. "The woman didn't need skilled nursing care, but she had two other children, so the family did need some help in the home," Jankowski explains. The home care services plus Options Unlimited's fees totaled about $13,000, compared with an estimated $36,000 in hospital fees (not including doctors' charges) if the patient had stayed in the hospital. A premature delivery would have required neonatal care of at least $1,200 per day.

Even insurers are stepping up their efforts to more closely manage cases in which patients have chronic illnesses. In Missouri, the Blue Cross and Blue Shield plan announced in July that it would assign case managers to subscribers with certain clearly identified conditions, such as angina, congestive heart failure, low back pain, gastroenteritis, pneumonia, asthma, and pregnancy or delivery complications. While closely managing the care of patients in these groups, Blue Cross is removing for certain patients the requirements for such utilization review procedures as precertification, mandatory second opinion for surgery, and discharge planning. The program is aimed at the 5% of members who account for 65% of all health costs. It also should help reduce paperwork for customers and providers. No results are available yet, since the program is new.

With the advent of a nurse case management program implemented in mid-1992, Procter & Gamble, consumer products manufacturer in Cincinnati that employs 53,000 in the United States and 106,000 worldwide, is looking for a way to identify chronic conditions and illnesses that can be case managed.

Managing chronic illness

"Catastrophic cases are handled fairly well by the insurer, says Janice Dees, health risk manager for Procter & Gamble. "But chronic cases are our biggest opportunity for case management today," she says. In addition, long hospital stays and frequent short-term hospital admissions can also identify potentially high-cost cases that are not necessarily catastrophic.

P&G's Quality Care Consultant (QCC) Program is administered by nurse/case managers in partnership with two insurers. Initial cases are identified based on their potential to drive up costs. The insurer faxes the claim and relevant information to the P&G nurse within 24 hours of receipt. The case may wind up being managed by the nurse/manage, the insurer, or a case management vendor, whichever is appropriate. The appropriate case manager is determined on a case by case basis.

In examining costs, P&G found that high-cost users of health care services fell into three groups: those with catastrophic conditions; those with chronic conditions, such as heart disease and cancer; and those with mental health or chemical dependency disorders. The QCC program is designed to match the needs of high-cost users in the first two groups with the most appropriate case management provider. Because the program is relatively new, P&G has not yet begun managing mental health and chemical dependency disorders.

Noting that chronic cases are often managed by internal personnel, Dees, the health risk manager, offered an example of a terminal cancer patient who wished to stay at home for the duration of the disease. Case managers helped fulfill the patient's wish to die at home by providing the support and services needed to enable the patient to move to a home setting from the hospital and arrange for care under a hospice program. "Hospice care not only helps relieve the patient's physical pain, but provides wonderful care for the family and emotional support for both family and patient," Dees says. As a result, the patient's and family's goals were achieved.

Although P&G doesn't have any hard data on how much it saved with hospice care, Dees estimates that the company saved the equivalent of two inpatient hospitalizations. In addition, P&G has saved a total of $670,000 at five P&G sites in the first six months of 1993. The QCC program cost $58,000, resulting in a return on investment of $11.55 for every $1 spent.

Currently, Dees is working with P&G's insurers to build an automated case management system that will track treatments as well as the final outcome in cases. In tracking final outcome, the company intends to look at both the clinical outcomes and medical expenditures. "What's always been missing from insurers is accountability for cost and outcomes," Dees says. Once the automated tool is approved, she expects that to change. The system is being tested at three P&G plants.

Another objective of P&G's new focus on case management is to empower patients to take part in the decision-making process about treatment alternatives. "You teach them about their disease and get patients involved in a partnership so they can communicate with the physician and make the appropriate decisions about their diseases," she says.

In a recent case, an infant was born with hydrocephalus, a condition characterized by abnormal increase ion the amount of fluid in the cranium. Although the parents lived 80 miles from the hospital in which the infant was being treated, they were reluctant to care for the infant at home. After spending time with the family, a nurse/case manager realized that the parents were afraid to care for the infant because they did not understand the disease. Educating the parents about the disease and how to care for the infant eased the baby's transition from hospital to home.

Aside from managing chronic illness, employers are beginning to apply case management to treatments that are relatively inexpensive. With about 2,400 employees, Amica Mutual Insurnace Co. in Providence, R.I., provides a classic example of a mid-sized employer using aggressive case management. The insurance company draws on case management services provided by its secondary insurer, which handles major medical expenses, prescription drugs, and outpatient psychiatric care.

Setting new criteria

Length of time spent in the hospital or in an alternative health care setting is one major criterion for putting a case under the scrutiny of a case manager, says benefits officer Pam Mucciarone. Another red glag is the size of the claims, which are reviewed as they are submitted to Amica. The expense amounts that may act as red flags are relatively low. "If a case goes over maybe $5,000, we look at it. And if we know it's going to be a long-term case, anything over $2,000, I would look at," she says.

For example, a patient recently released from the hospital required home intravenous therapy, she recalls. Including the medications, supplies, and visits by a registered nurse to administer the therpay each day, the total claim would have been about $6,000 without case management. However, when the first bills came in, Mucciarone called the home therapy provider and negotiated a discount based on payment being made directly from employer to provider within seven working days. "We ended up paying around $4,000," she says.

In other cases, Mass Mutual acts as the negotiator. On a recent highrisk pregnancy, for example, Mucciarone asked Mass Mutual to negotiate a discount with the provider. The red flag here went up when the first bill came in because the bill was for Tokos Medical Corp., a provider group that markets home monitoring devices for high-risk pregnancies. Mass Mutual negotiated a 20% discount on charges for home monitoring and a daily visit by a nurse. The total bill was $7,905 and the final amount paid was $6,24--a savings of $1,581.

Mucciarone also gets actively involved in the case identification process. Prior to some surgical procedures, she asks Mass Mutual to review the file and inform her of the reasonable and customary charges before the patient receives any care. "For certain types of surgeries, we want to know what Mass Mutual will pay, what the reasonable and customary charge is going to be, and whether Mass Mutual believes the procedure is medically necessary." Mucciarone estimates that no more than 5% to 10% of all employee and dependent cases are managed by Mass Mutual. However, she says that she'd like to see the insurer more aggressively manage a larger number of non-catastrophic cases.

An aggressive approach is not limited to smaller organizations. Paper manufacturer Champion International Corp., headquartered in Stamford, Conn., has made more aggressive case management an objective in 1993, says Wanda Tippens, manager of health and welfare administration. Benefits for more than 80,000 employees, dependents, and retirees are administered through benefits administration offices in Hamilton, Ohio.

Champion contracted with Peer Review Analysis Inc. (PRA) in Boston, in 1991 to provide health care utilization management services at all of the company's 80-plus locations nationwide. PRA identifies case management candidates that have received impatient treatment. "We've asked them, when appropriate, to help ease patients' transitions to different settings without jeopardizing the quality of care," says Tippens. In one instance, a terminally ill child regularly required oxygen therapy. Based on the case manager's recommendation, the family has received the air conditioning, mechanical ventilatin, and suctioning equipment and home nursing service needed to keep the child at home. The total monthly cost is about $4,200. In contrast, inpatient pediatric care would cost about $60,000 each month, says Tippens.

More than $1.7 million in costs were avoided for 44 inpatient cases that occurred during the first quarter of 1993, says Pippens. "That's an average savings of $39,000 to $40,000 per case," she notes.

In addition to having PRA montitor inpatient treatment, Champion wants PRA to be more involved with outpatient cases as well, Tippens says. "We're going to look to PRA to help train the staff [to become more adept at identifying which cases shoudl be managed]," she says. No data are available yet on outpatient case management.

Stretching the benefit dollar

In summary, case management means assisting "the patient, the family, and the provider in choosing and evaluating a treatment alternative that is quality, has a cost-effective outcome, and will maximize or stretch the benefit dollar," says Douglas of Mass Mutual. Balancing quality with cost containment is a high priority according to benefits managers who have experience with the case management process.

"If the quality isn't there, you're going to see a readmission [of the patient]," observes Tippens of Champion International. The case manager may be called on to do anything from negotiating a discount, to obtaining agreement from patient, family, provider, insurer, and employer on a treatment choice, to recommending alternative treatments for patients with terminal diseases.

COPYRIGHT 1993 A Thomson Healthcare Company
COPYRIGHT 2004 Gale Group