Innovative diabetes cost-reduction strategies

The total cost to treat patients diagnosed with diabetes in the United States jumped from $174 billion in 2007 to $245 billion in 2012 (the last year for which numbers are available). That’s a staggering 41% increase over a five-year period, according to the American Diabetes Association (ADA).

Hospital inpatient care represents 43% of the total cost of treating diabetes, whereas prescription medications to treat the chronic disease are 18% of that total. Additional costs include anti-diabetic agents and diabetes supplies (at 12%), physician office visits (at 9%), and nursing or residential facility stays (at 8%).

People with diabetes will have medical expenses of about $13,700 a year, which includes $7,900 that are directly associated with the disease-and that’s about 2.3 times higher than the medical costs incurred by people who don’t have diabetes, according to the ADA.

In terms of sheer numbers, more than 29 million people in this country have diabetes, according to the Centers for Disease Control and Prevention (CDC). Perhaps even more troubling, the CDC highlights that another 86 million people, one in three U.S. adults, have prediabetes, which means a person has blood sugar levels that are higher than normal but not high enough to be diagnosed as diabetes. Taking a look at the next five years, the CDC says that-absent weight loss and moderate physical activity-15% to 30% of those with prediabetes will develop type 2 diabetes.

Here are some of the innovative approaches payers and providers are taking to quell this epidemic, and curb the costs associated with it.

Next: Care management + industry partnerships

Care management + industry partnerships

While the cost of treating diabetes itself is significant, it’s the cost of treating the disease inadequately or poorly that really concerns Kenneth Snow, MD, medical director at Aetna. That’s because of the long-term complications-such as blindness, end-stage renal disease, heart disease, and the need for amputations. “Not only is diabetes catastrophic for patients in the long term, it’s extraordinarily expensive,” he says.

SnowThe disease now impacts more than 9% of the adult population, and 1.5 million more people are diagnosed every year, says Snow, noting that minority populations are far more likely to suffer from the disease. This is particularly the case for African Americans, Native Americans, Asian Americans, and Hispanics. Further, 28% of Medicare patients have been diagnosed with diabetes, he says.

Diabetes cases will continue to trend upward, particularly as demographic trends change here in the United States-both in terms of ethnicity and as our population ages, says Snow. He notes that the obesity epidemic is also a significant risk factor in the growth of diabetes over the last few decades. The incidence of diabetes increases in people who earn less money and have less education, he says.

One of Aetna’s traditional programs for reducing the cost of diabetes care includes limiting drugs in its formulary-as other payers have done. “That was limited, though, in terms of treating diabetes and controlling costs,” says Snow. “That’s because the greatest expense in treating diabetes doesn’t come from the short-term costs of treating diabetes; rather, it’s the long-term burden of caring for people suffering from the complications associated with the disease.”

Aetna’s focus on preventing those long-term complications has led it to invest in member case management. The payer uses data analysis to determine appropriate members to include in the program, in addition to including patients who self-select or are referred by clinicians. The goal is to improve medication adherence and ensure that members are getting the appropriate therapies.

“We make sure that members are having their A1c levels checked and having their annual eye exams, because the number one cause of preventative blindness is diabetes,” he says. “We also want to make sure that folks are screened for kidney disease, since diabetes is a significant cause for renal failure, which is a very expensive condition to treat.”

Patients’ engagement with the case management team typically begins with a phone call from a case manager, says Snow. Often, that call is precipitated by an emergency room visit associated with the patient’s diabetes. The case manager-generally, a nurse hired specifically for this role-will talk to the patient about services that can help them manage their disease. These phone conversations focus on problems with patients’ medications, such as medication adherence and adverse drug reactions. Patients who are identified as less acute may receive an outreach letter, he says. “That’s because diabetes is so common that we can’t communicate directly with every person. We need to identify those who are at higher risk and intervene.”

Snow is particularly excited about a pilot program he’s working on with a device manufacturer and pharmaceutical company. The goal is to reduce the cost of care, while achieving high-quality outcomes for patients. In this partnership, the device manufacturer and the pharmaceutical company will derive part of their payment from members’ success with their solutions. The two companies are very willing to participate in the project, says Snow.

While he can’t mention the names of the companies involved in the pilot, Snow says the device maker provides glucose readers for members who should be checking their blood sugars. He points out that these aren’t the most high-tech, high-end devices, but they have been shown to be effective. “We want to make sure they have access to glucose meters and strips and that they can test at the appropriate times,” says Snow.

Aetna’s plan is to roll out this pilot project to members in the second quarter of 2016, and the long-term goal is to run the program for five years to “truly assess how members do,” says Snow. What he’ll be looking for is evidence of fewer heart attacks and strokes. In terms of scope, the payer plans to enroll 5,000 members in the pilot within a year,

“We’re looking at provider groups who work closely with us in our [accountable care organizations] ACOs,” he says. “We actually want a very diverse population involved in the pilot. The longer term goal is to determine if the program is scalable to other practices.”

With this project, Aetna is really looking to see if it can “move the needle in terms of outcomes and cost,” says Snow. That includes paying attention to patients’ A1c levels and making sure that the program has an impact on patients’ lives. “It’s not just about reducing costs,” he says. “It’s about giving patients what we believe they need, and we believe that will translate into improved outcomes down the road.”

Next: Expanded reach via telemedicine

Expanded reach via telemedicine

Hussain Mahmud, MD, an endocrinologist at University of Pittsburgh Medical Center (UPMC) agrees that the most important costs associated with diabetes are the long-term complications of not managing it-and that’s exactly what UPMC wants to address with its diabetes patients. While Mahmud notes that the cost of insulin has doubled over the last few years, he agrees with Snow that roughly half the cost on diabetes is associated with complications.

MahmudUPMC’s approach is to get a better diagnosis up front, which should translate into better control of symptoms for patients, he says. One of the key drivers of improved care for diabetes patients is making patients’ A1c levels a quality control measure, and linking that measure to provider incentives, says Mahmud.

Primary-care physicians are on the front lines in diabetes treatment, he says, while noting the challenge in addressing diabetes is particularly acute for physicians in rural areas where there isn’t as much access to specialty care. “Physicians are crammed for time and typically only have 15 or 20 minutes where they’re troubleshooting seven different things during an appointment,” he says. “Pittsburgh is the biggest city. For some parts of Pennsylvania, there’s no other big city within 150 or 200 miles; and there’s also a shortage of endocrinologists to serve patients in these rural areas.”

To address this care shortage, UPMC uses telemedicine to expand the reach of endocrinologists to rural parts of the state. A 2012 study of the program published in the Journal of Medical Internet Research included 25 rural patients whose glycemic control had been unsuccessful under their primary-care physicians’ care. These patients were then referred to an endocrinologist at UPMC in Pittsburgh, who provided care via teleconsult. Diabetes nurses were on-site with the patients and facilitated the 45-minute consult while taking the patients’ vitals.

The teleconsults included medical interviews and reviews of the patients’ laboratory data, in addition to treatment recommendations provided by the endocrinologists. After the appointment, the treatment plans-which could include medication adjustments, lifestyle modifications, self-monitoring, and laboratory tests-were then shared with the patients’ primary care physicians.

A1c levels after the teleconsults were available for 16 of the 25 patients. After the teleconsults, the proportion of patients with A1c levels higher than or equal to 8% decreased from 88% to 50%. Seventy-five percent of patients achieved a decrease in A1c levels of at least .5%, according to the study.

While there’s a cost associated with building the infrastructure behind the teleconsults, it is less expensive than trying to recruit endocrinologists to rural communities, according to researchers. They further concluded that continued success of the program would be contingent on determining appropriate reimbursement for physicians providing the teleconsults.

Next: Telephonic care coordination

Telephonic care coordination

Montefiore Medical Center is located in the Bronx, New York City, where 14% of the population has diabetes, according to the New York City Department of Health and Mental Hygiene. One way the center is addressing the diabetes challenge is through an extensive care coordination program.

PratomoVanessa Pratomo, MD, medical director for ACO quality improvement and chronic illness management at Montefiore, says diabetic patients are introduced to Montefiore’s telephonic care coordination program through a very extensive baseline interview that can take a few hours. During this interview, a care coordinator captures details about the medical background and any social, environmental, and mental health issues that may be impacting the patient’s ability to manage their diabetes. Care coordinators typically have a degree in nursing, social work, or pharmacy, according to a Montefiore spokesperson.

Understanding these aspects of patients’ lives really helps Montefiore’s care coordinators figure out what patients need to manage their disease, says Pratomo. If patients are at risk of losing their homes or they don’t have a way to get to their appointments and require special accommodations, the care coordination team can help determine solutions to those problems with various social services agencies, she says. Homelessness, for example, is a huge barrier to patients’ ability to care for themselves, says Pratomo. Care coordinators can help these patients by contacting the local housing agency to find suitable accommodations where patients can manage their illness.

The goal is to help patients manage their diabetes during the early stage of their disease to prevent the end-stage complications that entail the highest cost. If patients are having an acute issue, the care coordinator can connect them with the medical resources they need, she says. Absent an acute issue, patients typically receive a phone call from their care coordinator every month or every other month.

While Montefiore doesn’t have specific data that demonstrate the investment in telephonic care coordination led to specific outcomes with its diabetic patients, the Montefiore Pioneer ACO has saved Medicare $61 million since the start of the program, according to a spokesperson. During a time when the health system’s inpatient admission rates went down by 10.4%, inpatient readmissions for diabetes patients went down by 45.7%, she said.

Next: Long-term investments

Long-term investments

The average first-year healthcare cost for a patient with diabetes is about $500, says Sachin Jain, MD, chief medical officer at Cerritos, California-based CareMore Health System (a subsidiary of Anthem), which launched a prediabetes program in June 2015.

Members are considered for participation in the prediabetes program if they have a body mass index considered to be obese, and have physical inactivity, a family history of diabetes, and A1c levels in the prediabetic range. In addition to group support, members have access to monthly scheduled classes with a registered dietician, structured exercise programs, and visits with either a nurse practitioner or a physician assistant where labs and vital signs are taken and discussed.

Out of CareMore’s 100,000 members, 2,000 patients were identified for participation in the program, which is now based in California and Arizona. While there’s not much data available about the program at the moment, CareMore is hearing from patients that their A1c levels are returning to the normal range, some within just three months of their involvement with the program.

“CareMore believes that every hospitalization is a failure of our system,” says Jain. “It costs on average $3,000 a day for a patient to be in a hospital. It costs only $500 over six months to administer a diabetes prevention program to patients. When you think about those economics, there is a natural business case for investing in prevention. If I can avoid just one hospitalization, I’ve paid for delivering a diabetes prevention program to six patients. That’s dramatic.”

Payers hoping to better manage diabetes costs need to take a much longer term view of the patient and their relationship with the patient, says Jain. “It costs us a lot more to bring on a new member than it costs to retain a member … I think our members are with us an average of nine years. There’s an opportunity for us to both improve their health and lower the total cost of care. For managed care executives, those are magic words these days.”

Aine Cryts is a writer based in Boston.