Take Your Medicine

By Daniel Eisenberg

Since HMOs have done such a sorry job of managing care for healthy folks, how in the world are they ever going to do it for the sickest Americans? That's the vexing question facing health insurers and employers as they try to deal with the growing ranks of the chronically ill--a number that is expected to double, to close to 180 million, in the next few decades.

Though they make up 45% of the population, patients who suffer from heart disease, diabetes, asthma, AIDS and other long-term maladies account for nearly 80% of all health-care costs--often winding up in the emergency room or a hospital bed when they fail to follow their complicated medication regimen. If you are one of them, don't be surprised when your employer or health insurer introduces you to a specialist in the burgeoning field of disease management. The basic idea is relatively simple: led by a company called American Healthways, these newfangled Florence Nightingales, among them Lifemasters and Matria, help monitor the most at-risk patients.

Think of them as Big Mother. Though they don't actually practice medicine, companies like American Healthways use the Internet and other high-tech equipment to keep track of your vital statistics and your treatment, reminding you to take your medicine or schedule a follow-up exam with the doctor. On rare occasions, and at the last minute, they might even drive you to, say, a dialysis clinic if no other options are available.

In the past few months, big insurers such as Aetna, Cigna and various Blue Cross/Blue Shields have signed contracts, paying as much as $20 a month per member to have chronics looked after. Medicare and many state Medicaid programs are already experimenting with the idea. Even pharmacies and pharmaceutical firms are rolling out disease-management programs to make sure people keep popping those lucrative pills. "Less than 25% of the time, everyone in the health-care system is doing what they're supposed to do," says Richard Rakowski, president of American Healthways, whose stock has soared sevenfold, to nearly $35, in the past year. "We are an invisible hand to fill in those gaps."

Now if you don't want Big Mother lending a helping hand, you can just say no (an option not always available when Mom was in charge). But so far, most patients have jumped at the chance to get the special treatment.

Obviously, the HMOs would like to save a buck or two in the process. Although many observers are skeptical that all this hand-holding can actually cut costs, American Healthways, which is trying to market what it calls "care enhancement" to all patients, insists that insurers will save $3 for every $1 they pony up.

"The old setting of care, the traditional office visit, was created to take care of acute medical problems a century ago," says Dr. Victor Villagra, president of the Disease Management Association of America and a national medical executive at Cigna, which already has more than 600,000 members enrolled in chronic-care programs and has seen a 14% cost savings for diabetic patients who are participants. "That is no longer sufficient," he says. What is, apparently, is having someone there to tell you to take your medicine, or else.