Health managers seen as way to contain costs

By Chris Jones
Associated Press

NASHVILLE, Tenn. — Bonnie Brailey started working as a nurse 42 years ago, wearing a starched white uniform and changing bedpans in a hospital.

Nurse Bonnie Brailey monitors patients' health by phone for disease management company American Healthways of Nashville, Tenn. Associated Press

"One-on-one rapport — it's a great opportunity for teaching and answering questions," said Brailey, who works for Nashville-based American Healthways, the largest disease management company in the country. American Healthways has Hawai'i offices in Kapolei.

Disease management — which monitors chronically ill patients in hopes of preventing serious complications — is one of the fastest-growing sectors in healthcare. The idea is to spend money on prevention now and avoid spending more in emergency care later for people with diabetes, asthma, congestive heart disease and other chronic conditions.

Disease management is on the verge of expansion as government and insurance companies seriously consider whether it will reduce the amount they have to pay on doctor and hospital visits.

The Medicare law enacted last year will launch 10 chronic care programs for Medicare patients this year. The pilot projects, each involving 15,000 to 30,000 people, are to last three years.

"The idea to bring disease management to Medicare would be a big opportunity" for the industry, said Brook O'Neil, senior research analyst of Dougherty & Co. in Minneapolis.

The larger disease management firms such as American Healthways and Matria Healthcare of Marietta, Ga., are in the best position to win Medicare contracts, he said. Other major companies likely to win the contracts are LifeMasters Supported SelfCare of Irvine, Calif., and CorSolution of Chicago, said analyst Glenn Garmont of First Albany Corp. in New York.

But while the business is growing, O'Neil warned there are no guarantees disease management will help the government and insurers save money.

"Some say it's not safe to spend more up front in an effort to save more money long-term," he said. "That's the biggest argument."

But Bernie Horn, policy director for the Center for Policy Alternatives, a Washington-based advocacy organization, said disease management is a great idea even if it doesn't save money.

"The primary reason has to be to make the patients better," Horn said. "There's not enough information to prove that it will work. In theory it will save money. ... This should be done, but not with the purpose to save money."

Disease management nurses use computers linked to patients' medical records. They make sure patients are getting proper care, talking about symptoms and keeping medication regimens.

Most American Healthways patients are elderly and don't mind the calls, said Sam Lewis, a clinical operations manager for American Healthways. Sometimes they are eager to speak to nurses about their illnesses. "It's like (having) a best friend that knows something about your sickness," Lewis said.

At first the nurses call to build rapport and make sure patients are being honest about their condition.

Calls that follow are health assessments, depression screenings, scheduled care checks and appointment reminders.

Some patients with more serious illnesses such as heart disease have a home monitoring system that reports their weight and blood pressure daily.

Officials of Philadelphia-based Cigna HealthCare, one of American Healthways' largest contracts, said they have used the company since 1997 and have saved two to three dollars for every dollar spent on the program.

American Healthways has gained much from the new attention paid to disease management.

Fortune Small Business magazine recently named it the fastest-growing small public company in the nation for a second year in a row.

Its third-quarter earnings were up 64 percent this year, and the company expects revenue in the range of $245 million to $255 million for the 2004 fiscal year.

The company went public in 1991 with just a few call centers. Now it has nearly 1,300 registered nurses, dietitians and therapists working out of centers in Hawai'i; Nashville; Eagan, Minn.; Baltimore; Phoenix; Pittsburgh; St. Louis and Seattle.