Revenue Cycle Management Journal Source: The Academy of Healthcare Revenue
Patient-Centered Case Management Shown to Reduce Costs, Increase Satisfaction
Some of the most expensive cases for providers to treat are for those patients with multiple comorbidities or chronic conditions. These patients often require constant care and collectively represent a significant proportion of total U.S. healthcare spending. In fact, multiple comorbidities are prevalent in one per 1,000 privately insured patients and approximately five to tenfold higher in the Medicare population. 1 This is very concerning to many revenue cycle leaders since treatment for Medicare patients is paid using the DRG system, and not based on costs. As a result, providers that can successfully reduce the total costs of treating Medicare or Medicaid patients with multiple comorbid states will be able to realize direct savings.
Many providers have implemented case management programs to better coordinate care for these patients, allowing hospitals to provide better care at a reduced cost. However, many traditional case management programs are predominately centered on services and may not be able to effectively follow a patient throughout a prolonged period of care. A recent study comparing traditional case management with patient-centered management (PCM)—a more comprehensive version of case management involving end-of-life and pain management, education, provider coordination, and patient advocacy—found that PCM could effectively reduce costs for treating patients with chronic conditions without compromising life expectancy or patient satisfaction.2
The study analyzed the impact of a PCM program administered by a Blue Shield HMO to patients with late stage illnesses, such as cancer or degenerative neurologic conditions. This is one of the first studies done to quantify the amount of cost reductions resulting from patient participation in an expanded case management program. In the study, patients that participated in the PCM program had access to a nurse care manager, a nurse team manager, and a physician through a private company. Nurse team members made home visits, called patients an average of two times per week, and worked closely with patients to understand their disease states and treatment options. PCM emphasizes the coordination and selection of healthcare services from the patient’s perspective, so that the patient is predominately making the care decisions rather than a case manager.
The cost savings from PCM were realized as a result of changes in patient behavior and a reduction in unnecessary treatments. The study found that patients in the PCM program had 38 percent fewer hospital admissions, reduced hospital lengths-of-stay by 36 percent, and reduced ED visits by 30 percent. The study also found that the PCM group analyzed had average treatment costs of $49,742 per patient compared to $68,341 per patient in the group participating in traditional case management programs—resulting in an average savings of $18,599 per patient.3 Even though many of the patients with late stage illnesses (such as cancer) in the PCM initiative chose to avoid extensive chemotherapy or other treatments, their lifespans were not shortened as a result.
Although the study analyzed the cost savings for a private payer, providers can also achieve cost savings from expanded case management programs. Ultimately, when patients who have regular contact with case managers receive education on their disease states and their treatment options, and are given control over their healthcare decisions, providers are more likely to achieve lower costs while increasing patient satisfaction. This is especially important for Medicare patients, a group that is more likely to have multiple comorbidities, since Medicare reimbursements do not typically cover the true costs of care. By focusing case management on ensuring that patients follow all treatment regimens and avoid unnecessary treatments or ED visits, providers may be able to realize substantial savings. 1 Latanya Sweeney et. al., “Patient-Centered Management of Complex Patients Can Reduce Costs Without Shortening Life,” American Journal of Managed Care, February 2007. 2 Ibid. 3 “Blue Shield Case Management Program for Serious Illnesses Improves Health Outcomes, Increases Patient Satisfaction and Reduces Costs,” PRNewswire, 12 February 2007.
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The Academy of Healthcare Revenue is a membership-based community that provides healthcare leaders with objective research focused specifically on the healthcare revenue cycle. Members receive an unlimited supply of all research--including benchmarking and best practice reports, implementation tools, monthly journals, attendance to virtual conferences, and more--designed to enable them to improve their revenue cycle processes and financial health from within. Furthermore, The Academy's membership offering is tailored to team members throughout the revenue cycle, from executive leadership to patient access, coding, billing and collections, and clinical staff, helping to drive process improvement efforts revenue cycle-wide. Revenue Cycle Management is one of four journals written by The Academy of Healthcare Revenue monthly.
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