Disease management and the Medicare Modernization Act: "It's the insurance, stupid"

While definitions of "disease management" (DM) emphasize quality of care for populations with chronic illness, proponents argue it reduces healthcare costs. Buyers may find disease management organizations' (DMOs') use of clinical guidelines, physician collaboration, and promotion of patient self-management intuitively sound, but it is performance guarantees, combined with retrospective effectiveness cost studies, that have driven DMOs' penetration of the commercial insurance market with revenues that exceed $500 million per year. The success of DMOs contributed to the creation of the Chronic Care Improvement Program (CCIP), which is designed to prospectively test the impact of DM on both the quality and cost of care for fee-for-service Medicare beneficiaries with chronic illness. This may lead to an expansion of DM in Medicare, and even greater opportunities for DMOs beyond the $10 billion in 10- year projected growth. For community-based physicians caring for patients with chronic illness, the sharpened focus on chronic care and the growth of DMOs creates some potential advantages. These include more time to treat more patients with acute illness, lower practice costs, opportunities to collaborate over quality, and a greater ability to achieve quality targets set by pay-for-performance arrangements.