Disease Management: In-source, Outsource, or Hybrid?
Should anyone be surprised that health plans are exploring the most cost-effective ways to provide disease management (DM)?
Questions abound about whether DM is cost-effective so it only makes sense that health plans would look to provide those services in-house. Whether the grass is actually greener on the other (in-sourcing) side though is still in question.
Two Minnesota-based health plans, Blue Cross Blue Shield of Minnesota and Medica are the latest to announce they are in-sourcing DM services. BCBS of MN announced it is severing ties with Healthways and will begin offering in-house DM programs in January 2009.
Health plans that are in-sourcing DM programs point to the following:
- In-sourced programs allow the health plan to have more control over its members
- It allows for quicker program changes without having to deal with an outside vendor
- It provides faster outreach to at-risk members
- The health plan already has relationships with physicians that can spark greater collaboration than a third-party vendor
In place of Healthways' DM products, Blue Cross Blue Shield will offer its Whole Person Health Support program, which goes beyond traditional DM and is more expansive in the areas of identification and stratification, consent and engagement, and integration.
Moving those services in-house creates an integrated program that doesn't involve outside vendors.
"It's easier for us to deliver Whole Person Health Support with our in-sourced programs because we don't have handoffs, we don't have data being sent to outsourced programs. It's fully integrated," says David Plocher, MD, chief medical officer and senior vice president of health management and informatics at BCBS of MN.
BCBS of MN's plan is to in-source the majority of DM services in January and gradually move the remaining programs in-house later. Two programs that BCBS will continue to outsource at least temporarily are online health assessment and a nurse triage line.
Blue Cross will hire between 80 and 100 employees to handle the Whole Person Health Support services, a majority of whom will staff a nurse call-center. The health plan is also investing in technology for the call-center and decision health platform. BCBS of MN is following the lead of other health plans that have brought DM in-house. Horizon Blue Cross Blue Shield of New Jersey took over its asthma and chronic obstructive pulmonary disorder DM programs in 2003. It has since added DM programs with telephonic health nurses for patients with chronic kidney disease, diabetes, hepatitis C, multiple sclerosis, heart failure, coronary artery disease, and patients with weight management problems. Over the past five years, Horizon's DM department has grown to more than 100 employees who serve about 185,000 members.
Though health plans like Horizon and BCBS of MN see in-sourcing as a better alternative, there are other plans with in-house DM programs that are looking to outsource those services. There are still others that are searching for the right mix of in-sourced and outsourced programs.
Many DM vendors see the in-sourcing movement as a negative because they believe it means less business, but there are others who view it as an opportunity. One example is Health Dialog in Boston.
Instead of getting defensive and demanding that health plans take bundled DM services, Health Dialog offers programs a la carte. George Bennett, chairman and CEO of Health Dialog, a health management company, says his company is as interested in licensing intellectual property as it is in outsourcing. A large portion of the firm's resources are focused on predictive modeling, reaching and engaging members, developing sophisticated software tools, and licensing property.
That business model is working—Health Dialog is expected to grow 30% this year, breaking the $300 million mark.
The future of DM is very much in flux, and which is the best way to offer these services while containing costs and improving outcomes is debatable. The managed care landscape will remain fluid until health plans figure and DM companies figure out the best ways to offer these kinds of services. My money (particularly for the small and mid-sized health plans) is on the collaborative approach.
Les Masterson is senior editor of Health Plan Insider. He can be reached at firstname.lastname@example.org .
Note: You can sign up to receive Health Plan Insider, a free weekly e-newsletter designed to bring breaking news and analysis of important developments at health plans and other managed care organizations to your inbox.
- Ebola: Health Officials Try to Quell Front Line Fears
- Reducing Readmissions Starts with Better Collaboration
- Ebola: A New Normal in Dallas
- Partners HealthCare M&A Deal Under Scrutiny
- Readmissions: No Quick Fix to Costly Hospital Challenge
- How Educated Nurses Save Money
- As virus spreads, insurers exclude Ebola from new policies
- 'Overtreatment' Debate Circles Back to Lung Cancer Screening
- Defensive Medicine Still Prevalent Despite Tort Reform
- After Ebola patient cured, NE hospital takes cautions anew