Disease Management Can Reduce the Variation Between El Paso and McAllen Texas

It took a while, but the Disease Management Care Blog finally caught up with this follow-up study on the contrast in health care costs between the Texas towns of McAllen and El Paso. As readers may recall, the June 2009 New Yorker exposé on McAllen's "culture of money" allegedly demonstrated all that was wrong with fee-for-service medicine. It also provided the White House with the intellectual "must reading" underpinnings for passage of Affordable Care Act.

Fast forward to this Health Affairs study. The study objective was simple: if Medicare's costs for McAllen vs. El Paso were out of control, the same should be true for other health insurance plans. That's what authors Luisa Franzini, Osam Mikhail and Jonathan Skinner anticipated when they obtained Blue Cross Blue Shield (BCBS) of Texas preferred provider organization (PPO) and point of service (POS) plan 2008 claims data for over 65,000 enrollees in each city and contrasted the results with Medicare data.

While they confirmed that McAllen's Medicare overall costs were 86% higher compared to El Paso, the BCBS data surprisingly showed that its McAllen's claims expense was 7% lower compared to El Paso's. For the BCBS enrollees that were between ages 50 and 64, the claims trended toward the Medicare pattern. For this group, overall spending was 89% higher in McAllen. This was mostly accounted for by higher levels of inpatient spending that was 117% higher versus El Paso; it was offset by lower use of outpatient services.

While the authors recognized that there were important contrasts in how Medicare and BCBS function, that health care costs can be highly variable and that there may be other demographic or socioeconomic dynamics at play, the authors also pointed to the Texas BCBS' use of population health management along with basic utilization management as another factor that allowed it to avoid Medicare's fate:

"....members with high-severity and high-expense conditions are contacted by a Blue Care adviser, who encourages members to participate in management programs. Chronic conditions and complex cases are managed through a variety of condition-specific management programs based on evidence-based interventions"

You can read more about these programs here and here. While the Medicare Health Support pilot suggested that disease management wouldn't work for fee-for-service Medicare, the success of this particular BCBS plan in a hotbed of over-utilization suggests this may be an approach that has yet to be adequately tested among Medicare beneficiaries.

In lieu of PHM, the New Yorker-reading Feds appear to be banking on the patient centered medical home and accountable care organizations as the way out from the dysfunctions of an entitlement program hooked on fee-for-service. Can either of these match the Blues' blocking and tackling with their population health and care management programs?

Check back with the DMCB to find out. In the meantime, if readers learn anything, please share.