Duke - The Fuqua School of Business

News Release

Florida Disease Management Program Provides Key Insights for New Initiatives in Medicaid and Medicare

March 28, 2005

A graphic for press use appears below.

Challenges Faced by Florida DM Programs, As Identified by Interviewees

Uniqueness of Medicaid Population

Unique Challenge

More mobile, less likely to have home phone

Inhibits the state maintaining accurate contact information

Less trusting of unsolicited calls (e.g., fearful it is a bill collector, uncertain of why care manager would know about their health status)

Contacting and establishing relationship over the phone is difficult

Lower health literacy, language barriers

Makes communication more difficult, may interfere with effective telephonic coaching and educating through written materials

Inflexible work schedules (minimal ability to address personal issues during business hours)

Harder to contact during the daytime

More likely to seek treatment in the emergency department

Higher rates of mental illness, more social/psychological issues

Patients may be unable to understanding health issues or have more poignant life crises to address

Poor experience with health providers in the past

Less trustful of providers

Medicaid is an entitlement program so the state cannot refuse to pay for covered services unlike the private sector

Unable to use financial incentives to alter utilization behavior

Often live in areas were environmental factors outside of their control exacerbate their health condition

More difficult to address factors contributing to illness

Graphic attribution: The Health Strategies Consultancy and Duke University


Washington, DC – Private sector disease management programs designed to improve health outcomes and reduce health care spending need to be fundamentally changed to address the unique needs of low-income Medicaid and Medicare beneficiaries, says new research released today by Health Strategies Consultancy and Duke University.

The findings, released today at a national Medicaid Conference sponsored by Health Strategies, were based on interviews with 27 key stakeholders who interacted with the Florida: A Healthy State program, including care managers, program administrators, medical directors, state officials, disease groups, and other community organizations. Disease management (DM) has shown potential to improve the health of chronically ill patients and reduce the costs of health care delivery in the private sector, and federal and state officials are committed to testing whether it can accomplish the same goals in the Medicaid and Medicare programs.

“Everyone wants disease management to work in public programs, to improve patient outcomes and help keep costs under control,” said Chiquita White, a Medicaid expert at Health Strategies and lead author of the study. “Unique characteristics of low-income populations, such as increased mobility, lower health literacy, language barriers, and data limitations about their past medical histories, change the way disease management should be designed, delivered, and measured in these programs.”

Florida was one of the first states to implement Medicaid DM programs. The Florida: A Healthy State initiative is the state’s most recent attempt to refine and improve the effectiveness care coordination for a large group of Medicaid beneficiaries. The state’s Agency for Health Care Administration identified beneficiaries with at least one of four diseases (asthma, diabetes, congestive heart failure or hypertension) who were high utilizers of specific medical services, and the program was administered by an outside contractor, Pfizer Health Solutions.

In interviewing care managers and other program stakeholders, the Health Strategies/Duke team found that Medicaid beneficiaries tend to be more mobile, be less trusting of outsiders, have lower literacy, and have poorer health than their counterparts in private health care. As a result, care managers had difficulty contacting beneficiaries and educating them about their disease. The Florida program had to develop entirely new health education materials – written in two languages and at the fourth grade level – to assist with their DM efforts, and be willing to use more unconventional methods to contact and interact with their patients.

“Some of the greatest successes came from the state’s flexible approach to providing care, and its ability to tailor its services to the patient,” said Kevin Schulman, MD, professor of medicine and business administration, Duke University Medical Center and the Fuqua School of Business. “They realized if a person is about to be evicted from their home, they must first help them with that life crisis before they can get the patient focused on their health.”

Difficulties encountered by the program included achieving medical provider buy-in, short-term evaluation of programs aimed at long-term improvements in health status, and difficulties maintaining political support in light of uncertainty about cost effects.

The report notes that 61 percent of adult Medicaid enrollees have chronic or disabling conditions and that these patients are 15 times as expensive to treat ($6,672 annually) as beneficiaries without such conditions ($432 annually). Between 2002 and 2005, 42 states began or plan to begin Medicaid DM and case management programs with the aim of reducing the overall health care costs of patients with chronic diseases by avoiding unnecessary utilization of acute care services.

“Our analysis of the Florida program has critical implications for health plans structuring new Medicare Advantage and Prescription Drug Plan program offerings,” said Dan Mendelson, president of Health Strategies and co-author of the report. “The Medicare Modernization Act requires that plans structure Medication Therapy Management Programs for many of these same populations. Our report provides important lessons for the plans, as well as for policy makers evaluating their bids.”  

The research was funded through an unrestricted educational grant from Pfizer Health Solutions to Duke University.