Are Commercial Disease Managers Willing and Prepared to Enter the Medicare Market?

Abstract

Recently, the public policy debate on Medicare reform has turned to adding a prescription drug benefit. Currently, approximately a third of Medicare beneficiaries lack pharmaceutical coverage. Lack of coverage appears to be particularly detrimental to the chronically ill Medicare subpopulation that often needs prescription medications on a daily basis.

Several Congressional proposals would establish disease management demonstration projects concurrently with a prescription drug benefit. Theoretically, implementation of disease management programs that improve coordination of drug therapy with hospital and physician care services would contribute to a more cost-effective drug benefit.

This paper presents results from a Tufts Center for the Study of Drug Development survey describing current disease management practice in the United States. The survey results suggest willingness on the part of commercial disease managers to negotiate performance- and (insurance) risk-based contracts with Medicare. However, at present, disease managers enroll only a small number of Medicare beneficiaries; less than 20% of their total enrollment. Disease managers also have very limited experience with government agency contracts, which comprise less than 5% of their total contracts. In addition, comparatively few disease managers surveyed focus specifically on diseases that are highly prevalent among Medicare beneficiaries, such as Parkinson’s, Alzheimer’s, End-Stage Renal Disease, and Chronic Obstructive Pulmonary Disease. These survey findings suggest that disease managers are not currently fully prepared to enter the Medicare market en masse.