Anil Bhaskar

Invited Guest Article

Overview : Disease Management Drivers

The healthcare industry in the US is estimated at $ 1.3 Trillion and growing at an annual rate of about 10%. The United States Government Accounting Office (GAO) estimates that as much as $ 340 Billion is wasted annually on unnecessary utilization, duplication of services and fraud (study by Forrester Research Group).

Patient Non-Compliance alone accounts for over $ 100 Billion annually (source: BTAB/ Managed Care 94). This wasteful expenditure is a savings and a market opportunity.

Chronic diseases like Diabetes and Hypertension rank high in medical non-compliance owing to their non-symptomatic nature. Since these diseases affect over 50 Million Americans, there is a huge opportunity to cut healthcare costs as well as improve management of the diseases by the application of disease management techniques.

With a majority of the "baby boomer" generation moving into the seniors age category, the rise in chronic diseases like diabetes and hypertension is substantial. Chronic diseases like these also

A few sample statistics:


Rate of Non-Compliance


40% to 50%




55% to 71%



Organ Transplant






Diabetes Sample Statistics (source: NIH and CDC)

Prevalence in the US

15.6 Million Diabetic patients


Seventh leading cause of death

Non-compliance rate

40% to 50%


Hypertension Sample Statistics (source: NIH and CDC)

Prevalence in the US

50 Million Hypertension Patients.23% of people between ages 20-74 and 64% of men beyond age 75


5 deaths in every 100,000

Economic Impact

33.3 Million ambulatory visits a year

Non-compliance rate


Patient Non-Compliance: Where and Why

Where ?

As is clear from the diagram above, patient non-compliance occurs everywhere and anywhere. Once a patient leaves a doctor's office or is discharged from the hospital, the patient (and his/her family) is primarily responsible for following through the guidelines of treatment laid down by the healthcare provider.

However, this also happens to be the venue for patient non-compliance. Patient non-compliance can be in various degrees from missing a few dosages of medication to complete negligence; accordingly are the consequences: health-wise and financial.

Typically in non-symptomatic and chronic life threatening diseases like diabetes, hypertension, etc., the tendency for patient non-compliance is very high. In diseases like Arthritis, the incidence of patient non-compliance is very low, since the "symptom" in this case pain, is a constant reckoner.

Why ?

Since the whole area of patient non-compliance and disease management is relatively new, no historical statistics are available on the trend.

However with constantly increasing healthcare costs, this issue has most definitely come to the forefront. Since this issue also provides substantial economic justification (read incentive) healthcare companies have now become very actively involved in research and innovation in this area.

While patient non-compliance is commonly viewed as a "behavioral issue" and is widely credited to omni-present human trait of "forgetfulness", the following statistics may help view its presence with more understanding:

Average physician-patient interaction has reduced from 22 minutes in the 70s to 8 minutes in the 90s. With the advent of HMO (health management organizations) and continual reduction in reimbursement, the highest squeeze is on the patient interaction time.

Average LOS (length of stay) in hospitals has been reduced from 8 days in the 80s to 3 days in the 90s, with hospitals continually trying to reduce LOS to ensure that they stay out the red.

15% of hypertensive prescriptions written in the US, never even get filled. Visualize a patient who felt the need to go to a doctor, gets diagnosed with hypertension and never bothers to go the pharmacy to actually pick-up his prescription.

With nearly 16% of US citizens without healthcare insurance coverage, patient's financial condition is often attributed as a primary cause for patient non-compliance. While this cause can't be completely ruled out, patient behavior has finally been accepted as a primary cause for patient non-compliance.

This is where the disease management industry has evolved.

Modification of patient behaviour and provide them tools to manage their disease better via Patient Education and Real Time Intervention.

Disease Management: Methods and Tools

In the US, the current leaders in this industry are companies like American Healthways, Matria, Q-Med, Life Masters,etc.

Each company has "invented" their own unique method as their claim to fame. However, essentially disease management companies can be classified as :

Conventional Disease Management Companies

New-Age, Automated Tools Companies

Self Assisted Living Companies (which combine both of the above).

With demand and competition in this industry it is becoming increasingly difficult to find a company, which is purely adhering to any one single method or tool.

While conventional disease management companies extended the concept of "case management" and re-packaged the same as "disease management". Case management (which is an expensive proposition) was reserved for the critically ill or patients requiring acute care, where the management of the disease required constant medical expertise.

This included patients have complex surgeries, patients requiring dialysis, etc. 

However, using the same building blocks of case management, companies such as American Healthways paved the path for disease management. Here they would be manage patients suffering with chronic illnesses such as diabetes, asthma and hypertension which typically don't require acute care if managed properly.

The two primary differences between case management and disease management are :

Intensity of Management

Technique : While case management is extended acute care, disease management aims to execute behavior change via subtle persuasion.

Conventional Disease Management Involves :

  1. Generation of a Disease and Demographic Specific Program which also includes "decision algorithms" which guide on individual management.

  2. Case Workers (typically nurses and triage professionals) regularly make telephone calls to patients and use these interactions for "patient education" and subtle data collection.

  3. Depending on this data collected and other lab data, the decision algorithms guide on the frequency of the calls, tone of caller, script of the call, etc. 

  4. Patient Education Material: Written material, patient seminars, videos, emails, etc.

  5. Incentive Programs (for patients):

e.g. A patient may actually get a free glucose meter or a free blood pressure meter or free movie tickets for attending a seminar on management of diabetes or completing q questionnaire, etc. Patients with specific disease and behavior profile would be invited to this seminar and most definitely keeping the patient out of the emergency room once pays for 40 movie tickets. That is the return on investment (ROI) for the incentive program.

Automated Tools based Disease Management Involves :

  1. Real-time data collection. 

  2. Software Algorithms. 

  3. Alerts and Escalation Protocols. 

  4. Reminder Modes (Phone, Page, Custom Devices, 911, etc.)

An example is discussed on the next page.

The following chart provides the flow for a tool called Compliance Engine powered by PanHealth, Inc.; a Livingston NJ based company creating Automated Tools for disease management.


The above two figures provides tools created by PanHealth which assist in real-time collection of data from patient homes.

The following is a industry snap-shot showing various companies with different tools for Real time Data Collection and Disease Management

With high labour costs in the US (basic salary $ 70K to $ 100K pa for a nurse) and with a nurse being able to handle around 200 to 400 patients, 100% deployment of conventional disease management is still an expensive proposition.

Company Product Interactive Voice Paper/SMS Based Mobile Device (Resident) Custom Device  Web Based Health Log One way/ two way Interfaces Integration Cost of Service Target Customer
PanHealth Compliance Engine  Yes Yes  Yes (K-Java)


Yes Yes Yes Two Way Patient, Physician, Pharmacy, Hospital, Devices  Seamless Integration Extremely Affordable Pharmaceutical Companies, Health Plans and DM Companies
Health Hero Health Buddy No No No Yes Yes No Two Way Patient, Physician, Devices  Partially Integrated Expensive  Health Plans  
Tele ox Inc. House Calls/ Lab Calls Yes No No No No No Two Way Patient None Affordable Physicians
Verbaprompt Verbaprompt Yes No         One Way Patient None Expensive Patients
Medprompt MedPrompt No Yes No No No No One Way Patient None Affordable Patients
PageMinder PageMinder No Yes No No No No One Way Patient None Affordable Patient
M-Plify, SA M-Pill No Yes No No Yes No Two Way Patient, Clinical Trials, Physicians Partially Integrated Expensive Pharmaceutical Companies, Physicians, Patients
HomMed Inc. HomMed No No No Yes No No Two Way Patient, Physicians, Devices Highly Integrated Highly Expensive Nursing Homes
e-Pill iMD2 Pill Dispenser No No No Yes No No One Way Patient, Support Centre Only Feedback to Support Centre Expensive Patients
e-Pill Pager Medication Reminders No Yes (one way) No No No No One Way Patient No Integration Fairly Expensive Patients
Mobile Fitness Diary SMS Reminders No Yes No No Yes No One Way Patient No Integration   Patients
Aardex Ltd. Medical Even Monitoring Systems (MEMs) No No No Yes No No One Way Clinical Trials Management Integration to Remote Server Via Computer/ Phone Line   Pharmaceutical Companies
Disease Mgmt. Companies AHMC/ Matria/ Q- Med Actual Person (registered nurse) calling     T       Health Plans

While automated tools are able to bring down the costs substantially and offer a scalable alternative, automated tools have limited success in making "subjective" interpretation of a conversation and are not as effective in bringing about the aimed behavior change

All companies in this industry are currently evolving through trial and error the right blend of costs and human involvement to eventually achieve successful disease management.

Deployment Drivers

Currently deployment initiatives are dominated by Health Insurance Companies and the government.

However disease management while highly philanthropic in its appearance has posed a challenge for private insurance companies. It is found in the US that a person changes a health insurance company every 2 ½ years.

The dilemma faced by health insurance company is that it would be investing in the "better" health of an individual who would move to a different insurer in 2 years and it would be this new insurance company enjoying the economic benefits.

Health insurers are slowly and steadily noticing the overall good in the concept of disease management and with contracts such as 12 million lives signed by Blue Cross Blue Shield of MN, under a disease management program by American Healthways is definitely a great sign for the industry.

The pharmaceutical is also gearing up to the idea of disease management since for them it is recovering lost revenue. With tremendous medical non-compliance the pharmaceutical company is loosing revenue, since the patient does not fill / re-fill his/her prescription. With improvement in compliance they expect their revenues to increase.

In conclusion, a success story.

Implemented at Medicaid of Florida by Healthmasters.

3000 patients with history of congestive heart failure were enrolled into a disease management program. Automated tools were used to collect weight and medication consumption details on a daily basis. Caseworkers periodically counseled the patients providing them support on better managing their disease.

Over a 12 month period, there was a 22% increase in drug consumption cost but overall costs savings of 20%.

That is more incentive than required for this industry to flourish.

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