tions, and does very little to mitigate the progression of disease. Second is the misappropriation of education—that is, patients need to be activated to change their behaviors rather than to merely be given information. Lastly, there is an overreliance on coming to the health care provider for chronic disease management. Instead of waiting for patients to present with exacerbated symptoms, health care providers need to approach chronic disease proactively.

The Cost of Chronic Disease

Chronic disease accounts for the vast majority of health care spending. However, chronically ill patients only receive a little more than half of all clinically recommended health care, and there is a lag between the establishment of evidence and the adoption of a new care pattern. Half of the people on Medicare right now only cost $550 per year or less, which means that the other half is very expensive. For example, in 2007 the annual average expenditure for Medicare beneficiaries with heart failure was about $25,000; it was about $20,000 for beneficiaries with chronic obstructive pulmonary disease, and about $13,000 for beneficiaries with diabetes. ED visits and hospitalizations account for 83 percent of the cost of chronic care in the Medicare population. Chronic care management interventions can dramatically reduce costs and improve health by keeping individuals out of EDs and hospitals.

Experiences of the Iowa Chronic Care Consortium

Telehome Care Models

A large health system asked the Iowa Chronic Care Consortium (ICCC) to design a heart failure program for their Medicaid population. At the start of the project, the 266 Medicaid heart failure patients had an annual cost of $24,000 each. The ICCC used daily contact and care management, all by phone. The program led to a net savings in excess of $3 million in the study cohort, primarily due to avoided hospitalizations (see Figure 6-1). This was demonstrated through a matched cohort study design, wherein the matched cohort had an increase in costs of $2 million during the same time period.

Similarly, the ICCC’s Medicaid Diabetes Telehomecare Project led to a 54 percent reduction in inpatient visits, a 13 percent reduction in outpatient visits, and a 6 percent reduction in office visits among the study cohort as compared to the match cohort (see Figure 6-2). This resulted in an overall reduction in costs of about 20 percent. Sometimes these interventions led to an increase in the number of office visits, but they are so much less costly than a hospitalization that costs are still greatly reduced.

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