DMPC Announces the 2006 Winners of the Disease Management Intelligent Design AwardsTM
WELLESLEY, Mass.--(BUSINESS WIRE)--The Disease Management Purchasing Consortium (DMPC), the most comprehensive source of information about the disease management industry, announced today the winners of the “2006 Disease Management (DM) Intelligent Design Awards,” given annually to those contributions which most set back the evolution of the disease management and wellness fields. Just as engineers say that more is learned from a single bridge which collapses than from 100 which stay up, there are serious lessons to be learned from these often-humorous failures.
“(There is a) guaranteed...ROI of 1.05, or 100% of the program cost...plus at least a 5% net savings through reduced medical costs.”
First place is awarded to Trestletree for the claim on its website that it “reduced absenteeism by 300%.” The winning screenshot (it is fifth in succession on the rotating www.trestletree.com home page, as of this writing) is also available from DMPC.
The lesson: This is perhaps the most glaring example of the DM/wellness field’s rampant innumeracy – its willingness to accept results which are either mathematically or epidemiologically impossible or which, within the report, contain self-contradictions. DMPC is responding to this by offering Certification for Outcomes Reporting/Analysis. Details will be following very early in 2007.
Second place goes to the well-publicized failure of the Mississippi Medicaid RFP, an RFP that the state was urged unsuccessfully by multiple experts to withdraw and rewrite early on. Most of any Medicaid RFP is boilerplate, so the analysis will begin with Section 3.3.7, which states: “(There is a) guaranteed...ROI of 1.05, or 100% of the program cost...plus at least a 5% net savings through reduced medical costs.”
The problem, as any disease management professional can quickly ascertain, is that this clause is not just ambiguous but rather self-contradictory; as when Casey Stengel told his Mets players to “line up alphabetically by height.”
Is the ROI 1.05, as the first part of the sentence says (and is a very easy target to hit), or is it 5% (500 basis points) above the cost of the program, which is equivalent to roughly a 2x ROI, which the second half of the sentence implies? The difference between a 1.05x and a 2x guaranteed ROI in a $10,000,000/year program is roughly $9,500,000.
Obviously these two ROI goals are very different. One can be easily achieved while the other is much harder. In the bidders’ conference, the state declined to answer the question, instead referring bidders back to the sentence itself.
While also another example of innumeracy, the specific lesson here is that states ought to read other state Medicaid RFPs before sending out their own. Georgia, Illinois and Wyoming are the three which have won awards from the Health Industries Research Co. All state Medicaid RFPs are in the public domain. A little research into what works and what doesn’t hugely facilitates the RFP process and prevents the embarrassment of a failed RFP. The DMPC report “Lessons Learned from Failed Medicaid DM RFPs” is available free to any state which requests it, as well as to any DMPC member.
An honorable mention goes to Indiana Medicaid’s internal disease management program. It produced an alleged 12:1 ROI in heart failure, projecting to $39,000,000 in annual savings. Unfortunately, this number would be difficult to achieve because this is more than the state spends in heart failure hospitalization for the disabled population and more than Georgia, a somewhat larger state which procured savings very effectively, is guaranteed to save in all conditions combined. There is also a simple but critical basic arithmetic mistake in their congestive heart failure (CHF) outcomes. The slides are available from DMPC and also (as of this writing) from Indiana.
The reason Indiana Medicaid is only an honorable mention is that it has now withdrawn these slides claiming any outcomes. Instead, in December 2006, it presented its 180-person pilot ending in September 2005 which it said “may have had some positive effect” and that it will be studying for “several years;” while most other states, which are outsourcing, count their savings and monitor their improved outcomes.
Besides being another example of innumeracy, there are two other lessons. First, apply a “plausibility check” before presenting numbers. A very high savings estimate should be checked against total relevant spending, for example. Second, states should outsource their disease management. A state is not a business and, as Indiana’s experience illustrates, is not set up for large-scale (or even small-scale) DM programs implementations and sophisticated (or even simple) program measurement. Also, it is harder to evaluate a 180-person study than it is to evaluate the entire disabled population, where a bend in the trend can be readily ascertained.
About the Disease Management Purchasing Consortium
The Disease Management Purchasing Consortium Int’l, Inc. (DMPC) provides strategy and procurement services to support the disease management and wellness efforts of more than a hundred health plans, employers and states. The DMPC is led by Al Lewis, widely accepted as the founder and most influential leader in the disease management industry. Associate members include national health care accreditation organizations such as JCAHO and URAC, the Harvard School of Public Health, Bain & Co., Boston Consulting Group and McKinsey, and eight investment banks. DMPC also offers Certifications in Savings Measurement Validity, Small Group Outcomes Measurement, and Critical Outcomes Report Analysis. Programs and services are available at www.dismgmt.com.