April 20, 2020

Healthcare arbitrage #5: Disease management

Cedric Kovacs-Johnson

In the latest installment of our recurring series on healthcare arbitrage, we break down how plans can use disease management programs to reduce costs associated with chronic diseases.

Chronic diseases—such as diabetes, end-stage renal disease, and musculoskeletal disorders— can be a major cost driver for health plans. By enrolling members in the right disease management programs, a plan can significantly reduce costs. There are a variety of companies offering a wide range of disease management solutions, which are typically tailored to a specific chronic disease.

Disruption: Medium-high

Frequency: Low-medium (depending on the number of members with chronic diseases)

Impact to quality: High

Impact to cost: High

The disease management operating playbook

  1. Incorporate effective disease management solutions into the plan design.
  2. Identify members with known chronic diseases before the plan goes live, and proactively reach out to them about enrolling in a disease management program.
  3. Monitor claims in order to identify other members with chronic diseases, and reach out to them about enrolling in a disease management program.


What can go wrong

  • Missed opportunities: Many members won’t remember disease management programs that are briefly mentioned at Open Enrollment. It’s important that the plan actively engages with members around these opportunities, rather than relying on members to take the initiative on their own.

The role your TPA should play

  • Vendor coordination: Identify and incorporate vendors who can provide effective disease management.
  • Actively monitor claims: Identify members with chronic diseases, and proactively engage with them.
  • Member engagement: Reach out to members with chronic diseases, explain the benefits of the relevant disease management program, and walk them through any actions they need to take in order to participate in the program.

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