Two Companies Sign ‘Unusual’ Disease Management Contract
Blue Cross and Blue Shield of Minnesota and American Healthways Inc. expect to announce today an "unusual" 10-year contract in which American Healthways will help manage the care of BCBS' patients with heart disease, diabetes, asthma and other chronic diseases, the Wall Street Journal reports. The length of the contract and American Healthways' plan to handle more than 15 illnesses make the deal "unusual" and a "significant advance" in the field of disease management, according to the Journal. Typically, disease management companies have worked with just one disease, the Journal reports. American Healthways will employ registered nurses to work with patients via telephone to encourage them to take their medications, to get necessary follow-ups and to use other techniques to manage the symptoms of their illness and follow doctors' recommendations. The nurses will have access to patients' electronic medical records, where they can track medical claims, drug prescriptions and lab tests. The Journal reports that the contract comes as employers are looking for ways to cut medical costs. Officials from both companies say emphasizing preventive medicine offers a way to decrease expenses while improving care. At first, the program will be centered around "the 15% to 20% of the population that drives 75% to 80% of the medical costs," Mark Banks, president and CEO of BCBS of Minnesota, said. However, over the 10-year contract, the companies plan to initiate services for all of BCBS of Minnesota's 2.1 million members. "This is really the next evolution of where health plans should go to try to improve the health of our members and through that, lower costs," Banks said. Terms of the contract were not disclosed, but Thomas Cigarran, Chair and CEO of American Healthways, said the fees paid over the length of the contract could amount to between $200 million and $300 million, depending on "cost savings" and the performance of the company "on a variety of measures," including "evidence that patients' health improved and that they were satisfied with the program."
The Journal reports that both BCBS of Minnesota and American Healthways will "face challenges" during the length of the contract. "[D]octors and patients alike ... may be skeptical" about whether "cost-saving strategies" are "good for care," the Journal reports. However, "in part to address that issue," the companies said that researchers at Johns Hopkins Medical Institutions will evaluate the program's costs and outcomes. Both companies have said the Hopkins researchers "are free to publish [their findings] in medical journals, whether the results are favorable or not" (Winslow, Wall Street Journal, 12/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.