The Business Case for Diabetes Disease Management for Managed Care Organizations
AbstractDiabetes is a common and very costly chronic disease. There is broad-based agreement on how to manage diabetes, yet less than 40% of adults with diabetes achieve guideline-recommended levels of medical care. We investigate the reasons for this phenomenon by examining the business case for improved diabetes care from the perspective of a single health plan (HealthPartners of Minnesota). The potential benefits accruing to a health plan from diabetes disease management include medical care cost savings and higher premiums. The potential costs to the health plan derive from disease management program costs and adverse selection. We find that the implementation of diabetes disease management coincided with large health improvements. For a defined population of diabetes patients, medical care cost savings over several years were small in the closed panel medical group but moderate for the health plan overall. We find evidence that adverse selection and the timing of cost and benefits worsen the health plan business case. In addition, the payment systems, from purchaser to health plan and health plan to provider, are very weakly connected to the quality of diabetes care, further weakening the business case. Finally, overlapping provider networks create a public goods externality that limits the health plans ability to privately capture the benefits from its investments. Nonetheless, it is clear that improved diabetes care affords economic benefits to health plans as well as valuable quality of life benefits to adults with diabetes.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by De Gruyter in its journal Forum for Health Economics & Policy.
Volume (Year): 9 (2006)
Issue (Month): 1 (December)
Contact details of provider:
Web page: http://www.degruyter.com
Other versions of this item:
- Nancy Beaulieu & David M. Cutler & Katherine Ho, 2006. "The Business Case for Diabetes Disease Management for Managed Care Organizations," NBER Chapters, in: Frontiers in Health Policy Research, Volume 9 National Bureau of Economic Research, Inc.
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Jonathan C. Javitt & James B. Rebitzer & Lonny Reisman, 2007.
"Information Technology and Medical Missteps: Evidence from a Randomized Trial,"
NBER Working Papers
13493, National Bureau of Economic Research, Inc.
- Javitt, Jonathan C. & Rebitzer, James B. & Reisman, Lonny, 2008. "Information technology and medical missteps: Evidence from a randomized trial," Journal of Health Economics, Elsevier, vol. 27(3), pages 585-602, May.
- World Bank, 2009. "Europe and Central Asia - Health insurance and competition," World Bank Other Operational Studies 3064, The World Bank.
- M. Lippi Bruni & L. Nobilio & C. Ugolini, 2007. "Economic Incentives in General Practice: the Impact of Pay for Participation Programs on Diabetes Care," Working Papers 607, Dipartimento Scienze Economiche, Universita' di Bologna.
- Randall D. Cebul & James B. Rebitzer & Lowell J. Taylor & Mark Votruba, 2008.
"Organizational Fragmentation and Care Quality in the U.S. Health Care System,"
NBER Working Papers
14212, National Bureau of Economic Research, Inc.
- Randall D. Cebul & James B. Rebitzer & Lowell J. Taylor & Mark E. Votruba, 2008. "Organizational Fragmentation and Care Quality in the U.S. Healthcare System," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 93-113, Fall.
- Randall D. Cebul & James B. Rebitzer & Lowell J. Taylor & Mark E. Votruba, 2008.
"Unhealthy Insurance Markets: Search Frictions and the Cost and Quality of Health Insurance,"
NBER Working Papers
14455, National Bureau of Economic Research, Inc.
- Randall D. Cebul & James B. Rebitzer & Lowell J. Taylor & Mark E. Votruba, 2011. "Unhealthy Insurance Markets: Search Frictions and the Cost and Quality of Health Insurance," American Economic Review, American Economic Association, vol. 101(5), pages 1842-71, August.
- David Cutler, 2006. "The Economics of Health System Payment," De Economist, Springer, vol. 154(1), pages 1-18, 03.
- James B. Rebitzer & Mari Rege & Christopher Shepard, 2008. "Influence, Information Overload, and Information Technology in Health Care," NBER Working Papers 14159, National Bureau of Economic Research, Inc.
- van de Ven, Wynand P.M.M. & Beck, Konstantin & Buchner, Florian & Schokkaert, Erik & Schut, F.T. (Erik) & Shmueli, Amir & Wasem, Juergen, 2013. "Preconditions for efficiency and affordability in competitive healthcare markets: Are they fulfilled in Belgium, Germany, Israel, the Netherlands and Switzerland?," Health Policy, Elsevier, vol. 109(3), pages 226-245.
- Mousquès, Julien & Bourgueil, Yann & Le Fur, Philippe & Yilmaz, Engin, 2010.
"Effect of a French experiment of team work between general practitioners and nurses on efficacy and cost of type 2 diabetes patients care,"
Elsevier, vol. 98(2-3), pages 131-143, December.
- Julien Mousquès & Yann Bourgueil & Philippe Le Fur & Engin Yilmaz, 2010. "Effect of a French Experiment of Team Work between General Practitioners and Nurses on Efficacy and Cost of Type 2 Diabetes Patients Care," Working Papers DT29, IRDES institut for research and information in health economics, revised Jan 2010.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.