Q & A: Evaluating Disease Management Under Medicaid

Executive Summary

This Q&A discusses the potential impact of disease management programs as a means to addressing escalating Medicaid costs.

Manjusha P. Kulkarni, Staff Attorney, National Health Law Program
Question: My state is considering undertaking a disease management program to address escalating Medicaid costs. I=m not sure what to make of it.  Will it help my Medicaid clients? 
Answer: Disease management does offer promise of better access to appropriate health care services to Medicaid beneficiaries with chronic illnesses, especially those in fee-for-service who do not usually receive care coordination of their complicated diseases. Initial results indicate minor cost savings and some improvement in health outcomes, making unclear the exact impact of disease management on Medicaid beneficiaries. 
Today, approximately 125 million people suffer from at least one chronic disease. About 16 million Medicaid recipients in the country suffer from one or more chronic conditions. The most common chronic diseases in the U.S. are asthma, diabetes, cardiovascular disease, cancer and HIV/AIDS. 
Treatment of chronic illnesses accounts for seventy-eight percent of all medical costs in the United States and approximately eighty percent of Medicaid expenditures.2 The average monthly medical expenses for Medicaid beneficiaries with chronic conditions is $556 compared with only $36 for individuals without those conditions.3 Despite the huge sums spent byMedicaid, many beneficiaries with chronic conditions do not get the medical care they need.4
As Medicaid costs continue to increase5 and revenues to pay for health care costs shrink, more states are considering the option of disease management, especially for recipients who are chronically ill or disabled. Disease management provides an alternative to cutting eligibility, reducing benefits and expanding managed care. Furthermore, disease management programs can improve the health of chronically ill individuals by helping them access appropriate health care services. Currently, twenty-eight states are planning to establish or expand disease management programs in fiscal year 2005.6

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