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Programs aim to control health-care costs by managing diabetes, other diseases

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Dec. 28--Once a month, 61-year-old diabetic William J. Smith gets a call at home from a friendly nurse who asks him if he's taking good care of himself.

She asks if he's taking his medication, checking his blood sugar and watching his diet. She asks more personal questions about his lifestyle. Is he stressed from caring for his sick wife and their 13-year-old grandson?

"Sometimes I get so wrapped up in other things that seem more important," the retired Dow Chemical plant operator from Clute said. "But she gets me back on track."

Smith is one of a growing number of current or retired workers nationwide who are taking part in voluntary disease management programs aimed at helping keep a lid on rising employee health costs.

As employers continue to grapple with double-digit percentage increases in the cost of providing health insurance to employees and retirees, more and more companies -- including Continental Airlines and Baker Hughes in Houston -- are seeing disease management as a big part of the solution.

"The time is right for disease management, because it is one of the big untapped areas of improvement for health care programs," said Gary Laugharn, regional client leader for health benefits at Hewitt Associates in The Woodlands.

Such programs go far beyond traditional wellness plans in which workers are encouraged to take part in the company fun run, given cash to stop smoking or provided with discounts on health club memberships.

Operators of disease management programs cull through claims data to identify specific workers who suffer from costly chronic diseases, such as diabetes, asthma, hypertension or coronary artery disease. Because the programs are managed by third parties, the workers' identities are kept private from their employers.

If the workers agree to participate, they are matched with "nurse coaches" who make regular calls encouraging them to keep up with their treatment. They might also receive regular educational materials in the mail, or heavily discounted supplies needed for at-home care. The more acute the condition, the more contact with the nurse coach.

The incentive for employers is clear: While 44 percent of the population suffers from chronic diseases, their treatment accounts for 78 percent of all health care dollars, according to the investment firm Cochran, Caronia Securities, which tracks the disease management industry.

Employers are realizing that if more of these chronically ill workers stayed healthier -- and avoided costly emergency room or hospital visits -- health insurance costs would hold steady, maybe even slip. Industry estimates are that disease management could cut an employer's annual health costs by 2 percent to 5 percent.

"What has really sparked growth in our industry is employers who simply cannot stay in business and sustain these kinds of double-digit rate increases," said Mike King, senior vice president of business development for disease management provider American Healthways, whose company manages the diseases of 12,000 people in the Houston area, including Smith.

Even Medicare is getting in on the act. The Centers for Medicare & Medicaid Services awarded 10 contracts nationwide this month to American Healthways and others to provide disease management to an estimated 300,000 Medicare recipients.

Employees, however, may be wary. A recent report by Towers Perrin found that workers often resist efforts by employers to manage health care costs, particularly efforts that pressure them to change their habits.

"You basically have a third party attempting to exert some degree of control over your behavior," said Michael Barbour, a principal at Towers Perrin in Houston. "Some people see it almost as a parent-child interaction, and they don't like it."

So program operators nationwide are experimenting with ways to encourage workers to get involved. Experts say workers will be more motivated if they're convinced it will improve their health and allow them to live longer, happier lives.

"A good nurse coach will explain how this disease is getting in the way of what you want to do," said Christobel Selecky, president of the Disease Management Association of America. Selecky is also president of LifeMasters, a California-based disease management company that manages the conditions of 15,000 Houstonians through various health plans.

Some companies are increasing their chronically ill workers' out-of-pocket expenses if they choose not to participate. Others are taking a different approach by rewarding those who do.

That's the case at Houston-based Baker Hughes, which will offer a disease management program for the first time in 2005. Workers, through health plans, are being entered in drawings to win $250 gift certificates if they agree to participate.

"We're looking at providing them with a carrot rather than a stick," said Michele Gest, the company's manager of corporate benefits. "We are hoping to change employee behavior."

While some employers like Baker Hughes are providing these programs through their health plans, others -- including St. Luke's Episcopal Health System, and the Deer Park, Klein, Humble and Pasadena school districts -- are contracting directly with providers. Those employers offer disease management programs through contracts with Kelsey-Seybold Clinic.

Industry experts say they see growth ahead for disease management, along with a broadening of the conditions that will be included.

"I think moving forward, we'll see a lot of interest in lower back pain, cancer and even behavioral conditions such as clinical depression," Selecky said.


--What is it? Chronically ill workers are identified and matched with nurse "coaches," who encourage them to keep on treatment plans and stay well.

--Why? To save employers money on health care costs.

--Who's included? Typically, those with diabetes, congestive heart failure, asthma and hypertension.


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