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Health Affairs Article Outlines Challenges For Demonstration Projects
Authorized Under 2003 Medicare Law

Authors List Numerous Barriers Faced By Past Demonstrations Trying To Improve Quality, Save Money In Caring For Chronically Ill Elders


BETHESDA, MD—Health care demonstration projects like those ordered under the 2003 Medicare bill often fail to show cost containment or quality improvements because they assume that small investments and adjustments in practice patterns can quickly result in big savings, according to a new article posted today on the Health Affairs Web site.

Marsha Gold, a senior fellow with Mathematica Policy Research, and colleagues review demonstration initiatives under the Program for Elders in Managed Care, the first program authorized by the California HealthCare Foundation, which also supported the independent evaluation of the program that provides the basis for this article.

In 1998, the program began issuing grants to consortia of managed care organizations, providers, and community organizations seeking to demonstrate ways to improve care for chronically ill seniors through program designs sometimes called “case management” or “disease management.” The grantees were unable to demonstrate big results, however, because of flaws in their concepts, problems in translating concepts to program designs, and problems in executing the programs.

For example, the grants offered under the program—$1 million over three years—were small compared with the revenue of large health care organizations, Gold writes. Grantees also defined their success as the ability to yield big results quickly, such as improving health status, reducing utilization or cutting costs, all of which were difficult to demonstrate. Grantees also differed in their ability to effectively target the best patients for the demonstration, and recruiting patients often proved to be a challenge.

Because the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) authorizes several new demonstration projects, Gold discusses issues that developers might want to consider in the future, including:
— How to establish realistic outcome goals;
— How to effectively target interventions to problems;
— How to anticipate implementation challenges
— How to evaluate results.

“Generating major improvements in care for high-risk elders is difficult without major system changes” Gold says. “Yet massive change in financial incentives and how institutions relate to one another is not likely to occur in the immediate future. MMA and related recent initiatives create opportunities for progress, but the points we have raised previously also suggest that expectations about these opportunities’ outcomes should be realistic.”

Gold’s coauthors are Timothy Lake, a Mathematica senior researcher; William Black, a Mathematica research analyst; and Mark Smith, the CHCF’s president and chief executive officer.

You can read the article at content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.199.


Health Affairs, published by Project HOPE, is the leading journal of health policy. Peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at www.healthaffairs.org. The full text of this Health Affairs Web Exclusive is available free of charge to all Web site visitors for a two-week period following posting, after which it will revert to pay-per-view for nonsubscribers. The abstracts of all articles are free in perpetuity. Support for the publication of this Web Exclusive was provided by the California HealthCare Foundation; Web Exclusives are also supported in part by a grant from the Commonwealth Fund.

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