Does Pfizer's medicine work for Florida?
By CHRISTOPHER SWOPE
Yolanda Bryant is a nurse in Tampa, but when she gets on the phone with a Medicaid patient for the first time, she sounds more like a telemarketer. Her line is simple: I want to help you live a healthier life. What she's promoting is free -- additional health service for patients with diabetes, asthma or high blood pressure. Even so, Bryant's job is no easier than that of any other cold-calling pitchman. If she's lucky, she has two minutes to coax the patient onto her caseload. If she's not, she hears a click and the line goes dead.
What Bryant is selling is something called disease management, a program designed to both increase the quality and lower the cost of health care for the chronically ill. If the nation's biggest experiment with this approach to health care is to succeed, Bryant must win at a variety of roles: as a house-calling nurse who visits her patients at home and teaches them how to check their blood-sugar level or to stave off asthma attacks; as a diplomat who presses doctors for clinical information so she can monitor how her patients are doing; and as an advocate who steers her patients through the Medicaid bureaucracy.
One other thing is riding on the shoulders of Bryant and a few dozen nurses like her in Florida: $33-million. The pharmaceutical giant Pfizer is betting that this intense style of preventive health care will keep patients out of hospitals and save Medicaid at least this much money. It is a big gamble, but Pfizer is so confident it will work that it has given Florida a guarantee: If the program comes up short of the goal, the company will cut Florida a check for the difference.
When Florida and Pfizer teamed up a year ago, it turned heads not just in Tallahassee but in state capitals across the country. After all, this was the biggest disease-management deal in Medicaid history, and Pfizer's only experience in counseling Medicaid patients was through its often-criticized television ads. Meanwhile, Pfizer's pills, along with those of its competitors, were wreaking political havoc as the high cost of prescription drugs helped drive Medicaid budgets into the stratosphere. Pfizer, to say the least, seemed an unlikely partner to help Florida hold the line on health costs.
Despite their skepticism, lawmakers and health officials in every state can't wait to find out if Pfizer's medicine for Florida works. With state budgets under pressure, costs must be cut somehow -- and nobody wants to reduce health coverage for the poor. Just in time, it seems, a whole industry of disease-management organizations, or "DMOs," has come along with an attractive offer: guaranteed savings.
The approach could change the face of Medicaid more than anything since managed care. The idea is simple. People with chronic illnesses will land in the hospital if they do not take proper care of themselves. Help them manage their diseases better, and they will not only cost the health system less but also enjoy better health. "The beauty is that the only way you can reduce costs is by improving the quality of care," says Al Lewis, executive director of the Disease Management Purchasing Consortium and the industry's biggest cheerleader.
Medicaid seems particularly ripe for this approach. More than one-quarter of adult Medicaid enrollees have at least one chronic condition. Their care tends to be fragmented and expensive, with many using the emergency room as their primary physician. They often end up taking conflicting medications -- or not taking them all. Sending nurses on home visits and making followup phone calls costs something upfront, but lavishing this population with extra attention should eventually save money.
Intuitively, this makes sense. So far, however, disease management has not lived up to its billing. All the things that make the Medicaid population suitable for disease management, it seems, also make it a difficult group to work with. One of the hardest problems is finding them: Medicaid patients move around a lot. Then, once you find them, patients have to buy in to the idea of changing bad health habits. This isn't easy, as anyone who's ever been on a diet knows. Doctors, too, have to believe in disease management, and they are of mixed minds. Some like the idea of nurses doing intensive followup with patients, but others see the enhanced nursing role as an intrusion.
Moreover, the heavily touted cost savings are proving elusive in several states that have tried the approach. Florida is a good example. Even before the latest deal with Pfizer came along, Florida had signed contracts with a half-dozen DMOs. They were expected to save the state $113-million. Some of the contracts have indeed saved money, most notably one for patients with HIV/AIDS. But the effort overall hasn't yet saved anywhere close to what was expected. Actually, it has cost Florida some $24-million in startup fees, according to a legislative audit.
Given Florida's so-so experience thus far, it was surprising that the state would plunge deeper into disease management with Pfizer. The new program is, however, modeled differently. Pfizer not only guarantees a savings of $15-million the first year and $18-million the second year but also is paying all the startup costs. Florida officials figure they can't lose. "If Pfizer can't come up with the savings, we get a check," says state Sen. Burt Saunders, chairman of the Senate health care committee. "They have every incentive to make this program work."
Pfizer isn't doing this for charity, of course. This deal came in June 2001, when Florida was looking at ways to control Medicaid's skyrocketing bills for prescription drugs. Florida set up a formulary, meant to steer doctors away from prescribing expensive brand-name drugs and toward cheaper alternatives. Big pharmaceutical companies hated the idea. At their request, Florida included an out. Brand names could still make it on the "preferred drug list" and thus continue to rake in profits. In exchange, they had to devise other ways to save Florida money. Pfizer offered, among a handful of other smaller programs, to do disease management for patients with asthma, diabetes and hypertension, and for some patients with congestive heart failure. Bristol-Myers Squibb also agreed to run a disease-management program for an expected savings of $16-million, but Pfizer's is the bigger program and the first to get under way.
Pfizer is lucky to be going into Florida now. With four years of practice behind it, Florida has more disease-management experience than any other state. Its story is littered with the sort of trailblazing mistakes and miscalculations you would expect with something so new. Both Florida and Pfizer have learned a lot.
In 1997, the Florida Legislature told the Agency for Health Care Administration to start up disease management for patients with asthma, diabetes, hemophilia and HIV/AIDS. The next year, the Legislature added kidney disease, congestive heart failure, cancer, sickle cell anemia and hypertension to the list. Lawmakers liked the idea that disease management could improve health. But they seemed particularly fixed on the savings. Anticipating big savings, the Legislature sliced $113-million out of the Medicaid budget.
Talking to AHCA disease-management chief David Rogers, one gets the impression that this is all much easier said than done. Rogers still believes that disease management will save money and improve care. But so far, he admits, it hasn't achieved what the Legislature expected. He points to the agency's first disease-management contract, for asthma. "Did it really affect the bottom line? No. Did it show promise that these types of interventions can have an impact on care and on emergency room utilization? Yes. It was encouraging but not earthshaking. And it didn't match the expectations of the budget cut."
One of Florida's biggest problems, in fact, is calculating the bottom line. Florida currently requires all DMOs to guarantee 6.5 percent savings. The math is extremely complicated, though, because it essentially means guessing how sick patients would get if there were no disease management. In private, some vendors confess that the numbers are fudgeable -- and that AHCA would be hard-pressed to prove them wrong. "It's not like reducing the cost of toilet paper," says Al Lewis. "Savings with some diseases are harder to calculate than others. It's possible to know what you're saving with diabetes, but it's not possible to know with precision."
Florida understands this well. The state has been locked in a dispute with Coordinated Care Solutions, its diabetes DMO, for more than a year. In January 2001, AHCA tallied its diabetes costs and found they had risen significantly. The agency asked for a $7.6-million refund. The vendor, in turn, questioned AHCA's methodology. The dispute is still not settled.
Another problem in Florida was what critics call its "disease of the month" approach. Florida signed separate deals with different vendors for each disease it covered. That leaves AHCA struggling to manage a half-dozen contracts. Four years after the Legislature's orders, AHCA has yet to create disease-management programs for cancer.
Then there is the problem of categorizing Medicaid patients by disease. Many diabetics also suffer from high blood pressure or congestive heart failure -- or both. With vendors fragmented by disease, the question always arises: Who takes which patient? This can be a serious and dangerous question, especially with progressive diseases. Diabetes, for example, can easily lead to kidney disease, and different vendors handle each. In some cases, patients have been dropped as they pass from the care of one company's nurse to another.
More recently, DMOs have been moving toward lumping patients with four commonly related diseases into one program. Nurses take a more holistic view of their patients and stay with them unless they become gravely ill with something else. "It's easy to say now that contracting for each disease doesn't make sense," Rogers says, "but that's what the industry was doing at the time."
Meanwhile, with a show-results date of 2004, Pfizer has been racing to get its program up and running. It now has offices in place at 10 Florida hospitals from Pensacola to Miami, and by the end of May, had 8,000 patients enrolled in its program.
Pfizer's local office in Tampa is set in a drab-looking building on the grounds of Tampa General Hospital. The staff, funded by Pfizer but employed by the hospital, includes five nurses, a respiratory therapist, a medical director, two administrators and a bilingual secretary.
Yolanda Bryant, with a caseload of 125 patients, is one of the nurses, who are also known as "care managers." She seems the ideal person for a demanding job that requires her to be much more than just a nurse. She's worked in hospitals, which gives her experience with very sick patients. In stints doing home care, she saw how healthy home environments and family support can improve patients' health. And she's worked as a case manager, a role that emphasized reducing health costs.
Care managers are the most essential link in disease management, both at Pfizer and other DMOs. They don't prescribe medicines or decide treatments -- doctors do that. But they do remind people to follow doctors' orders and hound patients to get regular checkups, take their medications, eat good foods and exercise.
Bryant finds that the hardest part of her job is just finding her patients. Florida gives her a list of names and phone numbers, but the numbers are often wrong. Some patients don't even have phones. Then, when she finally gets a patient on the line, she's got "only two or three minutes to set them at ease. If you can make it through that first little bit, then they're willing to hear how we can work with them."
Bryant does most of her job on the phone, which is not ideal. But this is disease management's economic reality. Face time costs more. Depending on the disease, some DMOs do repeated home visits. Others work entirely by telephone. Pfizer is testing both models in Florida.
Like many DMOs, Pfizer will pay for some of the basic health-monitoring tools that Medicaid won't cover. Patients with hypertension can get digital pumps to check their blood pressure; diabetics can get lancets to use to prick their fingers when doing blood-sugar tests. Asthma patients can even get mattress and pillow covers if the care manager thinks they will cut down on the dust mites that trigger asthma attacks.
One thing Bryant and her fellow care managers don't do is push Pfizer drugs. At the outset, many skeptics figured Pfizer would use contact with patients to re-enforce its drug advertising. That does not seem to be the case, however. John Sory, senior director of Pfizer Health Solutions, the subsidiary overseeing the Florida effort, says Pfizer is genuinely interested in disease management as a market opportunity and is talking with other states as well. "We're looking for ways outside of selling pharmaceuticals to improve how health care is delivered," he says.
Nevertheless, Pfizer's effort clearly backs a strategy to sell more drugs in Florida. By having people such as Bryant on the ground in Tampa, Pfizer gets to keep its pills on Florida's formulary. Pfizer will likely win a larger share of Florida's $1.5-billion Medicaid drug market. In addition, with care managers reminding patients to take their medications (no matter the brand), Medicaid is apt to consume more drugs with disease management than without it. "The whole reason behind the deal was so Pfizer could get on the preferred drug list," says Nikki Highsmith, a public policy director at the Princeton-based Center for Health Care Strategies. "Providing disease management puts a good public face on it."
There are many cynics, both in Florida and out, who can't help but wonder: Is Pfizer really interested in disease management or simply going through the motions so it can continue selling drugs in Florida? Either way, the stakes are high. If Florida's partnership with Pfizer succeeds, disease management will likely become an epidemic of its own and spread to other states. If it fails, this latest health care fad may instead peter out like a summer cold.
-- Christopher Swope is a staff writer for Governing, a monthly magazine reporting on state and local governments. This commentary is excerpted from the July issue.
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