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Documenting the Cost Benefits of Care Management: One Care Management Organization’s Experience

May 26, 2016
by Mark Hagland
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AxisPoint Health’s leaders conducted a study to assess the potential cost savings in care management


AxisPoint Health is a Westminster, Colo.-based company that provides care management services to a variety of entities, including state Medicaid programs and other insurance and medical providers. It focuses in particular on condition management—the careful tracking of the health status and condition of individuals who are members of large insured cohorts, and the alerting of providers to changes in condition or health status that suggest interventions.

Recently, senior leaders at AxisPoint Health conducted a study of a Medicaid population, to determine what kinds of differences the use of condition management might make in that population. Among those involved in the preparation and analysis of the study were Gregory Berg, Ph.D., associate vice president, research and outcomes, and Margaret Flaum, R.N., vice president of account management, for the company. How many plan members in this universe?

Berg, Flaum, and their colleagues looked at two populations for comparison. The broader group encompassed 25,000 Medicaid recipients in a western state who were continuously eligible for condition management by AxisPoint Health professionals; the trend, or control, group, consisted of just under 5,800 individuals who were not being condition-managed.

In analyzing data gathered for the study, the AxisPoint Health study leaders found that total expenditures for those in the trend, or control group—those not receiving condition management—saw an annual increase of 100 percent in cost inflation—though it should immediately be noted that those individuals had not been identified as having a chronic condition meriting inclusion in care management or condition management. Meanwhile, those in the group being condition-managed saw a flat trendline, implying that care or condition management did indeed make a significant difference in managing their costs.

In the first month of the study, June 2014, Medicaid plan members in the condition management program averaged per member per month (PMPM) costs of $1,018, while those in the control group (without identified chronic conditions) averaged $105 PMPM in costs to the program. Over the next 18 months, the average PMPM costs of those in the condition management program remained flat, while the PMPM costs of those in the control (general population) group rose by 400 percent, indicating that the condition management program was indeed helping to manage not only the clinical conditions of those plan members, but also their PMPM costs. Even more dramatically, the inpatient utilization rate of those in the condition management program rose between 10 and 15 percent within the 18 months of the study, while inpatient utilization rose 100 percent in the non-managed control group. Similarly, pharmacy costs remained essentially flat, with a possible slight increase, in the care-managed group, while they rose from around $20 PMPM to over $100 PMPM in the general population.

Meanwhile, emergency department (ED) utilization declined slightly in both groups; study leaders wrote this in their study’s summary: “In summary, within the constraints of unreconciled data, the key financial metrics of the program show generally positive trends when compared to a similar population. If the program did not have a positive effect on the members, one would suspect mirroring of, or even exaggeration of, the trend population. Continued effort will be applied to decrease Emergency Department utilization.”

Berg and Flaum spoke recently with HCI Editor-in-Chief Mark Hagland about the study and its implications for care management and population health management efforts in U.S. healthcare. Below are excerpts from that interview.

Overall, though one needs to be careful about over-generalizing, you found clear positive benefits from care management. That is the bottom-line result of the study, correct?

Margaret Flaum, R.N.: Yes. This program is a population-based care management program. And through analytics and communications to all the members and providers, we were able to identify through claims data, and risk-stratify, the population, based on individuals’ levels of claims risk. Then, using social workers, behavioral specialists, and community health workers, we were able to reach out to members, and do care coordination and care management in concert with their providers, to manage their risk factors. So ultimately, this program, which encompassed telephonic intervention, on-the-ground intervention, and the engagement of members, provides a good example of how programs like this that make use of proactive interventions, will be able to influence all of the key metrics we found in the study’s results.

Margaret Flaum, R.N.

Gregory Berg, Ph.D.: So, we first looked at the PMPM costs of the 25,000 plan members in the program, and found that their costs were relatively flat. We didn’t initially know whether that was a good or a bad thing, so we compared that level of cost increase [flat] to a control group of 5,800 plan members who were not in the care management group, in order to infer the impact of participation in the program, on PMPM costs. Comparing the flat level of cost increases among the care-managed plan members to the increases among the general plan population, we could infer that the care management program had had some effect.

Gregory Berg, Ph.D.