Disease Management VS. Case Management VS. Utilization Management

This video provides an in-depth exploration of the critical distinctions among three core healthcare management functions: Utilization Management (UM), Case Management (CM), and Disease Management (DM). Dr. Eric Bricker, the speaker, aims to clarify these often-confused terms and, more importantly, detail how the value of each program should be uniquely measured from a financial perspective. He establishes the context by highlighting that while all three involve nurses from insurance carriers or third-party administrators (TPAs), their scope, patient interaction, and ultimate goals differ significantly.

The presentation systematically breaks down each management type. Utilization Management is defined as the process where an insurance carrier's nurse approves "bed days" for hospitalized health plan members, focusing on the appropriateness and length of hospital stays. The nurse interacts with hospital staff, not the patient, and can deny payment for unapproved days. Case Management, in contrast, involves an insurance carrier nurse working with patients who have been discharged from a hospital but are not yet home, instead residing in facilities like acute rehab, skilled nursing facilities (SNFs), or long-term acute care facilities (LTACs). The primary goal here is to prevent readmissions back to the hospital, again with no direct patient interaction. Finally, Disease Management involves a nurse, dietitian, or health coach, potentially from the insurance carrier or a separate vendor, working directly with patients suffering from chronic conditions such as diabetes, COPD, congestive heart failure (CHF), or chronic kidney disease (CKD). This is the only one of the three with direct patient interaction, focusing on care coordination, medication adherence, and lifestyle counseling, though it often faces a low patient reach rate.

A significant portion of the video is dedicated to explaining the distinct methodologies for measuring the financial value of each program. For Utilization Management, value is quantified by calculating the total cost of denied length-of-stay days versus what would have been paid without those denials, then comparing this saving to the program's cost. Case Management's value is measured by analyzing 30-day readmission rates for patients who received case management compared to those who did not, attributing the cost savings from prevented readmissions to the program. Disease Management's value is assessed by comparing the total healthcare spend over a 12-month period for patients involved in the program versus those with similar chronic conditions who were not, then multiplying the per-patient savings by the number of engaged patients. Dr. Bricker emphasizes that combining the per-employee-per-month (PEPPM) costs for these distinct programs is a mistake, as their value propositions and measurement metrics are fundamentally different.

Key Takeaways:

• Distinct Management Functions: Utilization Management (UM), Case Management (CM), and Disease Management (DM) are separate healthcare management functions, each with unique objectives and operational models, often confused but critical to differentiate.
• Utilization Management (UM) Focus: UM primarily involves an insurance carrier's nurse approving hospital "bed days" to ensure appropriate length of stay, with the goal of reducing costs associated with unnecessary or prolonged hospitalization through length-of-stay denials.
• Case Management (CM) Focus: CM is centered on preventing hospital readmissions for patients discharged to post-acute care settings like acute rehab, Skilled Nursing Facilities (SNFs), or Long-Term Acute Care Facilities (LTACs), with nurses working with facility staff rather than directly with patients.
• Disease Management (DM) Focus: DM targets patients with chronic conditions (e.g., diabetes, COPD, CHF, CKD) through direct interaction by nurses, dietitians, or coaches (from carriers or vendors) to coordinate care, promote adherence, and provide counseling, despite often having a low patient engagement rate (e.g., 4%).
• Absence of Patient Interaction in UM/CM: A key differentiator is that UM and CM nurses do not typically interact directly with patients; their communication is with hospital or facility staff, whereas DM explicitly involves patient interaction.
• Unique Value Measurement for Each Program: It is crucial to measure the financial value of UM, CM, and DM programs separately, as their mechanisms for generating savings are entirely different and cannot be conflated.
• UM Value Calculation: The value of Utilization Management is quantified by the difference between the potential cost of hospitalizations (if all days were approved) and the actual paid amount after length-of-stay denials, compared against the program's cost.
• CM Value Calculation: Case Management's value is determined by comparing 30-day readmission rates for patients who received case management versus those who did not, then calculating the cost savings from the readmissions prevented.
• DM Value Calculation: Disease Management's value is assessed by comparing the total healthcare spend over a 12-month period for patients engaged in the program against a similar group not involved, identifying per-patient savings.
• Separate Cost Tracking: Carriers often combine Per Employee Per Month (PEPPM) costs for UM and CM; however, for accurate value assessment, these costs should be tracked and reported separately.
• Data Reporting Challenges: Self-funded employers may need to specifically request detailed reports from their carriers to obtain the necessary data for accurately measuring the value of these individual programs, as such reports are not always standard.

Key Concepts:

• Utilization Management (UM): The process of reviewing the appropriateness and necessity of medical services, particularly hospital stays, to ensure efficient resource allocation.
• Case Management (CM): A collaborative process that assesses, plans, implements, coordinates, monitors, and evaluates the options and services required to meet an individual's health needs, especially post-hospitalization to prevent readmissions.
• Disease Management (DM): A system of coordinated healthcare interventions and communications for populations with conditions in which patient self-care efforts are significant, focusing on chronic disease management and patient education.
• Bed Days: The number of days a patient occupies a bed in a healthcare facility, often used as a metric for utilization.
• Acute Rehab: Intensive rehabilitation services for patients recovering from severe injuries or illnesses.
• Skilled Nursing Facility (SNF): A facility that provides skilled nursing care and rehabilitation services for patients who need medical care or therapy that cannot be provided at home.
• Long-Term Acute Care Facility (LTAC): A specialized hospital that provides extended medical and rehabilitative care for patients with complex medical conditions who require longer hospital stays.
• Length of Stay Denials: When an insurance carrier refuses to pay for a portion of a patient's hospital stay deemed medically unnecessary or exceeding approved limits.
• Readmission Rates: The percentage of patients who are readmitted to a hospital within a specific timeframe (e.g., 30 days) after an initial discharge, often used as a quality and cost-effectiveness metric.
• Per Employee Per Month (PEPPM): A common pricing model in healthcare benefits, representing the cost per employee per month for a particular service or program.