More and more large employers are instituting "disease management" programs for their employees and dependents. Even if—especially if—they don’t know what disease management is, the affected employees are often quite skeptical. Who wouldn’t be? Virtually every change to benefits plans proposed by employers constricts benefits, raises out-of-pockets, or impedes access to care…all moves which save money but which do nothing positive for the rank and file.

Disease management—though it does save money—is dramatically different. The way to know it’s different is that, in Philadelphia, for example, some municipal unions are demanding disease management. What makes Philadelphia unique? Nothing—it shouldn’t be unique. The only reason the unions are taking the initiative there is that several highly placed union officials themselves have chronic disease. They know firsthand the value of increased access and education to help them manage.

This article lays out the top eight most commonly asked questions about disease management.

1. What is disease management? Isn’t that what my doctor does?

Your doctor sees you once a year or maybe more often if you have serious chronic disease. Because of the way the US healthcare system has evolved, that doctor is not reimbursed for spending additional time with you to educate you about your disease or to take phone calls from you—especially around the clock—to answer questions about your disease. So between visits, you are pretty much on your own. Disease management fills that gap. It offers free printed, internet, and toll-free telephonic access to information about your disease (and often physical tools to help you manage it) and its management and potential complications and related conditions. Usually—and you should insist on this—that telephonic information comes from registered nurses with particular expertise in that disease, guided by recognized national protocols. They should also be able to call up onto their screen your particular profile, so they are quite aware of the course of disease and treatment in your case.

2. Doesn’t that mean my privacy is violated and my employer has given them access to my records?

No. The employer always waives their right to access this information (except in summary statistical format for their workforce as a whole) as part of the contract they make with the disease management (DM)company. This is not optional for the employer. The DM company always insists on it to protect themselves. This includes both the information that they use to identify you as a potential beneficiary (which comes from whoever pays the claims) as well as the information they develop with you to help you manage your disease.

3. Our union is responsible for our health care benefit—it comes out of our funds. It’s great that the rank and file is going to be healthier and that all this information and equipment is free for them. This will certainly save money in the long run, but how much is this going to cost us this year?

Most DM companies will guarantee that you will at least break even on their fees in the first year. Some will actually guarantee—and this depends on the disease—that your costs will go down in the first year. For instance, take cardiac disease. Say you’ve been averaging 100 heart attacks a year for the last 4 years. There are vendors out there who will guarantee you 80. That’s twenty people who avoided heart attacks thanks to this program and saved probably $400,000. The vendor would probably charge $250,000…so you’ve saved money for your fund by keeping people healthier.

4. What if 20 heart attacks aren’t prevented and we’ve still spent the $250,000?

Many programs will guarantee the savings. If a vendor thinks they can save 20 heart attacks, they will probably guarantee saving 15, or $300,000. Since the program only costs $250,000—they are guaranteeing savings of $50,000.

This means that even if they don’t save the 15, they are on the hook for the guarantee of $50,000 in net savings to you…even if it means that have to pay you back some or all of their fees.

5. Isn’t there going to be some random variation in the number of heart attacks anyway? How can you be sure the vendor is responsible?

That is right. Those answers above are the "short answer" version. In the longer answer, contractual steps are taken to smooth out random variation. Examples might be including all chronic disease in the contract or measuring cardiac events and procedures over the entire term of the contract. Both approaches increase the size of the corpus being measured, and by doing so the potential for random variation being responsible for the outcomes is substantially reduced, just the way a pollster can be more confident in a larger sample than a smaller one, except in Palm Beach County.

6. What is the negative impact on our members?

Hard to believe, but there is none. If your employer tells you this, you might react with skepticism. If the vendor tells you this, you might react with skepticism. But if you join the Disease Management Purchasing Consortium and we tell you this, it’s different: We are your agent. If we tell you something that knowingly isn’t true, you can sue us.

And, as your agent, we will tell you, no negative impact:

There are no co-pays, no deductibles, no out-of-pockets at all. Occasionally, there is even a program which pays people to follow their doctors orders, though that is rare and quite limited by law in most states.

There are no restrictive networks, no concept of "denials," no needing to switch doctors, and no worrying about whether the disease management companies have the secret incentive to limit high-cost care. (As to the last point, they DO have the incentive to limit high-cost care…by keeping people healthy enough through preventive and readily available urgent-care solutions that the need for high-cost hospital and emergency room care is reduced.)

7. Will this cover retirees?

The chances are that it won’t cover retirees over 65 but it is likely to cover them under 65. The reason is that the employer, in most union contracts, is the primary payer for early retirees’ healthcare spending but not for people over 65. Over 65, employers, if they are responsible at all, are responsible only for the 20% of spending not covered by Medicare.

Since roughly speaking (and it depends on the disease) a program costs $1 for every $2 it saves, it makes all the sense in the world to spend $1 on the <65 retirees. Over 65, spending $1 will save the employer 20% of $2, or $0.40. Suddenly you, as the union, are out of the "win-win" column and in a column where you must negotiate against the employer instead of working with them.

One possible compromise which should probably benefit the employer is to allow people who were actively participating in programs before Age 65 continue in those programs afterwards. That would be a good incentive to get people into programs early.

The same issue holds for self-funded union plans. Do the math and weigh the arguments, but know that cover for retirees >65 subtracts from your fund, whereas coverage for those <65 quickly saves enough money to add to your fund.

8. Assuming we believe the previous answers, what should we do to make this process as successful as possible?

The key to disease management is outreach and enrollment. DM programs will help people with whom they engage, but often they engage with only a small fraction of the eligible people. Strong and consistent encouragement from everyone down to the shop steward is the key to success.