The cost of treating diabetes patients in an adult practice exceeds reimbursement by more than $750,000 per year, and in a pediatric practice by more than $471,000 per year, according to the results of a study commissioned by several major diabetes and endocrinology organizations.
The economic data were part of a larger program that included a provider survey aimed at identifying barriers to providing optimal care for patients with diabetes and a set of recommendations that will be released in a white paper in December. The study was conducted by Avalere Health LLC on behalf of a working group comprising members of the American Association of Clinical Endocrinologists, the American Association of Diabetes Educators, the American Diabetes Association, the Juvenile Diabetes and Research Foundation, the Pediatric Endocrine Society and the Endocrine Society. Also participating were representatives from the consulting company Close Concerns, the American Academy of Pediatrics, and three prominent individual endocrinologists (Dr. Bruce Bode, Dr. Irl Hirsch, and Dr. William Tamborlane).
The working group defined "optimal diabetes management" as "a patient-centered, multidisciplinary team approach to achieve evidence-based clinical outcomes [from major trials] shown to improve the long-term health of patients with diabetes," Avalere vice-president Jenifer Levinson said.
The survey, fielded to 1,422 unique members of the participating organizations, was completed by 1,056 respondents who provide care to diabetes patients. "Patient compliance" was the most frequently identified barrier to meeting established ADA and/or AACE diabetes standards of care, listed by 64% of the survey respondents. "Time with patients" was next, endorsed by 38%, followed by "compensation," 26%, and "team coordination," 26%. (Respondents could list more than one barrier.)
The economic analysis was carried out for six different patient vignettes, including those of three type 2 diabetes patients of different ages (40, 50, and 67 years) and three type 1 patients, aged 10, 16, and 67 years. Total reimbursement was calculated using the 2011 Medicare National Average Allowable nonfacility reimbursement rates, which include the 20% patient coinsurance. For non-Medicare vignettes, a standard multiplier was used to estimate private insurer and Medicaid payment rates.
The baseline model showed a gap between provider costs and reimbursement of $121-$829/patient per year, depending on patient characteristics. Reimbursement exceeded provider costs only for the best-case provider time estimates, in five of the six patient scenarios, by $28-$243/patient per year. However, in "real-world" estimates, the costs of treating adult diabetes patients exceeded reimbursement by $754,623/practice, and for treating pediatric patients by $471,098. These gaps are increased for patients using time-intensive management technologies such as insulin pumps and continuous glucose monitors.
Ms. Levinson commented that diabetes providers offset these losses in a variety of ways, including seeing other types of patients, conducting clinical research, and, commonly, seeing as many patients as possible in a day’s time. "When you look at just diabetes patients for an average practice, the losses on an annual basis are fairly significant and probably start to help explain some of those barriers, like the ability to spend time with patients. The less time you spend with patients, the more patients you can see and that may help prevent losses. But it also explains why it’s hard to provide optimal evidence-based care. If you’re going to lose that much money providing optimal care, it’s going to be very challenging to do and certainly a significant barrier."
The model used in the study is highly sensitive to assumptions about coverage and reimbursement for diabetes-related services, particularly for physician office visits, and the figures are likely to be underestimates because of the conservative assumptions used in the model. For instance, the study assumed that an hour-long visit would be coded as such. However, in reality providers often "down-code" to a visit of lower duration or complexity because it is less likely to be denied by payers than are longer/more complex office visits, Ms. Levinson said.
"So, we were conservative in that respect. If you assume that providers get paid only for lower-level visit, losses were much higher," she said, adding that this was true for diabetes educators as well as physicians, since payers often limit the time that educators or nutritionists can spend with patients.
To address the three key provider barriers addressed in the survey – time with patients, inadequate reimbursement, and patient compliance – the working group provided three sets of recommendations.
For care management, the group recommended the following:
• Increase use of shared decision-making opportunities with patients in the office setting to maximize patient engagement in self-management of diabetes.
• Leverage existing health information technology tools fully to assist patients in diabetes self-management and track performance.