Alzheimer's Disease and Managed Care: How Much Will It Cost?

Taking care of patients with Alzheimer's disease can be an expensive proposition. Annual expenditures for dementia care have been estimated at $100 billion, which includes both direct costs of care and indirect costs for lost work by caregivers.1 Yet little is known about the annual costs to Medicare of individual patients with dementia, a figure important in healthcare planning in managed care. In this issue of the Journal, Weiner et al. describe the results of a study of a representative sample of more than 1.2 million Medicare beneficiaries and indicate how the demented persons in that sample fared in terms of healthcare expenditures. The results: the cost of caring for demented patients is about twice as high as the cost of caring for the average Medicare patient. This finding has significant implications for Medicare as a whole and especially for the rapid shift to managed care that the Medicare program envisions. The rate of enrollment in Medicare managed care is increasing so rapidly that figures are difficult to quote accurately. Although the latest figures from the managed care office of the Health Care Financing Administration show that 13% of the population is now in managed care, the percentage is likely higher. In Portland, Oregon, 65% of the Medicare population is in managed care. This rapid rate of increase parallels the rise in the number of persons with Alzheimer's disease. When geriatricians in managed care try to sound the alarm for this demographic imperative, the warning often falls on deaf ears. A common misconception among managed care program leaders is that patients with Alzheimer's disease are less demanding. Perhaps leaders perceive of dementia as the ultimate form of demand management — the patient forgets that he or she has problems. Yet Weiner's study gives us a hint that such perceptions are not grounded in reality. At an annual average cost of $6208, the patient would "cost" the health plan $517 per member per month. In capitated systems, the monthly payment is less than that throughout most of the United States. As in other areas of Medicare spending, 10% of the Alzheimer's disease patients accounted for 42% of all expenditures. Plan managers will likely listen to this kind of data. See also p 762 Clearly, more research is needed to validate these high costs, particularly in managed care settings, but it is also important to begin analyzing the steps that a managed care program must take to meet its dual responsibility of providing high quality care to an enrolled population and to remain financially viable. It is likely that some managed care companies have used unethical practices to limit enrollment of high-cost patients or have made it difficult for expensive patients to get the care they deserve (rationing by bureaucratic parsimony), thereby motivating them to leave the plan. However, most patients will remain with their plans and, as managed care expands in a given geographic area, Medicare patients can often change plans without having to leave their doctor. The best plans will retain their older enrollees and will eventually be dealing with a much higher percentage of demented patients in their population. What's a plan to do? Weiner suggests that risk adjustment, or "carve outs," may be needed to fund the high cost of care of demented patients adequately. This may be true, but will it be enough? Managed care plans interested in increasing the quality of care received by Alzheimer's disease patients while holding the line on costs must approach it from a population viewpoint. Capitation of payment, and the freedom that it brings to expand benefits and programs, can be used to meet this dilemma. However, a number of steps are needed to truly integrate the care of demented patients. First, detection of potential cognitive problems in the population needs to be improved. Families need training in the warning signs of dementia and education that memory loss in old age is not necessarily normal. Such training can be accomplished through focused mailings to members, public education venues, and advertising. The Alzheimer's Association has developed a pamphlet for use by the public, "The Ten Warning Signs," which is also available on their web site.2 Most managed care plans are using some form of health risk assessment. Some risk assessment tools have questions regarding memory loss that may facilitate detection. More research in this area is also needed. Finally, physicians can be educated to watch their patients for "triggers" to begin an investigation for dementia, such as those suggested by the AHCPR guidelines on Early Identification of Alzheimer's Disease.3 These triggers deserve careful evaluation and validation. The next component of an integrated approach to caring for demented patients in managed care is diagnosis. Whereas such standards of assessment as the Mini-Mental Status Exam, the CAT scan, and neuropsychiatric testing are part of the lexicon of geriatric practice, it is surprising how resistant primary physicians are to these. In a study of internists at the Mayo clinic, 65% felt that having the results of an MMSE rarely or never affected the diagnosis, and 58% thought it took too much time.4 Perhaps this is because geriatricians and neurologists evaluate patients in settings where the pretest probability of dementia is so high that these studies are more reliable than in a primary care setting.5 A simple screening tool for cognitive function that is acceptable to primary care physicians is needed. Such a tool would probably be utilized better if it did not require the use of a form but could be administered from memory. Telephone screening may also have some promise.6, 7 More research is needed into the appropriate — and cost-effective — workup of demented patients in managed care settings. It seems that not a month goes by without a new discovery of another genetic link in Alzheimer's disease. Although these do not yet have direct application to the diagnosis and care of the vast majority of demented patients, the public media attention given to such discoveries invariably brings patients to their doctors asking for the latest test. Physicians in managed care are put in the unenviable position of having to explain complicated genetic theory to someone who is likely to assume that the reason the test is not being ordered is because "it's managed care." Managed care plans need to develop specific policies that are applied fairly in regard to the appropriate use of genetic testing. Treatment and management of demented patients and their caregivers are critical in managed care. Options can be expanded in managed care when the prevention of functional decline and reduction of unnecessary hospital utilization are made primary goals. Recent evidence of the effect of the cholinesterase inhibitor, donezepil, to slow the rate of functional decline in Alzheimer's disease is encouraging, but this drug is expensive, and many plans are already struggling with rapidly rising pharmacy costs. On the other hand, a recent study by Ernst et al.8 indicated that a rise in mental status functioning (or a prevention of decline) could potentially lead to significant cost savings. If more studies validate this finding, plans would have a greater incentive to expand the benefit package to cover the cost of donezepil and the other drugs expected to be released soon. Even more enticing is the hope of delaying the onset of Alzheimer's disease with estrogens, vitamin E, or other agents. It has been estimated that a delay in onset of 5 years would reduce costs by 50%.9 However, expanded or new drug treatments are not likely to be the only answer to the question of how best to control the rising cost of care for demented patients. The critical role of the family in managing the patient in the home, methods by which nursing home placement can be delayed, and special approaches to caring for comorbid conditions of patients with Alzheimer's disease are activities that must be supported by managed care. Care pathways for managing the demented patient during hospitalization should be tested to attempt to reduce iatrogenic complications. Collaborations between community-based services and managed care companies are another option for enhancing care and decreasing utilization. Although not related directly to Medicare expenditures, family training may reduce admissions to nursing home settings, thereby decreasing Medicaid costs.10 Short respite admissions to home-like settings have been used effectively by some of the Program for All-inclusive Care of the Elderly (PACE) sites. Eventually all patients with dementia face end-of-life care decisions, and most of these decisions deal with questions regarding placement. Unfortunately, some managed care organizations avoid dealing directly with enhancing end-of-life care for fear that they will be seen as trying to get rid of their expensive patients. Nothing could be further from the truth. Open and direct dealing with the issue may not reduce costs, but it will enhance care. Managed care plans will also need to address the use of special care units for demented residents in nursing homes. Although recent evidence suggests that such units may not have better outcomes,11 family members will likely request them. These issues and others are being addressed through collaboration between the National Chronic Care Consortium12 and the National Alzheimer's Association. Entitled "Chronic Care Networks for Alzheimer's Disease," the project has identified eight sites around the United States to demonstrate that networks of integrated care, support, and education can be developed to incorporate the range of services needed by people with dementia under risk-based managed care. The project plans to measure a wide variety of outcomes such as utilization, clinical indicators such as functional changes over time, and caregiver satisfaction rates. Geriatricians are challenged to lead the development of a better system of care for people with dementia. With the expected rise in the number of persons with dementing illnesses, managed care will be faced with significant cost concerns. Physicians also have to understand that financial viability, in addition to the quality of care of persons with Alzheimer's disease, is critical to the success of such a system. Evidence will need to be gathered that demonstrates that the approach we promote meets both of these goals.