Information and Communications Technology in Chronic Disease Care

Abstract

New information and communication technology (ICT) has the potential to improve care for chronic conditions, deliver better health outcomes, and reduce direct and indirect costs. However, realizing these gains necessitates new forms of care delivery, through adoption of ICT, the specific choice of ICT, and changes to existing forms of health care delivery. Realizing these new forms of delivery requires appropriate payment policies. The authors review the literatures on health care payment and ICT in chronic care and then apply theoretical economic analysis to determine how ICT alters health care payment policy recommendations. Using diabetes as an example, the authors identify and illustrate the disease and technology features that determine the optimal form of payment. Overall, ICT shifts the optimal blend of fee-for-service and capitation toward greater capitation. Carve-outs for ICT-supported preventive care enable more high-powered payment while addressing selection concerns.

Get full access to this article

View all access options for this article.

References

American Diabetes Association (ADA). 2003. Economic consequences of diabetes mellitus in the U.S. in 2002 . Diabetes Care 26(3): 917-32 .

American Telemedicine Association, and AMD Telemedicine. 2003. Private payer reimbursement information directory. Retrieved January 8, 2006, from http://www.amdtelemedicine.com/private_payer/about_survey.cfm.

Artinian, N.T., O.G. Washington, and T.N. Templin. 2001. Effects of home telemonitoring and community-based monitoring on blood pressure control in urban African Americans: A pilot study . Heart and Lung 30: 191-99 .

Asmar, R., and A. Zanchetti. 2000. Guidelines for the use of self-blood pressure monitoring: A summary report of the first international consensus conference. Journal of Hypertension 18: 493-508 .

Barlow, S., L. Johnson, and J. Steck. 2004. The economic effect of implementing an EMR in an outpatient setting . Journal of Healthcare Information Management 18(1): 46-51 .

Berger, A.M., and C.R. Berger. 2004. Data mining as a tool for research and knowledge discovery in nursing. Computers, Informatics , Nursing 22(3): 123-31 .

Berk, M.L., and A.C. Monheit. 2001. The concentration of healthcare expenditures, revisited . Health Affairs 20(2): 9-18 .

Bishai, D.M., D.G. Ferris, and M.S. Litaker. 2003. What is the least costly strategy to evaluate cervical abnormalities in rural women? Comparing telemedicine, local practitioners, and expert physicians . Medical Decision Making 23(6): 463-70 .

Blumenthal, D. 2002. Doctors in a wired world: Can professionalism survive connectivity? The Milbank Quarterly 80(3): 525-46 .

10.

Boberg, E., E.W. Boberg, D.H. Gustafson, and R.P. Hawkins. 1996. CHESS: The comprehensive health enhancement support system. In Community health information networks, eds. P. F. Brennan et al., 171. New York: Springer-Verlag .

11.

Bondmass, M., N. Bolger, G. Castro, and B. Avitall. 1999. The effect of physiologic home monitoring and telemanagement on chronic heart failure outcomes. The Internet Journal of Asthma, Allergy and Immunology 3(2).

12.

Boyle, J.P., A.A. Honeycutt, K.M. Venkat Narayan, T.J. Hoerger, L.S. Geiss, H. Chen, and T.J. Thompson. 2001. Projection of diabetes burden through 2050: Impact of changing demography and disease prevalence in the United States . Diabetes Care 24(11): 1936-40 .

13.

Burton, L.C., G.F. Anderson, and I.W. Kues. 2004. Using electronic health records to help coordinate care . Milbank Quarterly 82(3): 457-81 .

14.

Center for Telemedicine Law. 2003. “ Telemedicine Reimbursement Report.” Retrieved from ftp://ftp.hrsa.gov/telehealth/licen.pdf.

15.

Chang, B.L., S. Bakken, S.S. Brown, T.K. Houston, G.L. Kreps, R. Kukafka, C. Safran, and P.Z. Stavri. 2004. Bridging the digital divide: Reaching vulnerable populations. Journal of the American Medical Informatics Association 11(6): 448-57.

16.

Cherry, J.C., T.P. Moffatt, C. Rodriguez, and K. Dryden. 2002. diabetes disease management program for an indigent population empowered by telemedicine technology . Diabetes Technology & Therapeutics 4(6): 783-91 .

17.

Chetney, R. 2003. Home care that doesn't miss a beat . Home Healthcare Nurse 21(10): 681-86 .

18.

Cutler, D.M., and R.J. Zeckhauser . 2000. The anatomy of health insurance. Handbook of Health Economics 1A, Chapter 11. Amsterdam , the Netherlands: Elsevier .

19.

Diabetes Control and Complications Trial Research Group (DCCT). 1993. The effect of intensive treatment of diabetes on the development and progression of long-term complications in insulin-dependent diabetes mellitus . New England Journal of Medicine 329(14): 977-86 .

20.

Dunn, D.L. 1998. Applications of health risk adjustment: What can be learned from experience to date? Inquiry 35(2): 132-47 .

21.

Edmonds, M., M. Bauer, S. Osborn, H. Lutfiyya, J. Mahon, G. Doig, P. Grundy, C. Gittens, G. Molenkamp, and D. Fenlon. 1998. Using the vista 350 telephone to communicate the results of home monitoring of diabetes mellitus to a central database and to provide feedback. International Journal of Medical Informatics 51: 117-25 .

22.

Ellis, R.P., and T.G. McGuire. 1990. Optimal payment systems for health services . Journal of Health Economics 9(4): 375-96 .

23.

Feldman, R., and B. Dowd. 2000. Risk segmentation: Goal or problem? Journal of Health Economics 19(4): 499-512 .

24.

Field, M.J., and J. Grigsby. 2002. Telemedicine and remote patient monitoring. Journal of the American Medical Association 24(31): 423-25 .

25.

Friedman, R.H. 1998. Automated telephone conversations to assess health behavior and deliver behavioral interventions. Journal of Medical Systems 22(2): 95-102 .

26.

Friedman, R.H., L.E. Kazis, A. Jette, M.B. Smith, J. Stollerman, J. Torgeson, and K. Carey. 1996. A telecommunications system for monitoring and counseling patients with hypertension. American Journal of Hypertension 9: 285-92 .

27.

Gans, D., J. Kralewski, T. Hammons, and B. Dowd. 2005. Medical group's adoption of electronic health records and information systems . Health Affairs 24(5): 1323-33 .

28.

Giuffrida, A., and H. Gravelle. 2001. Inducing or restraining demand: The market for night visits in primary care . Journal of Health Economics 20(5): 755-79 .

29.

Goodman, C. 2005. Savings in electronic medical record systems? Do it for the quality . Health Affairs 24(5): 1124-26 .

30.

Gottlieb, L.K., E.M. Stone, D. Stone, L.A. Dunbrack, and J. Calladine. 2005. Regulatory and policy barriers to effective clinical data exchange: Lessons learned from MedsInfo-ED . Health Affairs 24(5): 1197-1204 .

31.

Grazier, K.L., and L.L. Eselius. 1999. Mental health carve-outs: Effects and implications . Medical Care Research & Review 56(Suppl. 2): 33-55 .

32.

Grigsby, J., and J.H. Sanders. 1998. Telemedicine: Where it is and where it's going . Annals of Internal Medicine 129: 123-27 .

33.

Hakansson, S., and C. Gavelin. 2000. What do we really know about the cost-effectiveness of telemedicine? Journal of Telemedicine and Telecare 6(S1): 133-36 .

34.

Hersh, W.R., M. Helfand, J. Wallace, D. Kraemer, P. Patterson, S. Shapiro, and M. Greenlick. 2001. Clinical outcomes resulting from telemedicine interventions: A systematic review . BMC Medical Informatics and Decision Making 1(5).

35.

Hillestad, R., J. Bigelow, A. Bower, F. Girosi, R. Meili, R. Scoville, and R. Taylor. 2005. Can electronic medical record systems transform health care? Potential health benefits, savings, and costs . Health Affairs 24(5): 1103-17 .

36.

Institute of Medicine, Committee on Evaluating Clinical Applications of Telemedicine. 1996. Telemedicine: A guide to assessing telecommunications in healthcare, ed. Marilyn J. Field. Washington, DC: National Academy Press .

37.

Institute of Medicine, Committee on Improving the Patient Record. 1997. The computer-based patient record: An essential technology for healthcare, eds. Richard S. Dick, Elaine B. Steen, and Don E. Detmer. Washington, DC: National Academy Press .

38.

Institute of Medicine. 2003a. “ Key Capabilities of an Electronic Health Record System: Letter Report.” Retrieved January 8, 2006, from http://www.nap.edu .

39.

———. 2003b. “ Priority Areas for National Action: Transforming Healthcare Quality .” In Committee on identifying priority areas for quality improvement, eds. K. Adams and J. Corrigan, 1-13. Washington, DC: National Academies Press.

40.

International Diabetes Federation (IDF). 2006 . “Diabetes Prevalence.” Retrieved January 8, 2006, from http://www.idf.org/home/index.cfm?node=264 .

41.

Jerant, A., A. Rahman, and N.S. Thomas. 2001. Reducing the cost of frequent hospital admissions for congestive heart failure: A randomized trial of a home telecare intervention . Medical Care 39(11): 1234-45 .

42.

Jha, A.K., J.G. Kuperman, M.T. Jonathan, L. Leape, B. Shea, E. Rittenberg, E. Burdick, D.L. Seger, M.V. Vliet, and D.W. Bates. 1998. Identifying adverse drug events. Journal of the American Medical Informatics Association 5(3): 305-14.

43.

Kaiser Permanente. 2002. “ Kaiser Permanente Annual Report. Quality You Can Trust.” Retrieved from http://xnet.kp.org/annualreport/2002/kp_report_2001_2.pdf .

44.

Katz, M.L., and C. Shapiro. 1994. Systems competition and network effects . Journal of Economic Perspectives 8(2): 93-115 .

45.

Krishna, S., B. Francisco, A. Balas, P. König, G. Graff, and R. Madsen. 2003. Internet-enabled interactive multimedia asthma education program: A randomized trial . Pediatrics 111(3): 503-10 .

46.

Laffont, J., and J.-J. Tirole. 1998. Regulation of quality. In A theory of incentives in procurement and regulation, Chapter 4 (3rd ed.). Cambridge, MA: MIT Press .

47.

Lahtela, J.T., and H. Lamminen. 2002. Telemedical devices in diabetes management. Annals of Medicine 34: 241-47

48.

Lloyd-Jones, D.M., M.G. Larson, E.P. Leip, A. Beiser, R.B. D'Agostino, W.B. Kannel, J.M. Murabito, R.S. Vasan, E.J. Benjamin, and D. Levy. 2002. Lifetime risk for developing congestive heart failure—the framingham heart study . Circulation 106(24): 3068-72 .

49.

Ma, C.A. 1994. Healthcare payment systems: Cost and quality incentives . Journal of Economics and Management Strategy 3(1): 93-112 .

50.

Ma, C.A., and T.G. McGuire. 1997. Optimal health insurance and provider payment . American Economic Review 87(4): 685-704 .

51.

Marta, M.R. 2003. Telemedicine payment: Then and now—Medicare/Medicaid—a discussion of the development of telemedicine. Healthcare Financial Management, July 2003. Retrieved January 8, 2006, from http://www.findarticles.com/p/articles/mi_m3257/is_7_57/ai_105501127/print .

52.

Meyer, M., R. Kobb, and P. Ryan. 2002. Virtually healthy: Chronic disease management in the home. Disease Management 5(2): 87-94 .

53.

Mokdad, A.H., E.S. Ford, B.A. Bowman, W.H. Dietz, F. Vinicor, V.S. Bales, and J.S. Marks. 2003. Prevalence of obesity, diabetes, and diabetes-related health risk factors, 2001. Journal of the American Medical Association 289(1): 76-79.

54.

National Library of Medicine. 2001. “ Medical Subject Headings (MeSH) 2001.” Retrieved January 8, 2006, from http://www.nlm.nih.gov/cgi/mesh/2K/MB_cgi?term=Medical+Informatics&field=entry#TreeL01.700.

55.

Newhouse, J.P. 1994. Patients at risk: Health reform and risk adjustment . Health Affairs 13(1): 132-45 . ———. 1996. Reimbursing health plans and health providers: Efficiency in production versus selection . Journal of Economic Literature 34: 1236-63 .

56.

———. 1998. Risk adjustment: Where are we now? Inquiry 35(2): 122-31 .

57.

Obenshain, M.K. 2004. Application of data mining techniques to healthcare data. Infection Control and Hospital Epidemiology 25(8): 690-95 .

58.

O'Brien, J.A., L.A. Shomphe, P.L. Kavanagh, G. Raggio, and J.J. Caro. 1998. Direct medical costs of complications resulting from type 2 diabetes in the U.S . Diabetes Care 21(7): 1122-28 .

59.

Perlin, J.B., D.A. Collins, and L.G. Kaplowitz. 1999. Telemedicine . Hospital Physician 36: 26-34 .

60.

Puskin, D.S. 2001. Telemedicine: Follow the money . Online Journal of Issues in Nursing 6(3), manuscript 1. Retrieved January 8, 2006, from http://www.nursingworld.org/ojin/topic16/tpc16_1.htm.

61.

Robinson, J.C. 1999. Blended payment methods in physician organizations under managed care. Journal of the American Medical Association 282: 1258-63 .

62.

Rogers, M.A.M., D. Small, D.A. Buchan, C.A. Butch, C.M. Stewart, B.E. Krenzer, and H.L. Husovsky. 2001. Home monitoring service improves mean arterial pressure in patients with essential hypertension . Annals of Internal Medicine 134: 1024-32 .

63.

Roglieri, J.L., R. Futterman, K.L. McDonough, G. Malya, K.R. Karwath, D. Bowman, J. Skelly, and S.W. Warburton. 1997. Disease management interventions to improve outcomes in congestive heart failure . Journal of American Managed Care 3(12): 1831-39 .

64.

Rosenthal, M.B., R.G. Frank, J.L. Buchanan, and A.M. Epstein. 2002 . Transmission of financial incentives to physician by intermediary organizations in California . Health Affairs 21( 4 ): 197-205 .

65.

Rosenzweigh, J.L., K. Weinger, L. Poirier-Solomon, and M. Rushton. 2002. Use of a disease severity index for evaluation of healthcare costs and management of comorbidities in patients with diabetes mellitus . American Journal of Managed Care 8(11): 950-58 .

66.

Roth, A., M. Golovner, N. Malov, Z. Carthy, R. Naveh, I. Alroy, E. Kaplinsky, and S. Laniado. 1999. The “telepress” system for self-measurement and monitoring of blood pressure (the SHALA experience in Israel) . American Journal of Cardiology 83: 610-12 .

67.

Sawin, C.T., D.J. Walder, D.S. Bross, and L.M. Pogach. 2004. Diabetes process and outcome measures in the department of veterans affairs . Diabetes Care 27(Suppl. 2), B90 .

68.

Schiller, A.E., M. Bondmass, and B. Avitall. 1997. Technology-based home care for disease management. Remington Report (September/October): 10-12.

69.

Shea, S., J. Starren, R. Weinstock, P. Knudson, J. Teresi, D. Holmes, W. Palmas, L. Field, R. Goland, C. Tuck, G. Hripcsak, and L. Capps. 2002. Columbia university's informatics and telemedicine (IDEATel) project: Rationale and design. Journal of the American Medical Informatics Association 9(1): 49-62.

70.

Shy, O. 2001. The Economics of network industries . Cambridge , UK: University of Cambridge Press . Strum, D.P., A.R. Sampson, J.H. May, and L.G. Vargas. 2000. Surgeon and type of anesthesia predict variability in surgical procedure times . Anesthesiology 92(5): 1454-66 .

71.

Stumpf, S.H. 2003. Telemedicine awaits: Reimbursement will mean big change and real money . Healthcare Informatics, May 2003. Retrieved January 8, 2006, from http://www.healthcare-informatics.com/issues/2003/05_03/stumpf.htm.

72.

Surgeon General. 1999. Organizing and financing mental health services. In Mental health: A report to the surgeon general, chapter 6. Retrieved January 8, 2006 , from http://www.surgeongeneral.gov/library/mentalhealth/toc.html#chapter6 .

73.

Tirole, J. 1989. The theory of industrial organization. Cambridge, MA: MIT Press .

74.

UK Prospective Diabetes Study Group (UKPDS). 1998. Intensive blood glucose control with sulphonylureas or insulin compared with conventional treatment and risk of complications in patients with type 2 diabetes . Lancet 352: 837-53 .

75.

Vogelsang I. 1999. Economic aspects of mental health carve-outs . Journal of Mental Health Policy and Economics 2: 29-41 .

76.

Vrijens, B., and E. Goetghebeur. 1997. Comparing compliance patterns between randomized treatments . Controlled Clinical Trials 18: 187-203 .

77.

Walker, E.A., and J.A. Usher. 2003. Understanding and enhancing adherence in adults with diabetes . Current Diabetes Reports 3(2): 141-8 .

78.

Wang, S.J., B. Middleton, L.A. Prosser, C.G. Bardon, C.D. Spurr, P.J. Carchidi, A.F. Kittler, R.C. Goldszer, D.G. Fairchild, A.J. Sussman, G.J. Kuperman, and D.W. Bates. 2003. A cost-benefit analysis of electronic medical records in primary care . American Journal of Medicine 114(5): 397-403 .

79.

White House, Office of the Press Secretary. “ Fact Sheet: Improving Care and Saving Lives Through Health IT.” Retrieved January 8, 2006, from http://www.whitehouse.gov/news/releases/2005/01/20050127-2.html .

80.

Whited, J.D., S. Datta, R.P. Hall, M.E. Foy, L.E. Marbrey, S.C. Grambow, T.K. Dudley, D.L. Simel, and E.Z. Oddone. 2003. An economic analysis of a store and forward teledermatology consult system. Telemedicine Journal and e - Health 9(4): 351-60 .