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E-CareManagement News

April 29, 2000


In the mid-1990s disease management (DM) outsourcing companies attempted to integrate their services into local delivery systems. They often encountered resistance from local providers (physicians and hospitals), who viewed the DM companies as outsiders.

Today a new wave of companies is beginning to develop Internet disease management (eDM) offerings. The challenge is similar: implementing and integrating eDM offerings into local delivery systems, which are often resistant to innovations of outsiders.

This essay will list and briefly describe some of the challenges experienced by DM outsourcing companies. We'll then describe the parallel eDM challenges. Finally, we'll suggest some implications and next steps.
Challenges experienced by DM outsourcing companies include:

1) Lack of program standardization antagonizes physicians
2) Gashing the doctor/patient relationship
3) Insufficient preparation for the "Moment of Truth"
4) The "FedEx Truck Phenomenon": Resistance to clinical guidelines


Disease management did not even enter the healthcare vocabulary until the mid-1990s. DM programs and services were first promoted by pharmaceutical companies, primarily to provide value added services to differentiate their drugs.

In the mid-1990s about 150 DM outsourcing companies were funded, mostly by venture capitalists and other equity investors.

DM outsourcing companies viewed health plans as primary purchasers of DM services (on behalf of their members). Services usually were organized around specific regional markets. Typical services included implementation and monitoring of care guidelines, medication monitoring, patient and physician education, case management, telephonic counseling and triage, and the like.

DM outsourcing companies experienced major challenges in integrating their services into local health care delivery systems. They were often viewed as outsiders. Their initial business models were described as "carve-outs", and their services were often viewed as taking away from existing local providers.

Internet focused DM companies will experience similar challenges in program implementation and integration.

A similar dynamic exists for Internet focused companies that are attempting to provide disease or care management services. Many other types of companies are contemplating providing DM services leveraging Internet technologies. (The April 1, 2000 issue of ECMN describes the wide variety of companies that are showing interest in eDM).


This section lists four challenges experienced by DM outsourcing companies a few years ago, and the parallel eDM challenges existing today:

1) Lack of program standardization antagonizes physicians. Here's what many physicians had to say about DM companies entering their communities 5 years ago: "I have contracts with a half dozen health plans and each of these health plans has contracts with a half dozen disease companies. This drives me crazy! Each DM company has their own way of doing things. I can't deal with 9 different sets of guidelines for each disease, 9 different reporting formats, 9 different information systems, 9 different case managers constantly calling me."

What's the parallel eDM challenge? Will physicians wind up saying: "All of these health portals have developed their own disease management programs. I can't deal with patients dragging in information from 20 different web sites, with 20 different clinical guidelines, in 20 different formats."

2) Gashing the doctor/patient relationship. Health plans initially started with carve-out contracting approaches with DM companies. A patient newly diagnosed with a disease or new to a health plan could be faced with the need to abandon her existing physician and establish a relationship with a specialist that had a contract with the health plan or DM company.

Patient to the DM company: "I've been diagnosed with cancer, am at one of most stressful points of my life....and you insist that I change doctors to take advantage of your DM program. Are you nuts....or just mean?"

Doctor to the DM company: "HOW DARE you take a patient away from my practice!?"

The eDM challenge: Patient - "You want me to go to a website instead of my doctor?????"

Doctor - "Your (health plan, employer, DM company) told you to go to WHICH website and do WHAT!?"

3) Insufficient preparation for the "Moment of Truth" The moment of truth occurs in the privacy of the doctor's office between the patient and physician. The moment occurs when the patient asks the physician:

"Doctor, I've been offered participation in a disease management program by my (health plan, hospital, employer, etc.). What do you think? Should I participate?"

How will the physician respond? DM outsourcing companies initially did little to anticipate this moment of truth, and all too often physicians responded "Dumb idea...ACME DM company doesn't know what they're doing...forget it," rather than "Great program....I heartily recommend it!" DM programs will live or die by this moment of truth.

What's the eDM challenge? The patient asks his physician "Doctor, I've been offered an Internet based disease management program by my health plan, hosptial,'s at What do you think? Should I participate?"

Will organizations engaged in eDM take the needed steps to develop physician support? (A study conducted by Laurus Health and referenced below noted that 67% of the consumers polled considered health Web sites recommended by their physician to be the most credible and trustworthy.)

4) The "FedEx Truck Phenomenon": Resistance to clinical guidelines. An earlier edition of E-CareManagement News described the FedEx Truck phenomenon. In short, this refers to the resistance incurred from local physicians when health plans or disease management vendors have had the FedEx Truck simply drop clinical guidelines off at doctors' doorsteps (instead of involving them in development and implementation of the guidelines). Physicians are still generally resistant to guidelines, particularly to ones in which they have had no input.

What's the eDM challenge? The Internet allows for 24 hour delivery of information - no longer is it necessary to wait until 10:30 AM to affront your local doctor. Every time a clinical guideline or algorithm is posted on the Internet, it might be perceived as an affront to the to the way individual physicians practice medicine today. Will physicians react any differently to guidelines posted on web sites than they do to one's dropped at their door by the FedEx Truck?


These are not easy issues to deal with.

Even the best thought out and implemented DM outsourcing companies continue to struggle with the issues described above.

...and while the safest way NOT to challenge local providers is to DO NOTHING, that's certainly NOT OUR RECOMMENDATION here. The spirit of this essay is to point out the landmines ahead, not to suggest that you turn around and go home.

So, here are a few practical suggestions of how to move ahead, yet in a way that offers the greatest probability of achieving the "clicks and mortar" integration promised by eDM programs:

1) Develop initiatives around local markets. Health care is still provided locally. Successful eDM initiatives will need to have a local market strategy and implementation. While Healtheon initially developed a strategy focusing on a national roll-out of its services, it has shifted to a regional strategy with a medical trading area (MTA) focus. This makes more sense.

2) Consider partnerships between Internet based and local health care organizations. This could include DM outsourcing companies, physician groups, health plans, hospitals, etc. Remain unconditionally constructive if your first overtures at partnership are rejected (and they often will be).

3) Involve local physicians early and sincerely. The downside? This can take A LOT of time. The alternative? The phrase "an elephant never forgets" was obviously coined before someone crossed a doctor while implementing a DM program. Many physicians are not inclined to offer second chances.

4) Think twice about doing anything that is perceived as getting in the middle of the doctor patient relationship. Ask "How can our eDM program support the patient/doctor relationship, rather than divide it?"

"Fooled once, shame on you. Fooled twice, shame on me."
Yiddish proverb


Mathematica Policy Research has published "Best Practices in Coordinated Care". The 176 page study examines best practices in care coordination for Medicare beneficiaries with chronic illnesses. The study also recommends design options for anticipated demonstrated projects.

Why is this study important? The Federal Government has made it clear that it would like to get out of its current role as an indemnity health insurer for seniors. An initial attempt to do this through legislation enabling Provider Sponsored Organizations (PSO) generated little enthusiasm or interest among providers. The Health Care Financing Administration (HCFA) is back at it again by exploring alternative financing options for care coordination services. This study is an early step in the development of congressionally mandated demonstration projects.

A key conclusion of the study: "Our findings suggest that care coordination holds the potential to reduce health care utilization while maintaining or improving the quality of care for chronic illness within the existing health care system."

The study makes five recommendations for features of demonstration programs:

1) Programs should follow the three steps (Assess and Plan, Implement and Deliver, Reassess and Adjust) for all enrolled patients.

  • Step one should conclude with a written plan of care.
  • Step two should include the establishment of an ongoing care coordinator-patient relationship, and the provision of excellent patient education.
  • Step three should include periodic reassessment of patients' progress
  • 2) Programs should have express goals of prevention of health problems and crises, and of early problem detection and intervention (a proactive approach, in other words).

    3) Disease-specific programs should incorporate national evidence-based or consensus-based guidelines into their interventions.

    4) Care coordinators should be nurses with at least a bachelor's degree in nursing.

    5) Programs should have significant experience in care coordination and should have evidence of having reduced hospital use or total medical costs.


    Media Metrix reports that the number of baby boomers and seniors on the Internet grew by 18.4% last year, making them the fastest growing Internet population. 


    The American Association of Retired Persons (AARP) has released its "National Survey on Consumer Preparedness and E-Commerce: A Survey of Computer Users Age 45 and Older".

    The study's findings suggest that healthcare ranks in the middle among various uses of the Internet:

    Percent Using Internet for Specific Purposes (from Figure 8)
    E-mail.................................. 90%
    Product/service info............... 73%
    Education/training................. 55%
    Purchasing merchandise....... 53%
    Travel................................... 50%
    Chatting interactively..............46%
    Newsgroups......................... 42%
    Financial planning..................30%
    Investing.............................. 24%
    Banking............................... 19%
    Auctioning............................ 18%
    Real estate........................... 17%
    Insurance............................. 10%
    Legal purposes..................... 10%
    Gambling............................... 4%

    Other key findings:

  • Only one in three computer users (32%) are "very confident" in their ability to use their personal computers for financial transactions.
  • 74% of those who have made Internet purchases are concerned (40% "very" concerned) about the privacy of information collected on them while they are making purchases on the Internet.
  • Among all Internet users, nearly eight in ten (77%) are concerned about their Internet activities being tracked without permission, including 50% who are "very" concerned.
  • Four in ten computer users surveyed (38%) rate themselves as "novice" computer users. Just over half (54%) call themselves "experienced," while only 8% rate themselves as "expert."
  • An overwhelming majority (93%) of those surveyed believe that any personal information they give to a business during a financial transaction remains the property of the consumer and that the information should not be shared with other businesses without the permission of the consumer, including 86% who "strongly" support this position.
  • A plurality of respondents (45%) would not permit businesses to share their financial information with other businesses under any conditions.
  • Implications noted by AARP:

  • Skill levels and confidence in using the computer vary substantially in the 45+ population.
  • Confidentiality of personal financial information is of utmost concern to this population. Virtually all those surveyed believe that any personal information given to a business during a financial transaction remains the property of the consumer.

    A study from examined consumer perceptions of credibility among health web sites. Key findings include:

  • 67% of the consumers polled considered health Web sites recommended by their physician to be the most credible and trustworthy, followed closely at 61 percent by Web sites sponsored by their doctor.
  • Health sites affiliated with doctors and hospitals scored high overall, with 56% of consumers trusting Web sites sponsored by their local hospital and 51% trusting sites sponsored by an alliance of doctors and hospitals.
  • Consumers place the least amount of credibility, according to the study, in sites that are sponsored by a company that sells products via the Internet (9%).
  • Other health Web sites perceived to be less credible are those consumers saw in a TV ad (13%); sponsored by a pharmaceutical company (21%); and those identified with the name of a famous doctor (28%).
  • Event sites recommended by a friend were viewed much lower in credibility at 32% than those affiliated with a doctor or hospital.

    The April 3, 2000 issue of the Industry Standard contains a special report - 14 articles relating to e-health and medical issues. 


    A report issued by the Society for Human Resource Management (SHRM) shows overall decreases from the previous year's survey in the number of employers that offer various benefits.

    Specific findings relating to health care benefits include:

  • The number of employers offering wellness benefits fell from 56% to 49%
  • Health screening programs continue to be popular, especially among larger employers, but still fell from 48% to 41% in 2000.
  • 65% of respondents offer on-site vaccinations (such as flu shots), an increase from 57% in 1999 

    The April 1, 2000 issue of ECMN referenced a framework developed by First Consulting Group. The framework describes a Five Stages of evolution for health web sites. The Five Stages are 1) Publish, 2) Interact, 3) Transact, 4) Integrate, 5) Transform. Health plan sites were found to be primarily in Stage 2, with a few pilots in Stage 3.

    Kaiser Permanente's web site for members is a pioneer in developing Stage 4 Integration among patients and caregivers.

    E-CareManagement News is an e-newsletter that tracks a major change in health care and managed care—the paradigm shift from “managing cost” to “managing care”.  This e-newsletter is brought to you by Better Health Technologies, LLC (  BHT provides consulting and business development services relating to disease management, demand management, and patient health information technologies.

    You may copy, reprint or forward this newsletter to friends, colleagues or customers, as long as the use is not for resale or profit and the following copyright notice is included intact. Copyright © 2000, Better Health Technologies, LLC. All rights reserved.

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