Prevention pays, but not in the short term

The notion that it’s in society’s best interest to help people avoid diabetes and its debilitating, costly complications is muddied by America’s fragmented healthcare system.

From the point of view of a health insurance industry bean counter, the business case for diabetes management is weak.

Understanding why requires putting some statistics together.

There’s no doubt that, without better efforts at preventing and controlling diabetes, medical costs will soar. Over the next 30 years, the epidemic will lead to 35 million heart attacks, 13 million strokes, 6 million episodes of kidney failure, 8 million people needing eye surgery or going blind, 2 million amputations and 62 million early deaths, according to a study by the American Diabetes Assn. and a consulting company, Archimedes Inc. The costs could total $6.6 trillion.

The study also found that if 80% of people with diabetes stopped smoking, controlled their blood pressure, cholesterol and blood glucose, took a baby aspirin a day and lost weight, complications would fall, saving about $150 billion over 30 years.

“I think if our society as a whole decided to focus more on health promotion and disease prevention, in the long term you would see substantial savings to the health system,” says Dr. Anthony Shih, senior program officer at the Commonwealth Fund, an independent healthcare research foundation.

But much of America’s healthcare industry operates on the economic short term. Many healthcare experts used to think that preventive care would save money -- which is the case for diseases such as asthma, where such care can quickly cut costs by reducing emergency room care and hospitalizations.

But for diabetes, the upfront efforts to avoid complications often don’t pay off for decades.

One analysis, published in 2003 in the journal Health Affairs, looked at two groups, HealthPartners in Minneapolis and Independent Health Plan in Buffalo, N.Y., each with an intensive diabetes management program.

Researchers found that the two programs resulted in lowered hospitalizations and complications, ultimately saving $75 per patient after 10 years. But saving that money cost a lot at first -- an average of $330 per patient over the decade. The payoff didn’t come until the very end.

During the 10th year, managing the disease saved $1,500 per patient, and savings were expected to continue.

So if an insurer could count on keeping the same people in their plans for a decade, it would make financial sense to pay the upfront costs and wait for the benefits to roll in.

But that doesn’t happen. “It’s rare for anyone to stay in a health plan for that long,” Shih says.

People in the U.S. change health plans about every five to six years. Divorce, marriage, a pink slip, a new job, or an employer switching health plans can all force people from one plan to another. The average annual turnover rate for plans is 17%, according to surveys by the Commonwealth Fund.

By the time an insurer could reap the return on the initial investment, the diabetes patients whose care they have carefully managed are saving their next health insurer money, says David Knutson of the Park Nicollet Institute, a health research organization based in Minneapolis.

Thus, even though HealthPartners and Independent Health Plan were projected to more than break even in the end, the 2003 paper concluded that “because of enrollee turnover, both organizations might not be able to realize that return.”

There are some exceptions, and changes in the offing. Kaiser Permanente in Southern California, for example, has a much lower turnover rate than other insurers. People stay with that plan long enough for the organization to realize the benefits of preventing complications. Kaiser is recognized by the American Diabetes Assn. for the quality of its diabetes care. It offers team management, with specialists, primary care doctors, nurses, pharmacists, nutritionists and educators.

Another California group, the Integrated Healthcare Assn., has seven California health plans in its membership and offers an incentive that may make intensive diabetes care more cost-effective for individual physicians.

The new incentive pays doctors a yearly bonus for quality care, including meeting certain diabetes-management guidelines such as control of blood sugar, blood pressure and cholesterol level. Last year, the group distributed $55 million in bonus money to its physicians.

People move around from health plan to health plan, but chances are they end up with another doctor in the group, says Dolores Yanagihara, manager of the association’s incentive program. Everyone stands to benefit from everyone else’s careful patient management.

But experts say that more sweeping change is needed.

“We’re talking about complete health system reform,” Shih says. “Now, we pay the most money for people once they’re acutely ill, and the least money on fundamental prevention.”

Sooner or later, the bill for long-term complications comes due. By that time, people who have gotten the disease in their 40s or 50s may have aged into Medicare coverage.

And as the disease increasingly strikes younger adults and even children, many could lose their jobs due to complications such as blindness, stroke or amputation, becoming uninsurable long before the Medicare age of 65. Without employer-sponsored health insurance, their preexisting conditions could render individual insurance unaffordable.

For the growing crop of youngsters diagnosed with diabetes, that could be devastating when they leave home and lose parental coverage.

“Every person I take care of will eventually be uninsured,” says Dr. Francine R. Kaufman, head of endocrinology and metabolism at Childrens Hospital Los Angeles and a USC pediatrics professor.

Those who can no longer earn a living could qualify for Medicare, even before the age of 65, after 24 months on Social Security Disability Insurance. If poor enough, they could qualify for the state program, MediCal.

In other words, says Dr. C. Ronald Kahn, president and director of the Joslin Diabetes Center in Boston, “the government is ultimately going to pay for those people.”

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susan.brink@latimes.com