Chapter 8: Health and Human Services
Improve Asthma Treatment
Disease state management (DSM) applies proven clinical practices, including
patient education, technical assistance, and risk management, to ensure the
appropriate and cost-effective use of medication and specialized treatments in
high-cost, chronic illnesses. Texas should create a DSM pilot program for
pediatric asthma, the most common chronic illness in Texas children.
Asthma affects 15 million people in the United States and causes 470,000
hospitalizations annually. Asthma patients can generate charges of up to $46,000
per hospital visit and $100,000 or more in annual asthma-related expenditures
According to the Asthma and Allergy Foundation of America, the cost of asthma
in the United States was estimated at $11.3 billion in 1998, with direct costs
accounting for $7.5 billion and indirect costs totaling another $3.8 billion.
Hospitalizations were the most expensive component of these
costs. A September 2000 study by the
foundation estimated Texas’ direct medical expenditures and indirect costs
for asthma at $763 million in 1994 (the most current data available). Direct
medical expenditures were estimated at $434.9 million, while indirect costs
(from lost productivity and lost school days) accounted for $328.1
According to the American Lung Association, about 1.1 million Texans have
asthma, including 674,000 adults and more than 401,000 children under the age of
15. Asthma is now the most common chronic
illness in children both in Texas and in the
nation. Asthma is the leading cause of school
absenteeism for children under 16 years of age; children with asthma miss twice
as many school days as those without asthma.
In fiscal 1999, Texas’ Medicaid program provided treatment for more than
123,000 asthma patients at a total cost of $41.6
When left untreated or treated incorrectly, asthma can lead to serious,
life-threatening, and costly conditions. Chronic obstructive pulmonary disease
and related conditions, including asthma, emphysema, and chronic bronchitis,
claimed the lives of 6,597 Texans in 1998, making them the state’s fifth
most common cause of death.
Disease State Management
In 1997, the Journal of Pediatric Nursing reported that one-fourth of
all children and a third of all adults have chronic diseases that could benefit
from disease state management (DSM). DSM is
designed to improve the care given to those with expensive, lifetime chronic
diseases such as asthma, while reducing the costs of care. In addition to
asthma, DSM has been applied to diabetes, smoking cessation, cardiovascular
disease, congestive heart failure, oncology, prostate and breast cancer,
Alzheimer’s disease, HIV, neonatal care, cholesterol-lowering therapy, and
DSM applies proven clinical practices, including patient education, technical
assistance, and risk management, to ensure the appropriate use of medication and
specialized treatments in high-cost cases. It can improve health outcomes for
asthmatics by developing better communication and integration of services among
physicians and other health care providers, and by promoting useful clinical
guidelines for treatment. DSM can include wellness programs, information
dissemination for physicians, clinics staffed and managed by specialized nurses
with advanced training, and measures designed to ensure the appropriate use of
medication and specialized treatments. Some states and many private companies
have instituted DSM programs to manage high-cost cases and
DSM protocols for managing asthma can produce quantifiable savings and
measurable outcomes. At least two states, Florida and Virginia, have implemented
DSM for asthma and realized savings as a
Information Technology (IT) in DSM
A successful DSM program integrates health care delivery systems and
distributes clinical and administrative information quickly and efficiently. IT
systems provide valuable assistance to DSM programs by providing data to support
decisions based on the most current practice guidelines, and facilitating the
analysis of practice patterns and outcomes.
Internet access can ease communication and circulate educational materials among
doctors, other health care providers, and patients.
Texas DSM Programs
Texas currently has one Medicaid pilot DSM project for diabetics. The 1997
Legislature, through the Medicaid Diabetes Pilot Project, required private
insurers and managed care organizations to reimburse health care practitioners
for delivering diabetes self-management training programs. This legislation also
established the basis for the adoption of standard-of-care guidelines for
diabetics. (Self-management training programs and standards of care are
integral parts of DSM programs.)
The University of Texas M.D. Anderson Cancer Center has instituted a DSM
program to lower costs and provide better outcomes for cancer patients. The
center’s Cancer Manager program, which was launched in 1996, provides its
patients with a customized continuum of care covering prevention, diagnosis,
treatment, and follow-up services. M.D. Anderson has enrolled several provider
companies and more than 200,000 patients in the
At the request of the Texas Pharmacy Association, the Texas Tech School of
Pharmacy has developed a proposal for a Medicaid DSM demonstration project for
diabetes. Community pharmacists would collaborate with physicians to provide
care for “Type 2” diabetics—a condition commonly referred to
as adult-onset diabetes. At this writing, this proposal is being reviewed by a
six-member advisory panel of pharmacists and physicians assembled by the Texas
Health and Human Services Commission.
The Texas Medication Algorithm Project (TMAP) is a collaborative program
begun in 1996 to develop, implement, and evaluate guidelines for the medication
used to treat major psychiatric adult disorders. The project, led by the Texas
Department of Mental Health and Mental Retardation, has developed medication
treatment guidelines for schizophrenia, major depressive disorder, and bipolar
disorder; these are due for medical journal publication in November
DSM in Other States
Virginia has implemented statewide DSM programs, collectively called the
Virginia Health Outcomes Partnership, for asthma, chronic obstructive pulmonary
disease, diabetes, depression, hypertension/congestive heart failure, and
gastroesophogial reflux/peptic ulcer disease. The first disease chosen for the
program was asthma, due to the potential for cost savings and improved patient
outcomes. The pilot Medicaid DSM asthma program began in 1994 and was
implemented throughout Virginia in September 1997.
As part of the asthma DSM program, Virginia mails clinical summaries about
treatments, drug recommendations, and lifestyle changes to pharmacists and
physicians on a quarterly basis. The state also provides model patient profiles
to health care providers to help them target patients at risk from asthma. The
partnership has resulted in a 25 percent drop in emergency room visits and
urgent care services among the asthma patients of physicians participating in
Florida has DSM programs for Medicaid clients with asthma, AIDS, and
hemophilia. Florida also recently created a congestive heart failure and
end-stage renal disease program for Medicaid, with plans to create Medicaid DSM
programs for cancer, sickle cell anemia, and hypertension.
Florida will measure DSM outcomes through emergency room visits, hospital
inpatient visits, hospital lengths of stay, rehospitalizations, improved patient
knowledge and satisfaction, improved care, reduced costs, and patient and
provider education and interaction. The
state automatically enrolls Medicaid recipients with relevant medical conditions
in its DSM programs, with the option to drop out at any time, and encourages
doctors to refer patients to the
State law should be amended to require the Health
and Human Services Commission (HHSC) to create a Medicaid Disease State
Management (DSM) pilot program for pediatric asthma.
The Texas Department of Health (TDH) should determine the best location for
the pilot program, preferably a county with a high incidence and a high hospital
emergency room rate for pediatric asthma, and administer the program under the
direction of HHSC. HHSC should apply for necessary Medicaid waivers. TDH should
be required to report on the cost-effectiveness of the program to the
Legislature by December 1, 2004. This report should identify other areas in
which DSM-based treatment could be cost-effective.
The fiscal impact of this recommendation cannot be determined at this time
because the location and size of the DSM Medicaid pilot program are not yet
Startup costs should be minimal and should be offset by savings realized by
decreasing the deleterious effects of asthma, reducing emergency room visits and
 Paul M. Greenberger,
M.D.,“Preventing the Emergence of the $100,000 Asthmatic,” March 10,
[2 ] Asthma and Allergy
Foundation of America, “Asthma and Allergy Information”
[3 ] Asthma and Allergy
Foundation of America, “Asthma and Allergy Information”
[4 ] Interview with Robin
Anderson, director of the Texas chapter of the American Lung Association,
Austin, Texas, March 1, 2000.
[5 ] Asthma and Allergy
Foundation of America, “Asthma and Allergy Information.”
[6 ] Maggie Kownaski,
“The Public Toll of Asthma,” Disease Prevention (April 24,
2000), p. 1.
 Texas Department of
Health, “Compass 21 System,” Austin, Texas, May 25, 2000.
 Texas Department of Health,
Texas Vital Statistics 1998.
 Christine Golazeski Leyden,
“Preventing Insurance Denials: Disease Management,” Journal of
Pediatric Nursing (September 19, 1997), p. 28.
 Lindsay R. Resnick,
“Disease Management Changing the Dynamics,” National
Underwriter (April 28, 1997), p. 10.
 Interview with Dr. Louis
F. Rossiter, professor of Health Economics, Institute for Outcomes Research,
Medical College of Virginia, Virginia Commonwealth University, Richmond,
Virginia, February 29, 2000; and Florida Agency for Health Care Administration,
“Florida Medicaid’s Disease Management Initiative,” by Ruben
J. King-Shaw, Jr., Tallahassee, Florida, February 29, 2000.
[12 ] Gray Ellrodt et al,
“Evidence-Based Disease Management,” Journal of the American
Medical Association (November 26, 1997), p. 1,687.
[13 ] The National
Pharmaceutical Council, Disease Management, Balancing Cost and Quality
(Reston, Virginia, October 1999), pp. 4, 7.
[14 ] The University of Texas
M.D. Anderson Cancer Center, “Cancer Manager—Opening the Door to
Quality Cancer Care,” Conquest (Winter 1998), p. 23.
[15 ] Texas Medical
Association, “Disease Management, A Summary of Research,” by the
Council on Scientific Affairs of the Texas Medical Association, prepared for the
TMA forum on DSM, February 29, 2000, p. 3.
[16 ] Interview with Dr.
Steven P. Shon, director of the Texas Medication Algorithm Project, Texas
Department of Mental Health and Mental Retardation, Austin, Texas, October 19,
[17 ] E-mail from Dr. Charles
A. Shasky, project manager, Virginia Health Outcomes Partnership, the Williamson
Institute for Health Studies, Medical College of Virginia, Virginia Commonwealth
University, Richmond, Virginia, May 15, 2000.
[18 ] State of Florida,
Agency for Health Care Administration, “Florida Medicaid’s Disease
Management Initiative,” February 29, 2000, p. 6.
[19 ] Interview with Dr.
Louis F. Rossiter, professor of Health Economics, Institute for Outcomes
Research, Medical College of Virginia, Virginia Commonwealth University,
Richmond, Virginia, February 29, 2000; and Florida Agency for Health Care
Administration, “Florida Medicaid’s Disease Management
Initiative,” by Ruben J. King-Shaw, Jr., Tallahassee, Florida, February