Carnegie Mellon, Blue Shield Study Shows Expanded Case ManagementFor Serious Illnesses Improves Health Outcomes, Reduces Costs

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New research shows a patient-centered case management program designed to improve healthcare quality and reduce medical expenses for those with complex or clinically advanced illnesses resulted in a 38 percent decrease in hospital admissions, reduced costs by more than $18,000 per patient and garnered high patient-satisfaction scores.

The study of Blue Shield of California HMO members, published in the February edition of The American Journal of Managed Care, examined the program's impact on those with illnesses like late-stage cancers — some of the most complex cases to treat.

According to authors Latanya Sweeney of Carnegie Mellon University, Andrew Halpert, M.D., and Joan Waranoff of Blue Shield of California, this is one of the first studies to quantify actual cost reductions that result from participation in this type of expanded case management program.

More comprehensive than usual case management interventions, patient-centered management (PCM) assigns highly trained nurses to provide extensive patient education and care coordination, as well as pain and end-of-life management. PCM helps patients select services, consider different treatment options and avoid unnecessary hospitalization and emergency room visits — in essence changing some patient behaviors and environments that impair their care or yield unnecessary healthcare expense. PCM was provided by ParadigmHealth.

"We're very pleased that this study validates our commitment to provide members with more effective, more personalized care," said Halpert, senior medical director for Blue Shield of California. "This program makes it easier for members to obtain the appropriate treatment and helps our efforts to control healthcare costs for all of our members."

The 18-month study followed 756 Blue Shield of California HMO members who were diagnosed with late-stage illness, most frequently an oncologic condition. All had access to the same benefits, provider network and HMO-approval process.

Approximately half of the participants were blindly assigned to a group that received usual case management (UCM), which included traditional coordination of services, approval processes and utilization-management practices. Those designated for the PCM program received all UCM services with additional support that included access to a registered nurse (RN) care manager, RN team manager and physician in active clinical practice. Care management RN interaction included home visits and an average of two weekly member calls. Each PCM participant also worked with a care manager to develop a series of goals focused on understanding their disease state and treatment options, pain management, and end-of-life decision-making.

The study results were very positive, according to Sweeney, director of the Data Privacy Lab at Carnegie Mellon and the study's lead author. Patients who received PCM had 38 percent fewer hospitalizations, a 22 percent increase in home care and suffered fewer treatment complications (e.g., nausea, anemia and dehydration) than patients who received usual case management. Many cancer patients in the PCM group opted against further chemotherapy or radiation treatments (42 percent less chemotherapy than the patients in the group receiving usual care). The PCM group also had 62 percent more days in hospice care than the usual care group. Moreover, participant satisfaction scores were highly favorable.

The lifespan assessment remained the same for both participating groups, indicating that PCM can deliver cost-effective care with no adverse effect on survival.

"As a cancer patient I have had challenges and burdens unimaginable," says one 50-year-old program participant. "The (PCM) program has actually made me want to fight that much harder. My care manager was in constant contact and pulled me through all the obstacles a cancer patient must endure to receive the much-given treatment as well as second opinions I have used."

Overall, the study concluded that the PCM effectively reduced overall costs by 26 percent. The savings were realized in patients having fewer costly hospital days and emergency room visits, with care shifting to less costly home care and hospice settings when appropriate. Other findings included:

  • Hospital admissions were reduced by 38 percent;
  • Hospital days were reduced by 36 percent;
  • Emergency room visits were reduced by 30 percent;
  • Home care was increased by 22 percent;
  • Hospice use was increased by 62 percent.
The average combined utilization cost of the PCM cohort was $49,742 per patient for the 18-month study duration, compared with $68,341 in the UCM cohort, with average savings of about $18,599 per patient. After accounting for the additional cost of the program, the return on investment was 2:1.

Sweeney, associate professor of computer science, technology and policy at Carnegie Mellon, recognized that conducting this type of study under the restrictions of the Safe Harbor Provision of the Health Insurance Portability and Accountability Act (HIPAA) was problematic and even considered impossible by some health-care researchers. Many researchers falsely believed this type of study could only be done with special permissions and research exceptions. Under the safe harbor provisions of HIPAA rules, researchers must remove explicit "identifiers," such as name, date of birth and address, from patient records used in a study.

Rather than make the initial data anonymous and add new patients and information to that database each month, the researchers simply created a new anonymous database each month. This approach ensured patient privacy under provisions of HIPAA, which enabled the researchers to access the participants' records.

"This is great news for those in this population who typically face some of the most expensive complex health care needs," Sweeney said.

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About Blue Shield of California: Blue Shield of California, an independent member of the Blue Shield Association, is a not-for-profit healthcare company dedicated to providing Californians with access to high quality care at a reasonable price. Founded in 1939, it now has 3.2 million members, 4,300 employees, one of the largest provider networks and more than 20 office locations, providing a wide range of commercial and government products throughout the state. In 2005, the company contributed $30 million to the Blue Shield of California Foundation to fund nonprofit organizations that improve access to quality healthcare in California. Contact your local agent or broker for more information about Blue Shield products and services, or visit the Blue Shield Web site at

About Carnegie Mellon University: Carnegie Mellon University is a private research university with a distinctive mix of programs in engineering, computer science, robotics, business, public policy, fine arts and the humanities. More than 10,000 undergraduate and graduate students receive an education characterized by its focus on creating and implementing solutions for real problems, interdisciplinary collaboration, and innovation. A small student-to-faculty ratio provides an opportunity for close interaction between students and professors. While technology is pervasive on its 144-acre campus, Carnegie Mellon is also distinctive among leading research universities for the world-renowned programs in its College of Fine Arts. For more, see

About ParadigmHealth: ParadigmHealth is an integrator of care and disease management services for its health plan and employer clients. The company's care management services and innovative technologies work in concert to improve quality and lower costs by matching healthcare management resources with the individual needs of patients and their families. ParadigmHealth's services focus on the management of outlier patients — premature and medically complex neonates and patients with late-stage cancer, end-of-life care issues, multiple co-morbidities and severe trauma. Its Personal Health Record technology and Integrated Care Management technology integrate clients' delivery of services to their members and providers. ParadigmHealth has managed more than 100,000 outlier patients nationwide. Visit

Byron Spice | 412-268-9068 |