Nurse Patricia Carpenter traded in her stethoscope for a headset yesterday morning.
That's when Carpenter and about 60 other registered nurses at American Healthways Inc. in Columbia started making house calls -- by phone -- to 20,0000 randomly selected Medicare beneficiaries in the District and Maryland.
They are part of an experiment, trying to figure out whether nurses monitoring patients from privately run call centers can improve the health and keep down the costs of some of Medicare's most difficult and expensive patients: the growing number of elderly Americans suffering from diabetes or congestive heart problems or both.
From rows of desks at their spacious sunlit call center, they will explain test results, suggest ways to reduce pain, remind patients to fill a prescription or even arrange rides to the doctor. The goal is to make sure patients get the care they need to head off costly complications and hospital visits.
For Carpenter, a registered nurse who specialized in dialysis care, the work is very different indeed. "On the phone, we only have a few minutes to win a person's trust," she said. "We have to find a lead-in to their lives to get them engaged and interested."
The Centers for Medicare and Medicaid Services have selected seven other firms to carry out similar programs in parts of Oklahoma, Pennsylvania, Mississippi, Georgia, Illinois, Florida and Tennessee.
All are vying to prove that they can reap the most money for the federal government, which may expand the program if it is a success.
But success will be measured by savings, and that's where the risk lies.
During the course of the three-year contracts, Medicare expects the costs of the people cared for by these firms to be 5 percent lower than the costs of a control group.
Companies that fail to meet the savings target must refund the fees they received from the program.
"The government does not want this program to be a money drain," said Brooks O'Neil, a senior research analyst at Dougherty & Co., an investment bank in Minneapolis that tracks the disease management industry.
For publicly traded American Healthways, based in Nashville, the Medicare contract is worth $20 million in its first year, and it expects to invest $14 million to market and launch the program, O'Neil said.
American Healthways will also act as a subcontractor on another contract that Medicare awarded to Cigna Healthcare, which will administer a similar program in Georgia.
Many firms are willing to take such chances in order to gain a foothold in Medicare, the single largest health program in the United States, said Christobel Selecky, president of the Disease Management Association of America.
"Everybody is fighting for the same health care dollar and along we come and say: 'Hey, we have this wonderful solution,' " said Selecky, who is also executive chairman of LifeMasters Supported SelfCare Inc., a California firm that won the Oklahoma contract.
"Frankly, the only way to get anybody to believe us is to put our money where our mouth is, which means putting our fees at risk," she said.
The disease management concept gained momentum through the last half of the 1990s when health care premiums started rising and never stopped, Selecky said.
The concept was first embraced by some health insurance companies (which usually hired firms like American Healthways), then by self-funded employers, by some state Medicaid agencies and, now, the federal government.
Medicare chose to focus on diabetes and congestive heart failure because they consume a disproportionate share of Medicare dollars, said Mark McClellan, head of the Centers for Medicare and Medicaid Services.
Of Medicare's more than 40 million beneficiaries, about 14 percent have congestive heart problems and 18 percent have diabetes. Yet they account for 43 percent and 32 percent of Medicare spending, respectively.
That is why "we are trying to turn Medicare into a prevention-oriented program," McClellan said.
Back at the call center in Columbia, photos will soon go up on the walls to remind nurses of the faces of the elderly they are engaging in conversation. To muffle surrounding chatter, acoustic tiles have been installed in the ceiling and white noise is piped in by speaker.
The noise level inside the center should rise by year's end. The call center is expected to have 184 full-time employees by the end of August and more than 200 within the next year, most of them nurses working on American Healthways contracts, including the Cigna one.
Yesterday, Maryland Gov. Robert L. Ehrlich Jr. (R) made the Columbia center's ceremonial first call to a Medicare recipient named Dorothy Eaton.
But even before then, the Medicare program was notifying selected beneficiaries by mail about the program's launch, said Catherine Rabune, executive director of the American Healthways center.
Since last week, the center had received more than 250 calls from interested beneficiaries, almost all of them positive, Rabune said. But the nurses -- who underwent five weeks of training -- could not start making calls until yesterday's launch.
Even now, they do not initiate the calls. A computer just outside the call center does the dialing. As the ring reaches a nurse's headset, a screen pops up on the nurse's computer screen with the beneficiary's information.
And then the exchange begins. Carpenter, a nurse for more than 15 years, said she's ready for the challenge of managing patient care from a distance. The success of her work, she said, hinges on making an emotional connection with patients.
"You can hear depression, pain, sorrow; an inflection in the voice says a lot," Carpenter said. "You put on those headsets and you drown out every other sound."
Staff writer John Wagner contributed to this report.