Because it resembles so many other offshoots of managed care, demand management is often greeted with contempt (if greeted at all) by physicians. But in its quest to reduce costs and improve care, demand management does something different: It focuses on patients.

Whereas typical cost-control tactics have fixated on managing the supply of health care resources and have largely been attempts to control provider behavior and to impose barriers to access, demand management starts from the other side. It argues that to achieve cost-effectiveness, appropriate utilization and better health, physicians must first and foremost help patients make better health care decisions. It's an appealing premise.

“Something feels right about having patients more involved in and informed about their own care. Something looks right when accurate information becomes accessible and available at the time a person needs it. Something sounds right when individuals are asked to take part in their own health management and care,” says Wendy Lynch, PhD, of Lynch Consulting in Lakewood, Colo. Lynch was among the first to apply the demand management concept to the health care industry.

And while demand management, like anything else, can certainly be twisted into something undesirable, its patient focus feels almost revolutionary. “Patients have been missing in many of our equations,” says Lynch. “When we add them to the formula, many positive things can happen. Something is intuitively right about providing health care this way.”¹

But what is it?

Demand management is the process of empowering patients to make wiser health care decisions. It is not necessarily about reducing demand or keeping patients out of your practice. Rather, the goal is to engage patients in the quest for appropriate care.

If you doubt the necessity of managing demand, think about all the patients who press you to prescribe antibiotics for their colds or demand other interventions you know to be unwarranted. Multiply the effect out across the country, and consider that the United States spends an estimated $200 billion a year on unnecessary and inappropriate care.² To tackle this problem, demand management employs essentially two strategies:

• First, it seeks to reduce the need for services by improving patients' health. The emphasis here is on wellness, health promotion, risk reduction, prevention and early detection.

• Second, demand management attempts to improve patients' decisions. Patients may need to be taught, for example, when they need to see the doctor and when all they need is self-care. Tools such as patient education materials and telephone advice lines can aid the decision-making process.

The incentives

Demand management often goes hand in hand with capitation, where the incentive is to keep patients well and out of your office, in part so you can hang on to some of your prepaid compensation. But even in a fee-for-service environment, there are incentives for managing demand. When patients play a more active role in their care, the results are often better outcomes and increased patient satisfaction. That's good news whether you practice under fee for service or capitation. What's more, demand management might actually increase the use of some services, such as preventive visits.

Finally, although a full-blown demand management program may bring little or no financial benefit to a fee-for-service practice, the ideas behind it (e.g., providing appropriate care, encouraging wellness, teaching patients when to seek care) fulfill part of your practice's mission. In other words, it's good medicine.

The bottom line

Your practice's resources may limit the amount of demand management you can do, of course. Triage services that offer patients advice or counseling over the phone, for example, are often too costly for the average family practice group. But even small practices can implement an effective demand management program on their own (see “Demand Management: Implementing Your Own Program”). Patient education, in particular, is one way every practice can empower patients with good information that will help them make better decisions (see “Demand Management: The Patient Education Connection”).

No one is in a better position to lead demand management than family physicians. Your role as clinician, counselor and teacher makes you more qualified, and perhaps more responsible, than any other person involved in your patients' care. Patients may indeed be the heart of demand management, but family physicians are its soul.