| NEW YORK, June 6
NEW YORK, June 6 The nation's largest experiment
in delivering medical care in an innovative way has reduced
costs and improved the quality of care even more in its second
year than in its first, according to the insurance company
The nonprofit CareFirst BlueCross BlueShield launched its
"Patient-Centered Medical Home" program in January 2011 among
primary-care providers serving about one-third of its 3.4
million members in Maryland, Washington, D.C., and northern
Like other "accountable care organizations" (ACOs), which
are centerpieces of President Barack Obama's healthcare reform,
the medical home program ties insurance payments to healthcare
providers to the quality of care they deliver.
On Thursday, CareFirst reported cost savings of $98 million
for the medical home program in 2012, compared with $38 million
the year before. Proponents of the model say it shows that
"bending the cost curve downward," as Obama described one of the
goals of his 2010 healthcare law, is achievable. If innovative
models like CareFirst's deliver as promised, it will ease the
financial pressures on Medicare, the government health insurance
program for the elderly and disabled, and make Obama's
healthcare reform more likely to succeed.
"This is a very important finding, that a major health plan
is able to achieve savings" of this magnitude, said Dr Elliott
Fisher, a health policy expert at the Dartmouth Institute for
Health Policy and Clinical Practice and an architect of
accountable care organizations.
Medical homes, like other ACOs, induce physicians to
coordinate care to make sure patients' prescriptions don't
interact adversely, for instance, and to think twice before
ordering unnecessary tests. Physicians who reduce costs while
hitting quality metrics such as regularly checking a diabetic's
eyesight receive awards in the form of higher payments.
In CareFirst's program, that incentive is substantial: a 29
percent bump in physician reimbursement rates. The insurer can
afford to be so generous because improving primary care, which
accounts for only 6 percent of medical spending, reduces far
pricier hospitalizations and specialist visits.
CareFirst's success is likely to accelerate other efforts to
move from a traditional fee-for-service model, where the more
tests and treatments physicians and hospitals do the more they
make, to one that rewards efficiency and quality. Twenty-nine
U.S. states now let primary-care providers act as
patient-centered medical homes for residents on the Medicaid
program for the poor, for instance.
Major insurers including UnitedHealth Group,
WellPoint, Aetna, Humana and Cigna are
also contracting with physicians to operate under an accountable
BUILDING UP SAVINGS
Skeptics have warned that any savings in programs like
medical homes would peter out after their first year, as
physicians eliminated the most obvious and easiest-to-cut waste,
and that further reductions would cut necessary care.
CareFirst has found otherwise.
One million of its members (almost all employed, with an
average age of 42) were in medical homes in 2012, the company
reported, and 80 percent of the primary-care providers in
CareFirst's network participate in the program. These members'
healthcare costs were $98 million (2.7 percent) less than
CareFirst projected. In 2011, the savings were 1.5 percent.
Most of the savings came from reduced hospital admissions,
less use of emergency rooms and lower spending on drugs, said
CareFirst Chief Executive Officer Chet Burrell.
Two-thirds of the 3,600 physicians and nurse practitioners
participating in the medical home program earned higher
reimbursements from CareFirst in 2012, based on a combination of
cost savings (which averaged 4.7 percent) and quality measures.
Measuring quality - which also includes having extended office
hours and using electronic medical records - keeps doctors from
trying to save money by skimping on needed care.
"This is a measurable and meaningful step in the right
direction of slowing the rise of healthcare costs," said
At primary-care practices that did not earn an incentive
award, costs averaged 3.6 percent higher than expected. Their
quality scores were also worse, suggesting that wasteful care
often goes hand in hand with poor care.
CareFirst's savings are in line with those reported by 10
physician groups across the United States that treated Medicare
patients under an accountable care model. Annual savings
averaged $114 per patient, researchers led by Fisher reported in
the Journal of the American Medical Association last year. But
savings reached $532, or 5 percent, for patients eligible for
both Medicare and Medicaid.
CareFirst received a grant from the federal Centers for
Medicare and Medicaid Services to expand the medical home model
to Medicare patients starting July 1. These older Americans
"frequently have complex health needs and multiple chronic
health conditions," said Burrell, and so "could benefit greatly
from the coordinated model of care" in medical homes.