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Study: Blue Cross avoided $155 million in costs in medical home project

David Share, M.D., senior vice president of value partnerships with Blue Cross and Blue Shield of Michigan, has been shepherding the Blues' patient-centered medical home project during the five years of its existence.

With more than 3,017 physicians and 994 groups participating in Michigan, Share has slowly seen physicians move from skepticism, to acceptance and advocacy, to patient care improvements, and now to real cost savings.

"We always had some data that medical homes are working, but now we have strong evidence" of cost and quality savings, Share said.

During the first three years of the program, Blue Cross has documented $155 million in savings by avoiding hospital admissions and readmissions, emergency department visits, and through increased generic drug use and less reliance on expensive radiologic studies, according to a study in the July 5 Health Services Research Journal.

Share said preliminary data shows that the medical home project saved $155 million in 2012 alone, increasing the savings to $310 million. Some 2 million patients are participating through their primary care physicians, Blue Cross said.

Each year, said Share, as physicians added preventive and evaluative services and became more sophisticated in monitoring and engaging patients, savings have increased.

For example, savings totaled $14.9 million from July 2008-July 2009, $47.3 million in July 2009-July 2010 and $92.9 million from July 2010-July 2011, the study found. For adults, the savings amounted to $26.37 lower per member per month of medical costs.

Using University of Michigan researchers, the Blue Cross study is the first major study on the financial savings on the use of patient-center medical homes by primary care physicians. Blue Cross sponsors the nation's largest patient home project.

"The problem with the past studies, which have been much smaller in scale, is they aren't as robust as ours," Share said. "We have spent quite a few years in helping these practices implement these homes. It takes time to see the effects."

Share said physicians might put a medical home component in place–a disease registry or evening hour appointments – and the results might not appear until the second year.

"Our study has shown steady improvement from year to year. Physicians, nurses and staff need time to ingrain them into the practices," he said.

Medical homes are working

In comparing medical home-designated doctors with non-designated doctors within Blue Cross' Physician Group Incentive Program, medical home doctors in 2012-2013 have:



  • A 19.1 percent lower rate of adult hospital discharges for certain "ambulatory care sensitive" conditions that include gastroenteritis, angina, pneumonia, asthma, congestive heart failure, hypertension and diabetes.

    Medical home physicians help patients avoid admissions by evening hour appointments, weekend and same-day appointments.


  • An 8.8 percent lower rate of adult emergency department visits.


  • A 7.3 percent lower rate of adult high-tech radiology usage than other non-designated primary care physicians.


  • For children under age 17, a 17.7 percent lower rate of ER visits.


Patient-centered medical homes

To become a Blue Cross-certified medical home provider, physicians must agree to adopt a variety services that include a chronic care patient disease registry, evening or weekend hours and electronic prescribing.

Blue Cross isn't the only health insurer in Michigan that sponsors a medical home program, which is through its Physician Group Incentive Program. Other insurers with programs include Health Alliance Plan of Michigan and Priority Health in Farmington Hills.

Blue Cross financially rewards participating practices. For example, Blue Cross paid out $73 million in higher fees to medical home-designated practices over the three-year study period. These fees are built into the annual fee schedule, so there are no extra costs to the Blues.

Little impact for pediatric patients on costs, but quality improves

While medical homes reduced costs dramatically for adult patients, Share said there was no change in costs for pediatric patients.

"There are some sick children, but there are far fewer kids with chronic disease," he said. "Managing them helps kids but doesn't save a ton of money."

Share said medical home providers educate children about healthy eating, weight and dispense more immunizations than non-medical home doctors.

Overall, however, medical homes increased preventive quality scores for children by 12.2 percent.

Quality improvements

Aside from financial gains, Blue Cross continued to document higher quality scores within the practices but also compared with non-medical home physician groups.

Overall, for adults, composite quality scores – that include many HEDIS measurements – increased by 3.5 percent. Specific HEDIS measures for prevention, immunization, breast cancer and colorectal screening increased at a faster 5.1 percent rate.

HEDIS, which is the Healthcare Effectiveness Data and Information Set, also include asthma medical use, use of beta blocker after heart attack, controlling blood presume, comprehensive diabetes care, breast cancer screening and weight assessment.

"We have a subset of diabetes measures. There is solid evidence that working closely with diabetic patients leads to better outcomes," he said. "The take-home message is if you help your diabetic patients control their sugar levels you will have less kidney failure, heart attacks and patients will have more fulfilling lives."

"Study: Blue Cross avoided $155 million in costs in medical home project" originally appeared in Crain's Detroit Business.

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