Healthcare Business News

CareFirst reports major savings with medical home program

By Rachel Landen
Posted: July 10, 2014 - 12:00 pm ET

CareFirst's Patient-Centered Medical Home Program is continuing to bend the healthcare-cost curve after three years of operation and more than $267 million in savings, the insurer announced.

The program, launched in Washington, Maryland and Virginia in 2011 by CareFirst Blue Cross and Blue Shield, announced the results of its third-year savings that were better than anticipated, said CareFirst President and CEO Chet Burrell.

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The program is designed to keep high-risk and multichronic patients healthier while incentivizing their providers to do so.

In CareFirst PCMH's third year, the company reported overall savings against projected cost of care for the 1.1 million members covered by the program rose to 3.2%, or $130 million. That's up from 2.7% or $98 million in savings during the second year of the program. The overall rate of increase in medical-care spending also continued to slow, from an average of 7.5% in the five years before the program began to 3.5% in 2013.

“What was done in 2013 was very positive,” Burrell said. “The program matured. Physicians were more deeply understanding of the way it works and the incentives they have and more engaged with care plans and the things we wanted them to do… to keep people out of the hospital.”

Additional support programs for transition of care, home-based services, medication management and chronic-care coordination also helped the program advance during its junior year, Burrell said. At the end of 2013, CareFirst provided 150 nurses to support the participating primary-care providers. At the end of this year, that number will rise to 250.

More than 4,000 primary-care providers, or about 80% of CareFirst's network, which include primary-care physicians and nurse practitioners, participate in the company's PCMH. The providers are organized into what CareFirst refers to as panels, which are teams of from five to 15 physicians whose performance on cost savings and quality metrics is measured as a group.

“They have a shared economic stake,” Burrell said. “They get incentives as a panel, not as an individual doctor. So if several are not contributing, that is going to come to the attention of the rest. That peer pressure is a fundamental element of the design.”

The shared economic stake and earned incentives can mean an average of $25,000-$30,000 in additional revenue per provider, CareFirst reports.

“That's serious money, and that gets their attention,” Burrell said.

Each month, the physicians in the panels are evaluated by the nurses assigned to them, as well as the patients they serve, regarding their level of engagement. That is the most important element of the program, Burrell says, because without an engaged primary-care provider, the move toward controlling costs and improving quality is not possible.

Providers who are especially engaged—for example, create care plans for their highest risk patients and regularly follow up on their care and status—earn outcome incentive awards, which are paid to them as increased reimbursements. During 2013, about 69% of the participating provider panels earned outcome incentive awards, up from 66% of participants in 2012 and 60% in 2011. That is in addition to the 12% participation fee paid to providers who simply agree to participate in the program.

Participants also are rewarded more for sustaining high performance year over year. “If you win two years in a row, you're going to get a better award, and the only way you can do that is to take care of patients consistently over time,” Burrell said. “Don't go for quick hits.”

In 2013, CareFirst members under the care of providers participating in the PCMH program had 6.4% fewer hospital admissions and 8.1% fewer readmissions than CareFirst members not under the care of participating providers. They also experienced 11.1% fewer days in the hospital and 11.3% fewer outpatient health facility visits.

CareFirst has a natural control group for comparison, as they serve approximately 3.4 million members in the region, and at this point, just under one-third are included in the PCMH.

That's another reason why, Burrell says, there is still room for improvement, particularly in a region that has among the highest use rates and admission rates in the country.

“It's not a quick fix,” he said. “But we tell them we'll give you supports, infrastructure, data, analysts, nurses and rewards that are meaningfully large…. And lo and behold, they start to react.”

Follow Rachel Landen on Twitter: @MHrlanden

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