Improving healthcare quality and efficiency can save money, according to the first-year results of a congressionally mandated three-year CMS demonstration project involving 10 large physician group practices using 10 diabetes-care quality measures drawn from the CMS Doctor's Office Quality, or DOQ, project. Although in the first year of the project, only two practices generated significant savings; Acting Deputy CMS Administrator Herb Kuhn attributed some of this to project startup costs.
James Lee, an internist and quality management expert at one of the participating practices, Seattles Everett Clinic, said that the overall impact of the program was much greater than just the improvements measured by Medicare. And, in an American Medical Group Association-sponsored news conference, representatives of the participating groups attributed many of the benefits realized during the demonstration project to information technology applicationsparticularly to the creation of diabetic patient registries.
Participants credited the use of these registries with helping to reduce hospitalizations and emergency department visits. Barbara Walters, senior medical director at Dartmouth-Hitchcock Clinic, Bedford, N.H., said the demonstration project has created an "innovation think tank."
The pay-for-performance demonstration project calls for the CMS to provide financial rewards to practices that show savings of greater than 2% from projected costs developed from the baseline yearApril 1, 2003, to March 31, 2004and when compared with the costs generated by a local control group. Two practicesMarshfield (Wis.) Clinic and the University of Michigan Faculty Group Practice, Ann Arborearned $7.3 million in payments for performance and efficiency out of $9.5 million in Medicare savings they generated.
Kuhn explained that savings are divided 80-20 with eligible practices receiving 80% of the money they saved Medicare and 20% of the savings going back to the Medicare program.
In the first year of the projectApril 1, 2005, to March 31, 2006all 10 participating practices hit seven of 10 targeted benchmarks for clinical measures for diabetes treatment. Two practices met all 10 benchmarks.
Results are not yet in for the recently completed second year of the demonstration, which added measures for congestive heart failure and coronary artery disease. For the third year, measures on hypertension plus colon and breast cancer screening have been added.