The CareFirst Patient-Centered Medical Home Program: Cost and Utilization Effects in Its First Three Years

Journal of General Internal Medicine, Jul 2016

Background Enhanced primary care models have diffused slowly and shown uneven results. Because their structural features are costly and challenging for small practices to implement, they offer modest rewards for improved performance, and improvement takes time. Objective To test whether a patient-centered medical home (PCMH) model that significantly rewarded cost savings and accommodated small primary care practices was associated with lower spending, fewer hospital admissions, and fewer emergency room visits. Design We compared medical care expenditures and utilization among adults who participated in the PCMH program to adults who did not participate. We computed difference-in-difference estimates using two-part multivariate generalized linear models for expenditures and negative binomial models for utilization. Control variables included patient demographics, county, chronic condition indicators, and illness severity. Participants A total of 1,433,297 adults aged 18–64 years, residing in Maryland, Virginia, and the District of Columbia, and insured by CareFirst for at least 3 consecutive months between 2010 and 2013. Intervention CareFirst implemented enhanced fee-for-service payments to the practices, offered a large retrospective bonus if annual cost and quality targets were exceeded, and provided information and care coordination support. Measures Outcomes were quarterly claims expenditures per member for all covered services, inpatient care, emergency care, and prescription drugs, and quarterly inpatient admissions and emergency room visits. Results By the third intervention year, annual adjusted total claims payments were $109 per participating member (95 % CI: −$192, −$27), or 2.8 % lower than before the program and compared to those who did not participate. Forty-two percent of the overall decline in spending was explained by lower inpatient care, emergency care, and prescription drug spending. Much of the reduction in inpatient and emergency spending was explained by lower utilization of services. Conclusions A PCMH model that does not require practices to make infrastructure investments and that rewards cost savings can reduce spending and utilization.

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The CareFirst Patient-Centered Medical Home Program: Cost and Utilization Effects in Its First Three Years

KEY WORDS: patient-centered care; primary care redesign; program evaluation. J Gen Intern Med The CareFirst Patient-Centered Medical Home Program: Cost and Utilization Effects in Its First Three Years Alison Cuellar 2 Lorens A. Helmchen 1 Gilbert Gimm 1 Jay Want 0 Sriteja Burla Bradley J. Kells Iwona Kicinger 3 Len M. Nichols 3 0 Center for Improving Value in Health Care , Denver, CO , USA 1 Department of Health Policy and Management, George Washington University , Washington, DC , USA 2 Department of Health Administration and Policy, George Mason University , Fairfax, VA , USA 3 Center for Health Policy Research and Ethics, George Mason University , Fairfax, VA , USA BACKGROUND: Enhanced primary care models have diffused slowly and shown uneven results. Because their structural features are costly and challenging for small practices to implement, they offer modest rewards for improved performance, and improvement takes time. OBJECTIVE: To test whether a patient-centered medical home (PCMH) model that significantly rewarded cost savings and accommodated small primary care practices was associated with lower spending, fewer hospital admissions, and fewer emergency room visits. DESIGN: We compared medical care expenditures and utilization among adults who participated in the PCMH program to adults who did not participate. We computed difference-in-difference estimates using two-part multivariate generalized linear models for expenditures and negative binomial models for utilization. Control variables included patient demographics, county, chronic condition indicators, and illness severity. PARTICIPANTS: A total of 1,433,297 adults aged 18-64 years, residing in Maryland, Virginia, and the District of Columbia, and insured by CareFirst for at least 3 consecutive months between 2010 and 2013. INTERVENTION: CareFirst implemented enhanced feefor-service payments to the practices, offered a large retrospective bonus if annual cost and quality targets were exceeded, and provided information and care coordination support. MEASURES: Outcomes were quarterly claims expenditures per member for all covered services, inpatient care, emergency care, and prescription drugs, and quarterly inpatient admissions and emergency room visits. RESULTS: By the third intervention year, annual adjusted total claims payments were $109 per participating member (95 % CI: −$192, −$27), or 2.8 % lower than before the program and compared to those who did not participate. Forty-two percent of the overall decline in spending was explained by lower inpatient care, emergency care, and prescription drug spending. Much of the reduction in inpatient and emergency spending was explained by lower utilization of services. CONCLUSIONS: A PCMH model that does not require - practices to make infrastructure investments and that rewards cost savings can reduce spending and utilization. INTRODUCTION Numerous models have been proposed for enhancing primary care and improving care coordination, while pursuing the triple aim of greater access, lower costs, and improved quality. These models range from patient-centered medical homes (PCMH) to accountable care organizations (ACOs).1 Many small physician practices, which provide most of the primary care services delivered in the United States, struggle to meet the requirements of even a standard PCMH model, citing large investments in infrastructure such as electronic medical records, retraining, workflow redesign, ongoing certification, and additional care coordination personnel, which can cost up to $100,000 per physician by some estimates.2–4 Some observers have argued that policy initiatives aimed at promoting these models could unintentionally lead to greater consolidation of physician practices and spell the end of small-scale practices.5 Most PCMH programs to date have relied on per-member per-month (PMPM) case management fees to finance the additional resources needed.6–9 While such models are suited to both large and small practices, they may not be sufficient to cover the increased practice costs necessary to perform PCMH functions or explicitly reward performance. In at least one PCMH program, practices were given access to additional staffing from a community health team, potentially benefitting smaller practices.10 Other PCMH programs have required third-party PCMH accreditation or have paid practices up front to meet certification criteria as a PCMH.11–13 Practices that do not receive financial support to become PMCH-certified are otherwise disadvantaged. The Comprehensive Primary Care initiative (CPCI) required substantial PMPM payments from multiple payers, and offered shared savings based on quality and cost performance, but was not limited to practices with PCMH recognition.14 The initiative required changes in care delivery to enhance access, care planning, chronic care management, care coordination, and patient engagement. Despite some initial promising results, in the second year prac (...truncated)


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Alison Cuellar, Lorens A. Helmchen, Gilbert Gimm, Jay Want, Sriteja Burla, Bradley J. Kells, Iwona Kicinger, Len M. Nichols. The CareFirst Patient-Centered Medical Home Program: Cost and Utilization Effects in Its First Three Years, Journal of General Internal Medicine, 2016, pp. 1382-1388, Volume 31, Issue 11, DOI: 10.1007/s11606-016-3814-z