Summit Focuses on Lower Health Care Costs, Success of New Models

According to presenters at a June 6 policy summit( on health care innovation here, the lower health care costs the United States is experiencing may be due, in part, to the growing use of innovative payment and delivery models of health care. This is backed up by results from at least one pilot program testing the patient-centered medical home (PCMH) model of care that has seen a large decrease in costs.

Bruce Bagley, M.D., right, TransforMED interim president and CEO, talks about the patient-centered medical home with Chet Burrell, president and CEO of CareFirst BlueCross BlueShield, and Marci Nielsen, M.P.H., Ph.D., CEO of the Patient-Centered Primary Care Collaborative after participating in a policy summit on health care innovation.

During the summit, CareFirst Blue Cross Blue Shield, a sponsor of the summit, which was held by theNational Journal Live, announced that its medical home program in Maryland, Northern Virginia and Washington, D.C., had achieved dramatic cost savings and improvements in the quality of care for the second straight year. In 2012, the PCMH project, the largest of its kind in the nation, saved $98 million, according to CareFirst.

In addition, two reports issued by the Congressional Budget Office earlier this year projected billions in federal budgetary deficit savings as a result of lower health care costs. "CBO has issued two reports in which the data points around health care costs are dramatically changing," said Neera Tanden, J.D., president of the Center for American Progress and a former senior adviser for health reform at HHS, who delivered the summit's keynote address.

Tanden attributed at least part of the slowdown in health care costs to the growing use of PCMHs, accountable care organizations and bundled payments. "These innovations are driving the changes," she said.


The move to team-based, coordinated care has created a greater need for the patient-centered medical home and other innovative payment models that rely on a foundation of primary care, according to a recent policy summit held in Washington. The forum highlighted the accomplishments of the CareFirst medical home program, which achieved cost savings and improvements in the quality of care for the second straight year. Bruce Bagley, M.D., interim president and CEO for TransforMED, said the prevailing fee-for-service payment system discourages innovation and change in the health care arena.

The Health Care Environment

Tanden's keynote address was followed by an expert panel that included Bruce Bagley, M.D., TransforMED interim president and CEO; Chet Burrell, president and CEO of CareFirst; Marci Nielsen, M.P.H., Ph.D., CEO of the Patient-Centered Primary Care Collaborative; and Kavita Patel, M.D., fellow and managing director of delivery system reform and clinical transformation at the Center for Health Care Reform at The Brookings Institution.

Bagley told the audience of about 200 policymakers and other stakeholders that the health care environment has changed, becoming much more oriented toward primary care. "I have never seen this much attention to primary care in the policy arena and the political arena," he said.

There is a general acknowledgement that health care spending and costs are not sustainable, creating a need for innovative payment and delivery models to slow health care costs and improve quality. The prevailing fee-for-service payment system has discouraged innovation and change in the health care arena because the model is based almost entirely on office visits as the central commodity, Bagley said. "Until we get unshackled from that, it is very hard to do things that are not visit-based."

When Bagley asked how many people in the audience could e-mail their physicians for a consultation, only two hands went up. "That is sparse," Bagley said. "That is sad."

He called for a blended payment model to compensate physicians for care coordination and other services that fall outside face-to-face visits. One of the goals of the AAFP and TransforMED, said Bagley, is to create an environment where physicians can deliver continuing, comprehensive and personal care in more consistent and reliable ways using tools, such as registries, for patients with chronic diseases.

In recent years, said Bagley, it has become increasingly clear that practices need an infrastructure to implement and sustain the PCMH model. "It is not only about paying doctors more," he said. "It is about creating an environment in which the work of primary care can be done in an effective and efficient way."

The CareFirst Pilot

That environment is demonstrated in the CareFirst PCMH pilot project, which relies on a network of primary care practices, known as medical care panels, to deliver and manage care through a team-based approach. The program comprises 420 physician panels, and each panel is responsible for taking care of about 3,000 CareFirst members. The panels are accountable for aggregate patient costs and quality across all settings.

"Every single thing that is done for those patients in any setting, by any provider, is the responsibility of that panel," said Burrell. "We debit every single item and service against that panel."

The message to the physician practices is unmistakable: "Don't let your patients break down, don't let your patients get excess services, and don't ignore things that need to be tended to," Burrell said. "The job is to take care of the (patients) better, and for that we need a team, not just the physician."

CareFirst provides each panel with an overall budget for the coming year and then challenges the panel to beat that budget, allowing it to share in the savings if it comes in below the target. The panels are able to beat the budgets by reducing hospital readmission rates, emergency room visits and complications from drug interactions, effectively taking better care of their patients, said Burrell.

CareFirst has 2.5 million members in Maryland, Virginia and Washington, D.C. More than 1 million are included in the pilot. The inpatient medical costs for members within the PCMH pilot were 15 percent lower in 2012 than for those who were not in the pilot. PCMH patients also had drug costs that were 4 percent lower, and their cost per admission was 8.3 percent lower than the non-PCMH patients.

Burrell said elements of the CareFirst model can be replicated in other parts of the country. He pointed out, however, that health care intrinsically is local. "There are meaningful differences in the way it is provided in difficult localities," said Burrell. "You should build on that and not try to ignore that and make everything one common model. There is no one right way."

According to Bagley, the ultimate goal is to achieve the triple aim of health care: better care for the individual, better population health and lower costs on a per capita basis. "That should be common everywhere," Bagley said. "That is the goal of our system."

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