Pacific Business Group on Health, L.A. Care initiative saves $345M in California 

A group of California payers and providers teamed up to revamp primary care and found a way to save $6 for every $1 invested in the project.

In the state’s largest physician quality improvement effort ever, the Pacific Business Group on Health (PBGH), L.A. Care Health Plan and the Southwest Pediatric Practice Transformation Network invested a $52 million grant from the Centers for Medicare & Medicaid Services into launching the program. The project included 9,800 physicians serving 5.9 million patients. 

The three organizations served as practice transformation networks, facilitating a peer-based learning initiative and offering technical support to the involved physicians and practices. 

Over the course of four years, the project saved $345 million in healthcare costs and prevented 67,000 unneeded emergency room visits and 57,000 unneeded hospital admissions. About 750,000 patients saw clinical outcomes improve—through more effective diabetes management, for example—or were enrolled in new processes such as new, evidence-based approaches. 

In all, the project saved $6 for every $1 invested, the four-year review found. 

RELATED: Spending more on primary care translates to better outcomes, report says 

Elizabeth Mitchell, CEO of PBGH, told FierceHealthcare that the results have one clear take-away: It’s crucial that the health system continues to emphasize and invest in primary care. 

Small practices, she said, can make a significant difference in the communities they serve if they’re given the tools to truly meet patient needs. 

“Primary care is the foundation for a high-value system, and until we really give them the resources, they won’t be able to manage individual population health adequately,” Mitchell said. 

John Baackes, CEO of L.A. Care, echoed Mitchell, telling FierceHealthcare that primary care docs that participate in the public health system’s coverage network are crucial to their efforts to manage cost. 

L.A. Care members are assigned a primary care physician (PCP) when they enroll in the plan, and having that set PCP is key for continuity of care when looking to manage costly chronic conditions. 

RELATED: Shift to value-based payment will require new staffing mix for primary care, analysis finds 

However, PCPs are overworked and burdened with large amounts of administrative work, so insurers, employer groups and other stakeholders can support them more effectively through investments like California’s program, Baackes said. 

“The pressure the primary care physicians are under today is tremendous,” he said. 

Baackes said that L.A. Care is able to draw providers into programs like this because it has a strong relationship with community clinics that can act as a bridge to other physicians. 

But April Watson, director of the transformation initiative at PBGH, warned that because of the stress primary care physicians face, enticing them into value-based deals may require some hard work, too. 

“Changing the structural payment arrangement absolutely has to happen in order for them to practice the way that we’re talking about moving forward,” Watson told FierceHealthcare.