CareFirst patient-centered medical home saved $40M

CareFirst Blue Cross Blue ­Shield has instituted one of the largest patient-centered medical homes (PCMH) in the country and has reaped big savings--$40 million--in the program's first year.

The Washington, D.C., area's largest insurer achieved those savings by reducing unnecessary hospital admissions and ER visits by patients with diabetes, heart conditions and other chronic illnesses. "The cycle of breakdown, admission, readmission and ER visit was lessened," CareFirst CEO Chet Burrell told reporters during a conference call last week.

The $40 million savings amounts to 1.5 percent off of expected costs for the PCMH last year. CareFirst expects to see even greater savings in years to come as doctors adjust to the program, Kaiser Health News reported. "It would not be unreasonable to expect a bending of the cost curve of 3 to 5 percent within a given year," Burrell said. "If we get a cumulative effect from this over time, from society's standpoint, it does start to control the rise of healthcare costs."

Recognizing that small, one-to-three-physician practices prevail in the local market, CareFirst incentivizes those small primary care practices into forming virtual panels of 10 to 15 doctors to operate as a PCMH. In its first year of operation, CareFirst's PCMH program includes about 3,600 primary care physicians and nurse practitioners, or about 80 percent of practicing doctors and nurses in its region. Those doctors receive a 12 percent pay increase upon joining the PCMH program and $200 for each patient care plan they create. What's more, if the doctors meet certain efficiency and quality goals, they get additional bonuses of about 20 percent, or about $12,000 on average, reported The Washington Post.

About 150 of 250 eligible panels, consisting of five to 15 participating doctors, received incentives. Those doctors reduced their patients' overall health costs by 4.2 percent, according to Hospitals & Health Networks Daily.

"The whole idea here is incentives affect behavior," Burrell said. "And there's no more important behavior to affect than the way primary care physicians pay attention to people with chronic disease."

To learn more:
- read the Kaiser Health News article
- see the Washington Post article
- check out the Hospitals & Health Networks Daily article
- see CareFirst's statement

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