U-M Improves Preventive, Chronic Care, Saves Medicare More Than $15 Million

Better treatment and care that costs less results in savings for Medicare, demonstrates benefits of Accountable Care Organizations

ANN ARBOR, Mich., Dec. 10, 2010 /PRNewswire-USNewswire/ --  Medicare patients with a host of physical problems are getting better care at the University of Michigan Health System, and U-M staff have saved more than $15 million on the cost of that care over four years.

U-M's savings come from four years of participation in Medicare Physician Group Practice (PGP) Demonstration Project. It is Medicare's first Pay-for-Performance Demonstration Project to work directly with physician groups like the U-M Faculty Group Practice. The practices in the PGP Demonstration are also recognized as prototypes for Accountable Care Organizations.  

The project demonstrates the benefits of Accountable Care Organizations, an initiative now written into the nation's health care reform law. U-M's results show ACOs can work.

Numbers for the fourth year were released today. In the fourth year, U-M saved more than $6.6 million by reducing costs to Medicare through quality improvement strategies and redesigning care.

"Those of us who've participated in this project are the only proven ACOs," says Caroline Blaum, M.D., professor of internal medicine and geriatrics, associate chief of geriatric medicine and a research scientist at the VA Ann Arbor Healthcare System. "By virtue of our success, U-M already has set up an ACO."

"We have demonstrated there are plenty of opportunities to squeeze costs out of the system while also improving quality of care," says Blaum, who is U-M's project leader. "For example, focusing on how patients transition between care settings and proactively reaching out to ensure they understand the information provided and the next steps can make a substantial impact."

The results were announced today in Washington, D.C., by the Centers for Medicare and Medicaid Services. CMS oversees the Medicare system and launched this demonstration project to promote investment in care management programs and redesigned care processes that might be used by doctors and hospitals nationwide.

U-M achieved both of the project's aims: to provide the highest-quality care and reduce health care spending growth for all traditional Medicare patients, including those with costly chronic illnesses.

Of the 10 large physician groups participating in the project, U-M and the Marshfield Clinic in Wisconsin were the only two to save money each year of the project.

U-M's performance was better than the CMS targets for 30 of the 32 quality measures tracked in the fourth year of the project. The quality measures focused on diabetes, congestive heart failure, coronary artery disease, hypertension, and breast and colorectal cancer screenings.

This is the fourth year in a row that U-M has achieved both sizable savings and high scores on health care quality benchmarks as part of the project. One more year of data remains to be collected and analyzed. 

The U-M Faculty Group Practice, part of the U-M Medical School, includes all of the nearly 1,600 U-M faculty physicians who care for patients at the three U-M hospitals and 40 U-M health centers.

"The U-M Faculty Group Practice invested significant time and resources in this project because it provided the opportunity to develop and test potential interventions that could improve clinical outcomes and reduce costs for patients with chronic disease," says David Spahlinger, M.D.,  senior associate dean for clinical affairs.

"Our investments have enabled better coordination of care and demonstrated to the nation that ACOs are worth pursuing."

Many of the programs and innovations that U-M has put in place for this project involve not only physicians but also pharmacists, nurses, social workers, care managers and others who are involved in the care of Medicare patients at all U-M facilities.

The report is based on data from more than 18,000 Medicare participants who received most of their care at U-M during the 12-month period that began April 1, 2008.

The project does not include those who were enrolled in a Medicare Advantage plan offered by a private health plan, nor Medicare participants who received only limited care at U-M. But the improvements made for the project are helping other patients as well.

The project began by focusing on the quality of care of patients with diabetes, but was expanded in its second year to include congestive heart failure and coronary artery disease – both chronic heart conditions that carry a very high risk of emergency hospitalization and other higher-cost care if not managed appropriately. In the third year, the program was further expanded to include hypertension – another high-risk and costly condition – and breast and colorectal cancer screenings.

During the years it has participated in the project, U-M has launched a number of new programs to help improve care for all patients seen at U-M. U-M has implemented transitional care programs designed to assist patients with hospital discharge information and follow-up activity. Also started were complex care coordination programs designed to reduce unnecessary treatments, readmissions, handoffs and wait times, as well as a medical home program where a patient and his/her personal physician partner to identify, provide, and coordinate all needed services across multiple locations and settings.

U-M's Faculty Group Practice is the only organization in Michigan taking part in the project. It was chosen for several reasons, including demonstrated success in chronic care management, diabetes quality and organizational structure.

For more information on the project, visit www.cms.hhs.gov/DemoProjectsEvalRpts. Click on "Medicare Demonstrations" and then search for "Medicare Physician Group Practice Demonstration."

The other physician groups participating in the project are Billings Clinic, Billings, MT; Dartmouth-Hitchcock Clinic, Bedford, NH; The Everett Clinic, Everett, WA; Forsyth Medical Group, Winston-Salem, NC; Geisinger Clinic, Danville, PA; Marshfield Clinic, Marshfield, WI; Middlesex Health System, Middletown, CT; Park Nicollet Health Services, St. Louis Park, MN; and St. John's Health System, Springfield, MO.

SOURCE University of Michigan Health System