Blue Cross Blue Shield of Michigan saves estimated $155M over three years

Blue Cross Blue Shield of Michigan saved an estimated $155 million over the first three years of its Patient-Centered Medical Home program, based on calculations made from an analysis published this month in the Health Services Research Journal. The analysis also shows that, when physicians fully transform their practices to the Patient-Centered Medical Home model, it results in higher quality and improved preventive care.

The Michigan Blues have operated the nation’s largest Patient-Centered Medical Home designation program for the last five years. Through patient-centered medical homes, primary care physicians lead teams that proactively manage their patients’ care across health care settings – focusing on wellness, disease management and patients’ unique personal health goals. PCMH teams coordinate patients’ health care, track their conditions and ensure that they receive the care they need.

“Blue Cross’ Patient-Centered Medical Home is transforming health care delivery, saving millions of dollars and improving lives,” said Daniel J. Loepp, president and CEO of Blue Cross Blue Shield of Michigan. “The partnerships established between the Blues, Michigan physicians and their practice groups have been instrumental in the success we are achieving together.”

Across the country, physicians and health care organizations have been testing medical home qualities and features to see if they lead to improvements in care and efficiency. Through its analysis, “Partial and Incremental PCMH Practice Transformation: Implications for Quality and Costs,” Blue Cross Blue Shield of Michigan and University of Michigan researchers found that its Patient-Centered Medical Home model, when fully implemented, is associated with a 3.5 percent higher quality measure, a 5.1 percent higher preventive care measure and a $26.37 lower per member per month medical cost for adults.

Based on this study, the Michigan Blues estimate that the PCMH program saved $155 million in prevented claims costs from July 2008 through June 2011. This estimate was certified through the Blues’ actuary.

These avoided costs represent the savings achieved relatively early in the program’s history and factor in costs at all practices in the program, not just those that had been designated as PCMH-based practices. Cost savings achieved by highly developed PCMH-based practices are substantially greater. In fact, the Michigan Blues estimate they may have saved an additional $155 million in the program’s fourth year.

“This program not only strengthens the doctor-patient relationship, it strengthens our overall system of care,” said David Share, M.D., MPH, BCBSM senior vice president, Value Partnerships. “Through the Patient-Centered Medical Home model, doctors and their care teams are improving patient outcomes, which translates to fewer hospital admissions and emergency room visits, which leads to lower overall cost.”

Blue Cross Blue Shield of Michigan began collaborating with physicians across Michigan in 2005 to study and test what key features and capabilities should be included in a Patient-Centered Medical Home model with physician practices earning designation starting in 2009.

Practices earning designation were found to have made the most progress in transforming their processes, staff and procedures into the PCMH care model.

For example, PCMH practices offer 24-hour access to the care team and coordinate specialist and other care, such as nutrition counseling. PCMH practices also track patient conditions, such as asthma and diabetes, teach patients how to manage these conditions and connect patients to community services when needed.

Transforming to a full Patient-Centered Medical Home model often takes many years to achieve. The analysis found that even partial, incremental implementation of PCMH functions was associated with preventive care and quality improvements, and cost savings.

“In our analysis, we found that newly implemented parts of the PCMH model were associated with better preventive care and quality of care outcomes similar to previously established parts of the PCMH model. But the cost benefits appear to be greater for parts of the PCMH model that have been in place for over a year compared to the newly implemented parts, suggesting that it may take time for these processes to fully mature.” said Michael Paustian, PhD, MS, lead author and manager, department of Clinical Epidemiology and Biostatistics, Blue Cross Blue Shield of Michigan.”This tells us that patients benefit from higher quality and improved preventive care even as physician practices are progressing toward full implementation of the PCMH model.”

The research was funded by the national Agency for Healthcare Research and Quality.

The Blues’ Patient-Centered Medical Home program improves care for approximately 1 million Blue Cross members and 2 million Michigan residents because the practices follow the PCMH approach for their entire patient populations.

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