Logos Purchasing High Performance
As CareFirst Tweaks the Medical Home, Doctors Flock and Costs Dip

By Brian Schilling

Throughout Maryland, the District of Columbia, and portions of northern Virginia are perhaps a thousand small medical practices—some tucked into office buildings, others in converted houses, a few in standalone red brick buildings—that somehow find themselves on the cutting edge of health care delivery system reform. These are mainly solo or two-physician practices. They're generalists, not specialists. Many don't have electronic health record (EHR) systems. And yet these small, sometimes rural practices all participate in what some see as a tech-centric model for delivering better-coordinated health care to the sickest patients—a medical home

"They're our target market for the program," explains Chet Burrell, CEO of CareFirst BlueCross BlueShield, which launched one of the nation's largest medical home programs in the mid-Atlantic region in January 2011. "When we designed this program we made a real effort to make sure it would appeal to solo and two-to-three–physician practices because they represent a substantial part of our network. We knew that asking those small practices to make a huge information technology (IT) investment was a nonstarter."

The huge IT investment Burrell refers to is the investment—typically in an EHR and other software and hardware—traditionally required of practices that opt to participate in one of the dozens of medical home initiatives that have sprung up around the country over the past five years. Practices need EHRs to manage the health of populations (vs. that of individual patients), measure performance, and share clinical information across a team of providers—all cornerstones of the medical home concept. That IT investment, however, may run into the tens or even hundreds of thousands of dollars. This may not be a problem for large, profitable practices, but is a brick wall of an obstacle to the small, one- and two-doctor offices that account for about one-third of all U.S. physicians.

"We've taken it upon ourselves to provide participating physicians with access to all necessary information technology to participate in our patient-centered medical home (PCMH) program," said Burrell, "If they have high-speed internet access, they can participate."

The vast majority of CareFirst physicians do participate. To date, some 85 percent of all primary care providers (i.e., more than 3,600 primary care physicians and nurse practitioners) in CareFirst's network in and around Washington, D.C., have signed on. Those providers care for almost 1 million CareFirst enrollees.

CareFirst's Patient-Centered Medical Home Program

As with any medical home, the central idea behind CareFirst's initiative is for patients—particularly very sick patients with multiple conditions—to get the kind of patient-centered, well-coordinated care they need to speed recovery and better manage their health issues. Providing a medical home for patients is a hands-on, labor-intensive effort. Doctors are expected to talk to each other, compare notes, and share test results. If a patient doesn't show for an important visit, a staff member finds out why and makes an effort to follow up. The responsibility for that coordination and hand-holding falls on a patient's personal physician and often involves a substantial amount of effort of the sort that is not typically compensated under traditional insurance arrangements.

But CareFirst's medical home does compensate that effort, and handsomely. In addition to an across-the-board, 12 percentage point increase in compensation for primary care services, the insurer also pays doctors $200 per patient to develop care plans for high-risk patients and $100 more every time a care plan needs to be updated. Those care plans carefully document a patient's health issues and outline all the tests, therapies, medications, and other care he or she needs, making them a useful resource for other members of the care team. Care plans also specify which team member is responsible for each aspect of a patient's care.

To support physicians in their efforts to better coordinate care, CareFirst developed a user-friendly online care plan tool and other data and online care management capabilities that are freely accessible to participating doctors. Some doctors have complained that loading patient data into the online tool can be burdensome, but once it's there, the system is easy to navigate and helpful.

Paul Grundy, M.D., chairman of the Patient-Centered Primary Care Collaborative (a group that advocates for the broad adoption of the medical home model) and one of the nation's leading medical home advocates, called CareFirst's online PCMH tools a "game changer that will make the medical home applicable to the broader medical community instead of just to the tech-enabled subsection."

Participating doctors are grouped together into panels of five to 15 physicians. The physicians in a given group may be all from a single office, or, more commonly, grouped together from several practices. Of the more than 400 panels now participating, the average panel includes eight to nine physicians. How effectively those panels control health care costs among their patients helps determine whether or not they receive a bonus payment, but controlling costs isn't the only factor that's weighed at bonus time. Grouping the physicians into panels allows CareFirst to measure each panel's results on various aspects of quality such as:

  • prevention, screening, and control rates for various illnesses: what percentage of diabetics had their blood sugar well controlled? what percentage of patients with cardiovascular disease had their blood pressure under control?
  • structure and access: are same-day appointments available? how quickly were after-hours calls returned?
  • degree of engagement: was the physician responsive to nurses' inquiries and requests? were care plans filed in a timely manner?
  • appropriateness of use: were imaging services and antibiotics used appropriately?
  • effectiveness of population management: did the practice track illness rates and health issues across its entire patient population?

CareFirst weighs a panel's quality score and its level of cost-savings to determine whether the group earns an outcome incentive award, which is paid over a 12-month period in the form of an additional percentage point increase on primary care fees. Those scores and some utilization data are available to other participating providers, which supports some very effective self-policing among doctors and hospitals, Grundy says.

"If a doctor or a group does twice as many tests or surgeries as others in the area, then they will quickly be educated about community norms," he says. "In fairly short order, if the situation isn't addressed, they won't get any more business and no one will want them in their panel. It's a very practical and motivating new paradigm: dangerous overutilization means a lower paycheck."

The potential for CareFirst's medical home to promote self-policing among physicians has won the program other supporters, too. Among them is John Miller, executive director of the MidAtlantic Business Group on Health, an association that promotes cost effective health care purchasing for employers responsible for more than half a million lives. "Nothing in the present health care system encourages doctors to consider costs, so it's very easy to order expensive tests that may be of marginal or no value," he says. "Doctors participating in CareFirst's effort will get a clear sense of how much things cost—that in itself is valuable."

How the panels operate is largely up to them, but Burrell explains that the panels that receive bonuses tend to be better at managing the "cycle of breakdown" that sends patients with multiple chronic diseases to the emergency room. In other words, those practices are doing what they're supposed to be doing—coordinating, collaborating, and following up when treatment plans aren't followed to the letter.

A large team of nurses helps ensure that the program runs smoothly. Altogether, CareFirst has dedicated more than 100 full-time nurses, many of whom have backgrounds in caring for people with chronic illnesses, throughout the region to help coordinate care among providers, track incoming patients, identify patients who may need care plans, help ensure smooth discharge transitions, and manage referrals.

"We have nurses in every region who follow up with patients on a daily basis," said Burrell. "The key to a good financial and clinical outcome for a program like this is to make sure as few patients as possible fall through the cracks. The nurses are key to this."

So Far, So Good

During the program's first full year of operation, CareFirst recorded a net 1.5 percentage point drop in medical expenses versus projections. That translates to roughly $40 million in savings overall; roughly $22 million to $23 million will be paid back to providers in the form of additional fees.

That money is nice, say providers, but few peg their participation in the program to the expectations of a larger performance incentive, or even to the 12 percent fee schedule bump they receive by virtue of signing up for the initiative.

"For our group, the draw was that it allows us to practice medicine in a way that we want to practice medicine," said Steven Schwartz, M.D., of Potomac Physician Associates, a 20-doctor practice. The practice received a bonus Schwartz calls substantial, but is of secondary importance relative to other benefits of participating in the program. "Every doctor is familiar with the pressure to see a lot of patients every day. That churn is not why anyone becomes a doctor. This program gives us the opportunity to pause and spend more time with patients that really need and deserve our attention. It lets us make sure we're getting all the right information and finding the course of therapy that's going to work for them."

Despite the program's strong start, not all participating panels will receive bonuses. About 60 percent of panels beat cost estimates by an average of 4.2 percent in 2011. Those panels will earn bonuses of between 1 percent and 50 percent of their total billing. The average award will be about 20 percent.

In another good sign for the program, among doctors that participated in the program's first full year, nearly all will be participating again this year. Only a handful of small practices were terminated from the program for failing to file care plans or coordinate activities with regional nurse care coordinators. While small practices may have been given special consideration during the program's development, large practices have warmed to it as well. Every practice in CareFirst's network with more than a dozen physicians participates.

But Burrell says that it may still be a while before he's ready to pass judgment on the effort. "Years three to five will determine whether this is a big success or a little success. Bending the curve by 1 percent or so for one year is a great start, but if we can do that every year for a few years then we've really got something that will get everyone's attention."

At that point, says Burrell, employers will start to take note. This early in the program though, most employers are merely appreciative and interested in the effort rather than fully engaged. "Our sales staff talk about the effort and most employers appreciate the value in focusing on the sickest patients. But when we can show that we're keeping people healthier and that we can really hold down costs—that's when I think this becomes relevant for marketing purposes."

Next Steps

The early success of CareFirst's medical home has not gone unnoticed in health reform–obsessed Washington, D.C. In June, the Centers for Medicare and Medicaid Services (CMS) awarded CareFirst a $24 million grant that will allow it to expand the organization's medical home to the Medicare market and serve about 25,000 Medicare beneficiaries. The CMS grant money will largely pay for physician incentives.

CMS projects that the money will save about $29 million over the next three years in the form of reduced hospital admissions, readmissions, and emergency room visits. That's an important area in which to cut costs, as Washington has some of the highest inpatient and hospital readmission rates in the United States.

"The award from CMS is a nice vote of confidence in the program," says Burrell. "And I believe it will have an immediate impact on the health of our community."


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