Citing Cost Reductions, Highmark to Expand PCMH Initiative
John Commins, for HealthLeaders Media , January 24, 2013
The success of a year-long pilot program of patient centered medical homes has prompted Pittsburgh, PA-based Highmark Inc. to broadly expand the initiative in two states.
"Our goal is that in about a year from now 75% of all our doctors in our network will be part of a patient-centered medical home, and will be working effectively and efficiently amongst themselves as primary care physicians and with their specialist colleagues," Paul Kaplan, MD, senior vice president of provider strategy and integration at Highmark, told reporters at a teleconference Wednesday afternoon.
The PCMH model began in 2011 with 160 primary care physicians in 12 practices, covering about 45,000 Highmark members. Effective this month, the program will be expanded to include nearly 1,050 primary care physicians in 100 practices covering 171,000 Highmark members in Western and Central Pennsylvania and West Virginia, Highmark says.
Michael Fiaschetti, president of health markets at Highmark, told reporters that the pilot project saw a nearly 2% reduction in costs per member per month while traditional care delivery programs within Highmark saw cost increases. The demonstrated savings, he says, will serve as a catalyst to greatly expand the PCMH model in the coming years.
"Our goal a Highmark over the next three-to-five years is to transform the way we interact with physicians, hospitals and all healthcare providers," Fiaschetti told reporters. "We want to move from a pure or straight fee-for-service environment where we pay for volume and move to a pay-for-value environment. This is a foundation to that movement - the patient-center medical home is foundational to accountable care organizations or any other type of pay for value program that we do."
"Our goal would be that in the future, physicians who drive value—meaning higher quality indicators and an overall more reasonable trend or cost—will get more money than they do today in a fee-for-service system. But they will be paid based on that value and not on just driving more units of service. That is what we want to get to."
Highmark said the results from the pilot program showed that:
· Inpatient acute admissions dropped on average for the pilot practices by 9%
· 30-day readmission rate dropped on average for the pilot practices by 13%
· Seven-day readmission rate dropped on average for the pilot practices by 14%
· There was a 5% decrease in total per-member-per-month costs for coronary artery disease members and a 3.5% decrease for diabetics during the pilot
Fiaschetti says the key to success with the PCMH is to get physicians to embrace the team approach, and for the payers to reward success.
"In their offices they would have care coordinators who would spend more time with the chronically ill patients and get them the right level of care, get them the right education, and coordinate their care in a more intense fashion," he says.
"In exchange, we are going to provide higher incentives for better managing those patients based on certain quality and cost parameters. Quality will always be 50% of the incentive equation. We aren't going to compromise quality for cost. This isn't the old days where that may have happened 20–25 years ago in some of the old HMOs. It is very much a blend of cost and quality."
Fiaschetti said the quality indicators would be designed around nationally recognized benchmarks, particularly as they related to chronic illnesses such diabetes and congestive heart failure.
"The overall cost will be around the total per capita cost per member and the incentives will be different," he says. "Physicians can earn more money for better care and overall there will be a huge return because we will eliminate emergency visits, unnecessary admissions and readmissions, all those things that raise costs and frankly aren't good for the patients."
"We hope the outcomes are better health for the patients at a lower cost for the patient and the system," he says. "We believe that there is a huge return on this and what it is going to take is a different approach, a much tighter alignment than we've had in the past. We will be exchanging much more data about services that have been provided to these members, data about clinical information around these members."
Adam Powell, a healthcare economist and president of Payer+Provider Syndicate, a Boston-based consulting firm, says Highmark's recent findings from its PCMH pilot are consistent with the positive results seen at Blue-sponsored PCMH initiatives in South Carolina and North Dakota.
"While the additional care coordination resulting from the expansion of the PCMH initiative will likely improve the quality of care, it is important to maintain a bit of caution about the potential cost savings," Powell wrote in an email exchange with HealthLeaders Media.
"Similar savings will only likely be seen in the recently added practices if the practices in the pilot were representative of typical practices contracting with Highmark. Furthermore, the benefits of PCMH are still a bit murky. A July 2012 report by [the Agency for Healthcare Research and Quality] found insufficient evidence to precisely determine the clinical and economic benefits of the PCMH model."
"Quantifying the benefits of PCMH has been hampered by variation in the way that it is implemented. Given that Highmark has approximately 5 million members, expanding access to PCMH to include less than 5% of total membership represents a conservative approach. The lessons learned from this modest expansion will help Highmark be successful in its quest to cover 75% of its members with pay-for-value arrangements by 2015," Powell wrote.
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