(Reuters)—Insurer CareFirst BlueCross BlueShield said on Thursday its cost savings on providing healthcare rose sharply last year in a program that rewards doctors for keeping patients out of the hospital.
The non-profit health insurer operates an approach to delivering care that emphasizes coordination among providers, led by a patient’s primary care physician.
The model is part of an industry trend to pay more to doctors and hospitals who show measurable improvement in patient care. President Barack Obama’s healthcare reform law has helped fuel adoption of these arrangements.
CareFirst said savings under what it calls its “patient-centered medical home” program in 2014 climbed to $345 million compared with projected spending under traditional fee-for-service care. That was up from $130 million saved the previous year. The savings are shared with physicians who meet goals such as reducing hospital admissions and readmissions.
Baltimore-based CareFirst said growth in overall medical spending slowed to a rate of 2 percent, compared with annual increases averaging 7.5% before the program began in 2011.
“To see sustained overall increases as low as we are now seeing is dramatic,” CareFirst Chief Executive Chet Burrell said.
CareFirst’s medical home program covers just under 1.1 million people, roughly a third of the company’s 3.4 million members in Maryland, Washington, D.C., and northern Virginia. More than 4,300 primary care physicians and nurses participate.
Burrell, in an interview, attributed the slow rate of medical cost growth to a sharp decline in hospitalizations.
Patients under the care of a medical home physician last year had 5.1% fewer hospital admissions and spent 10.7% fewer days in the hospital than those seeing physicians outside of the program. Readmissions were 8.5% lower.
Next year, CareFirst will test the concept with Medicare beneficiaries in a pilot program involving about 35,000 patients, Burrell said.
More than 100 medical home initiatives are under way in the United States, according to an analysis published in June in the Journal of the American Medical Association Internal Medicine. Reviews of such programs so far have found mixed results on quality of care and little evidence of cost reductions, but most looked at practices that did not include shared savings for providers, the researchers said.
The study, which also evaluated a medical home pilot in Pennsylvania that included financial incentives for physicians, found that program achieved quality improvements and reduced use of emergency and hospital care.