Primary Care Saves Money

Primary Care focused system saves money & improves health

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The WASHINGTON STATE Legislature must make primary care and the Patient Centered Medical Home (PCMH) a priority in all of its health care delivery system related decisions. A policy emphasis that encourages the delivery of the right CARE, at the right time, in the right place will save money and improve the health of people in washington state

I. Institute of Medicine Defines Primary Care

The WAFP recommends the Legislature adopt a consistent definition of primary care and integrate it throughout all policies. The Institute of Medicine defines - Primary care as the provision of integrated, accessible health care services by clinicians who are accountable for addressing a large majority of personal health care needs, developing a sustained partnership with patients, and practicing in the context of family and community. A common definition will clarify the state’s development, over time, of an improved delivery system. The following service categories are included in the IOM definition of primary care: acute care; chronic care; prevention and early detection; and care coordination and referrals.

Family physicians are the specialists that focus exclusively on providing primary care. We serve as the patient's point of entry into the health care system and are trained to provide longitudinal, coordinated care for all health care needs.

II. POSITIVE OUTCOMES FROM PCMH INTERVENTIONS

The WAFP recommends the Legislature become invested in a health care delivery system anchored by PCMH, or primary care health homes, and that investment will yield excellent returns.

Group Health Cooperative of Puget Sound

• 29% reduction in ER visits and 11% reduction in ambulatory sensitive care admissions.

• Additional investment in primary care of $16 per patient per year was associated with offsetting cost reductions; with the net result being no overall increase in total costs for pilot clinic patients (the total net cost trend was a savings of $17 per patient per year, which was not statistically significant). Unpublished data from the 24 month evaluation reportedly show a statistically significant decrease in total costs.

Community Care of North Carolina

• 40% decrease in hospitalizations for asthma and 16% lower ER visit rate; total savings to the Medicaid and SCHIP programs are calculated to be $135 million for TANF-linked populations and $400 million for the aged, blind and disabled population.

HealthPartners Medical Group BestCare PCMH Model

• 39% decrease in emergency room visits, 24% decrease in hospital admissions

• Overall costs in the PCMH clinics decreased from being 100% of the state network average in 2004 to 92% of the state average in 2008, in a state with costs already well below the national average.

Geisinger Health System ProvenHealth Navigator PCMH Model

• Statistically significant 14% reduction in total hospital admissions relative to controls, and a trend towards a 9% reduction in total medical costs at 24 months.

• Estimated $3.7 million net savings, for a return on investment of greater than 2 to 1.

III. THE NEW YORKER – Medical Report – Hot Spotters by Atul Gawande, January 24, 2011

The WAFP recommends the Legislature lower medical costs by ensuring that better care is provided.

· Camden, New Jersey – the Camden Coalition identifies the most expensive patients in the system and then directs resources and brainpower to help them. The early results - ER visits were reduced from an average of 62/month to 37/month reducing hospital bills for those patients from $1.2M/month to just over $500K/month. The net savings is probably lower than these figures but the savings are real.

· Boston, Massachusetts – Massachusetts General Hospital’s 2600 most chronically ill, high-cost patients accounting for approximately $60M in annual Medicare spending. After assigning each patient a primary care physician and care coordination professional, hospital stays and ER visits dropped more than 50%.

· Atlantic City, New Jersey – 1,200 patients. Switch from a fee for service model to a flat fee/patient/month. Health coaches engaged for the most chronically ill patients. When compared to a similar patient population, a 25% drop in costs resulted.

· Denmark – 20 years ago Denmark had more than 150 hospitals. Making changes that strengthened the quality of outpatient primary care services (including payment reforms to encourage email access, off-hours operations, and nurse managers for complex care).Today there are 71 hospitals and within five years the number is expected to drop to less than forty.

IV. HYBRID REIMBURSEMENT MODEL

The WAFP recommends the Legislature encourage development of a payment system in Washington State that pays for care that is coordinated by a personal primary care physician through a PCMH; care that research shows is of higher quality and lower cost. Today’s fee-for-service payment system rewards piecemeal work and the “volume” of services rendered rather than prevention of illness and coordination of care. The more procedures a physician performs, irrespective of the procedure’s value to the health of the patient, the more the physician is paid. The incentives are wrong; they must be reformed.

February 28, 2011

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