New Primary Care Model Could Cut Costs 20 Percent
Oregon Health Leadership Task Force targets high-risk patients with complex chronic care needs
The two-year pilot project, which gets under way this fall, is aimed at people who suffer from congestive heart failure, end-stage renal disease, asthma, cancer and other complex chronic conditions.
All the major insurers, with the exception of Kaiser Permanente, are being asked to participate and include CareOregon and Samaritan Health Services, which have Medicaid and Medicare patients.
“We need the health plans to collaborate because one insurer doesn’t have enough volume to drive change,” said Denise Honzel, a consultant who’s coordinating the pilot project on behalf of the Oregon Health Leadership Task Force. “We have a pretty aggressive timeline.”
Thus far, Providence Health Plan has come on board, said its CEO, Jack Friedman. “We believe in it, and are willing to try it.”
Here’s how it will work. Insurers will identify the top 10 percent of their high-risk patients who’ll be encouraged to enroll in 8-12 primary care medical groups throughout the state. The project targets people working for self-funded employers.
“If we can bring 1,000 patients to a medical group, this will be viewed as really evolutionary,” Honzel said.
Nurse case managers will coordinate patient care, keeping a close eye on their health status by e-mail, telephone and patient feedback.
By avoiding emergency room visits and unnecessary hospitalizations, Boeing was able to reduce costs by 20 percent, according to Drs. Arnold Milstein and Pranav Kothari, who published their findings in Health Affairs recently. “Judicious intensification of primary care for the severely chronically ill can both improve health and lower total per capita health care spending,” they wrote.
The leadership task force has hired Kothari, co-founder of Renaissance Health in Boston, to oversee the project, who’ll work with the health plans and medical directors. Dr. Bart McMullan, former president of Regence BlueCross BlueShield, chairs the endeavor on behalf of the task force.
Obviously there’s a price tag associated with starting up such an innovative project – approximately $2 million a year, for health insurers to hire additional staff and to cover their administrative expenses, Honzel said.
But there’s a reward. Insurers will see break even, even if the medical costs for this vulnerable population decrease by a mere 2-3 percent.
There’s a much higher margin if costs go down by 10-20 percent –then the return on investment to insurers could reach between 180 to 400 percent, based on national estimates.
“Now we’re trying to get everyone to work together,” Honzel said. “We think it will be well worth the investment. And, there’s a real promise to provide better quality care and reduce costs.”
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Find out about the work of the Oregon Health Leadership Task Force by clicking her.
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The study was done in Washington State, in the Seattle area. Medicare costs are already substantially higher, per person, per year in Seattle, than they are in Portland. Much of those costs are going to be concentrated in patients with severe chronic illnesses like those mentioned.
My point is that costs in Portland are already the lowest in the nation, and are inclusive of these kinds of chronic diseases that are extremely expensive. Now maybe we can do even better if we try some of these measures to intensify primary care. Maybe not. Perhaps we have truly wrung out all of the waste already.
What really confuses me is why experts from all across the nation aren't beating a path to Oregon to see how we do it. If all states were held to "The Oregon Standard," Medicare costs would drop about 40%.
Don't hold your breath though. Miami is in no big hurry to get $7000 less, per medicare patient, per year, from the Federal Government. And that is the problem. Oregon probably doesn't need a new model for controlling health care costs in the Medicare population. However, the rest of the country surely does. So who is going to make that happen?