Quality Remains Strong as Cost Increases Slow Dramatically for Members in Patient-Centered Medical Home Program

Costs $345 million less than expected in 2014

Baltimore, MD (July 30, 2015) - In its fourth full year of operation, CareFirst BlueCross BlueShield’s (CareFirst) Patient-Centered Medical Home (PCMH) program continues to show dramatic impacts on overall medical spending and key health care quality indicators. Before the program’s inception in 2011, CareFirst experienced overall rates of increase in medical spending that averaged 7.5 percent annually. By 2014, the overall rate of increase slowed to 3.5 percent. Even more dramatically, the rate of increase for the more than 1 million CareFirst members covered by the PCMH program dropped to an unprecedented 2 percent.

CareFirst’s region-wide PCMH program is one of the nation’s most mature and established large-scale efforts that seeks to reduce costs while improving overall quality of care. Approximately 80 percent of all primary care providers in the CareFirst service area – including parts of Northern Virginia, the District of Columbia and Maryland – participate in the program.

In each PCMH program year since 2011, CareFirst has documented strong cost performance when measured against the expected cost of care for CareFirst members covered by the program. Health care costs for CareFirst members covered by PCMH in 2014 were $345 million less than projected in 2014. This performance represents continued improvement over 2013, when savings against the projected cost of care were $130 million or 3.2 percent less than expected. Since 2011, medical costs for CareFirst members covered by the program have been $609 million less than expected.

“The medical cost trends we are seeing are remarkable and energizing,” said CareFirst President and CEO Chet Burrell. “Even with slowing national medical cost trends in the last few years, to see sustained overall increases as low as we are now seeing is dramatic. While we would not attribute such trends solely to the PCMH program, the 2 percent rate of increase for the members covered by the PCMH program is difficult to ignore. Just as importantly, quality performance has remained strong even as the savings against the expected cost of care has grown. This data, bolstered by increasing evidence of physician engagement and uptake in the program, makes us confident the program is taking root and yielding just the type of results we hoped for.”

Key quality indicators are trending positively, both over the life of the PCMH program and in 2014.

From the PCMH program’s inception in 2011 through 2015 year to date, CareFirst members in the company’s Maryland, Washington, DC and Northern Virginia service areas have experienced:

  • 19% fewer hospital admissions*
  • 15% fewer days in the hospital*
  • 20% fewer hospital readmissions for all causes*
  • 5% fewer outpatient health facility visits*

* Per 1,000 CareFirst Members

In 2014 alone, key quality indicators for those CareFirst members under the care of a PCMH physician continue to show positive results when compared to members under the care of non-PCMH physicians. CareFirst members seeing PCMH providers in 2014 had:

  • 5.1% fewer hospital admissions*
  • 10.7% fewer days in the hospital*
  • 8.5% fewer hospital readmissions for all causes*
  • 12.5% fewer outpatient health facility visits*

* Per 1,000 CareFirst Members

At the start of 2015, more than 4,300 primary care providers (primary care physicians and nurse practitioners) were participating in CareFirst’s PCMH program. Primary care providers (PCPs) are organized into Panels – groups of 5 to 15 physicians – for purposes of coordinating the care of members who have chosen them. As care giving teams, Panels can earn Outcome Incentive Awards (OIAs) based on both the level of quality and degree of savings they actually achieve against projections.

Approximately 84 percent of participating Panels in 2014 achieved savings for their members measured against the expected cost of care. In 2014, Panels had to achieve savings and meet specific criteria related to their quality results. 48 percent of the PCMH program’s 400 panels met both the cost and engagement criteria and will earn an average 59 percentage point increase on primary care fees paid by CareFirst. This increase is in addition to the 12 percentage point participation fee paid to all PCMH Providers. For a PCMH PCP earning an average award in 2014, this translates into $41,000 to $49,000 in increased revenue.

“We expected from the outset that a program of this type would take time to be understood and embraced,” said Burrell. “This is what we are now seeing. PCPs want to take a lead role in their patients’ health care, and our program provides the resources, data and incentives to let them do that.”

About CareFirst BlueCross BlueShield

In its 78th year of service, CareFirst, an independent licensee of the Blue Cross and Blue Shield Association, is a not-for-profit health care company which, through its affiliates and subsidiaries, offers a comprehensive portfolio of health insurance products and administrative services to 3.4 million individuals and groups in Maryland, the District of Columbia and Northern Virginia. In 2014, CareFirst contributed nearly $55 million to more than 300 community programs designed to increase the accessibility, affordability, safety and quality of health care throughout its market areas. To learn more about CareFirst BlueCross BlueShield, visit our website at www.carefirst.com or follow us on Twitter.