Patient Centered Medical Home Yelds $40 Million Savings In 18 Months

CareFirst Blue Cross Blue ­Shield has established one of the largest patient-centered medical homes (PCMH), which already yielded $40 million in cost savings in the program’s short 18-month lifespan. To better understand how CareFirst became so successful so quickly, FierceHealthPayer spoke with Chet Burrell (pictured), the insurer’s chief executive officer.

FierceHealthPayer: How does CareFirst’s PCMH differ from other payers’ similar programs? It has achieved fast results and quick growth–what are the keys to that success?

Chet Burrell: There are a few reasons for our success. The first is the way we set up accountability for primary care physicians. It’s way beyond just primary care; it’s for all care in all settings for their patients. They are accountable for the aggregate outcome, including cost and quality, for their patients.

The second difference is that the incentives in our program are very powerful and are tied to their accountability. Their accountability is for global costs and their incentives are based on global cost savings. So if you can prevent hospitalizations at least to some degree by stabilizing these patients then you share in the savings of the aggregate medical dollar, not just the primary care piece of of that.

That means there are very powerful rewards so you can get what amounts to anywhere between 0 percent or 1 percent increase in fees to 70 percent of fees. So it’s not some little tiny marginal thing. It’s not paying them $20 per member per month. If you save on the aggregate medical dollar even 5 percent or 6 percent, you get really big rewards.