CareFirst touts $1B saved with patient-centered medical home program

11 Jul 2018 | SOURCE: Healthcare Dive

Dive Brief:

  • Over eight years, CareFirst’s patient-centered medical home (PCMH) program has saved more than $1 billion in healthcare spending, the insurer’s CEO Chet Burrell announced this week.
  • One of the largest plans of its kind in the nation, the PCMH includes more than 4,300 primary care physicians managing care for more than 1 million CareFirst members. It gives participating doctors value-based financial incentives and clinical supports such as nurses and data analytics.
  • Patients in the model have expressed high overall satisfaction in the plans, with ratings averaging 4.5 out 5.

Dive Insight:

The PCMH has contributed to projected overall savings of $5.5 billion for CareFirst. The savings are significant in the growing yet murky field of value-based payment models, which generally have mixed results when tested.

While most healthcare organizations report they are ready to transition to value-based models, many are wary, citing a lack of infrastructure as a roadblock in the shift.

Yet, a Change Healthcare report in June showed that value-based care initiatives reduced unnecessary medical costs by 5.6%, with almost a quarter of organizations reporting savings of 7.5% or more. The successes of CareFirst’s PCMH program point to the potential value-based programs have to save costs without sacrificing patient engagement or care.

CareFirst, the mid-Atlantic region’s largest private payer, first launched the PCMH program in January 2011 in an attempt to stop the continued rise of already-steep healthcare costs. On a per member, per month basis, overall CareFirst cost was increasing an average of 7.5% every year.

Since the introduction of the PCMH, rises in costs have slowed to an average of 3.5% annually, without any meaningful shifts in membership or enrollment, the company said.

CareFirst’s region includes Maryland, parts of northern Virginia, and Washington, D.C. — an area that accounts for some of the highest hospital admission rates in the country. Yet, in the eight years the PCMH has been active, CareFirst’s hospital admissions dropped 23%, Burrell said in a webcast announcing the results.

The PCMH program was able to do this, he said, by stabilizing patients in their homes or in the community, and by focusing on accountability for total cost of care, data availability, patient behavioral change and scalability. The program used payment rewards in lieu of asking providers to accept any downside risk.

CareFirst organized its participating doctors into panels consisting of about 10 primary care physicians and supporting nurses. Each panel received a patient care account, where all expected costs (credits) and all actual costs (debits) were recorded.

CareFirst tracked the expenses and compared debits and credits monthly. If a panel’s credits exceeded their debits, they got to keep a percentage of those savings. Additional incentives were given for long-term program participation, cost-effective referrals, engagement in care coordination and consistent performance.

More than $440 million has been paid out to primary care providers in additional performance-based payments, Burrell said. The average PCP in the program earning a reward received an additional $37,650 in annual income. Participation has been fairly stable, with fewer than 1% of PCPs leaving the program citing dissatisfaction.

On the eve of his retirement from CareFirst, Burrell concluded the performance report with CareFirst’s key takeaways from the program. He stressed consistency in population health-based incentives to build trust with physicians, easily accessible data and accountability.

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