Study: Blue Cross avoided $155 million in costs in medical home project

David Share, M.D., senior vice president of value partnerships with Blue Cross and Blue Shield of Michigan, has been shepherding the Blues' patient-centered medical home project during the five years of its existence.

With more than 3,017 physicians and 994 groups participating in Michigan, Share has slowly seen physicians move from skepticism, to acceptance and advocacy, to patient care improvements, and now to real cost savings.

"We always had some data that medical homes are working, but now we have strong evidence" of cost and quality savings, Share said.

During the first three years of the program, Blue Cross has documented $155 million in savings by avoiding hospital admissions and readmissions, emergency department visits, and through increased generic drug use and less reliance on expensive radiologic studies, according to a study in the July 5 Health Services Research Journal.

Share said preliminary data shows that the medical home project saved $155 million in 2012 alone, increasing the savings to $310 million. Some 2 million patients are participating through their primary care physicians, Blue Cross said.

Each year, said Share, as physicians added preventive and evaluative services and became more sophisticated in monitoring and engaging patients, savings have increased.

For example, savings totaled $14.9 million from July 2008-July 2009, $47.3 million in July 2009-July 2010 and $92.9 million from July 2010-July 2011, the study found. For adults, the savings amounted to $26.37 lower per member per month of medical costs.

Using University of Michigan researchers, the Blue Cross study is the first major study on the financial savings on the use of patient-center medical homes by primary care physicians. Blue Cross sponsors the nation's largest patient home project.

"The problem with the past studies, which have been much smaller in scale, is they aren't as robust as ours," Share said. "We have spent quite a few years in helping these practices implement these homes. It takes time to see the effects."

Share said physicians might put a medical home component in place–a disease registry or evening hour appointments – and the results might not appear until the second year.

"Our study has shown steady improvement from year to year. Physicians, nurses and staff need time to ingrain them into the practices," he said.