New form of U.S. healthcare saves money, improves quality, one insurer finds

In one of the largest tests of a novel way to deliver and pay for healthcare, insurer CareFirst BlueCross BlueShield announced on Thursday that 1.1 million people receiving care through its "patient-centered medical homes" last year were hospitalized less often and stayed for fewer days compared to patients in traditional fee-for-service care.

Medical homes, a centerpiece of President Barack Obama's healthcare reform, have been heralded as one of the best hopes for reducing the cost of U.S. healthcare, the highest in the world, and improving its quality, which lags that of many other wealthy countries.

Medical homes are basically groups of primary-care providers who pledge to coordinate care, adhere to guidelines meant to improve patients' health, and avoid unnecessary tests, among other steps.

According to CareFirst, its medical home program, in its fourth year, also delivered high-quality care, measured by yardsticks such as whether doctors gave recommended cancer screenings and immunizations. The organization said it saved $130 million or 3.5 percent compared to projected spending under standard fee-for-service.

The savings reached a level "I wouldn't have thought possible," said CareFirst President Chet Burrell. The non-profit covers 3.4 million people in Maryland, Washington, D.C., and northern Virginia.