Is one percent cost savings enough to curb growing healthcare costs?

In a legislative report on the Accountable Care Collaborative (ACC), the Colorado Department of Health Care Policy and Financing details how the program helped the state avoid $44 million in costs during the 2012-2013 fiscal year. That’s less than one percent of the total federal and state spending for Colorado Medicaid this year.

The ACC program has assigned about 350,000 Medicaid clients to patient-centered medical homes. These clients make up about half of Colorado’s Medicaid population. Primary care medical providers and case managers coordinate medical and non-medical care and services within seven regional care collaborative organizations.

The goal is to improve health outcomes within a sustainable care delivery system. By several measures, the program did in fact improve health outcomes of members compared with clients who were not enrolled in the program:

  • 15 – 20 percent reduction in hospital readmission rates
  • 25 percent reduction in high-cost imaging services
  • lower rates of emergency room visits
  • lower rates of exacerbated COPD (22 percent), hypertension (5 percent) and diabetes (9 percent) requiring hospitalization

However, Colorado had to spend money to save money. Administrative fees and other program costs totaled almost $38 million dollars, which means the real cost savings was closer to $6 million. Is that enough to achieve a sustainable care delivery system?

The legislative report sounds hopeful notes. In addition to achieving modest cost savings, “the ACC has also invested in long term health outcomes. By investing in lower cost medical visits and services that serve a preventive function, the ACC is able to provide appropriate disease management that reduces future, more costly interventions.”

The report points to an “examination of metrics related to outpatient medical visits and services” that suggest a change in the way ACC enrollees behave, suggesting that they go more frequently to see their primary care physician for preventive care rather than delaying care or going to a hospital emergency room.

The report describes the visibility of key performance indicators (KPIs) as one of the core benefits of the ACC program. Shared with program administrators and providers, the KPI metrics are based on patient classification methodologies developed by 3M that identify potentially preventable hospital readmissions, potentially preventable emergency room visits and avoidable, high-cost imaging services (a type of potentially preventable ancillary service).

According to the report, transparency and access to data have allowed those running the program to understand where they can make changes that truly result in improvements. The right metrics may help them gauge how much effort it will take to shift behavior on the part of providers and steer patients toward sustainable alternatives.

Kristine Daynes is a Product Marketing Manager for Payer and Regulatory Markets at 3M Health Information Systems.

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