The Cost, Quality, and Experience Impact of Population Health in Primary Care

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Objectives: To evaluate whether a primary care practice transformation that used population health strategies and predictive modeling to match clinical resources to patient needs reduced inpatient and total spending, while maintaining or improving quality and patient experience for adult Medicaid and Medicare patients.

Study Design: Quasi-experimental analysis using an adjusted historical control.

Methods: Measures included a quality composite metric, patient experience indicators, and total cost of care, as assessed by an independent actuary.

Results: Payers saved a cumulative $15.8 million (1.7%) across a 26-month program implementation period, which was substantially larger than the approximately $3.9 million in program staffing expenses. Driven by reduced inpatient spending, the total cost of care for high-risk adults was reduced across all lines of business, ranging from —$40.88 per member per month (PMPM) to –$737.20 PMPM. Payer savings were larger for Medicare (5.5%) than for Medicaid patients (0.7%). Patient experience metrics improved during this time. Quality findings were mixed, likely confounded by the 2014 Medicaid expansion.

Conclusions: These findings suggest that risk-stratified primary care delivery models can achieve the Triple Aim and could be self-sustaining through alternative payment models that allow reinvestment of savings into program costs. These results are consistent with literature that finds that short-term return-on-investment requires carefully targeting patients at risk of hospitalization, that reducing Medicare hospitalizations may be more easily achieved than for Medicaid, and that opportunities may be greater among unmanaged fee-for-service populations. Differences in savings by payer and by year underscore the importance of all-payer approaches to program financial sustainability.

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Am J Manag Care. 2017;5(3):10-20