Health initiatives slowing costs in Arkansas, report says

The patient-centered medical home model reduced health care costs by 1.2% in 2014 compared to cost increases of 0.6% among non-participating practices, according to the second annual Statewide Tracking Report prepared by the Arkansas Center for Health Improvement.

The independent health policy organization detailed the state’s efforts to implement the Arkansas Health Care Payment Improvement Initiative (AHCPII), which began in the summer of 2012. The initiative includes two reform strategies: patient-centered medical homes (PCMH), where a primary care physician manages the team that is providing care to a patient and encourages preventive care; and the episodes of care model, where providers are given financial rewards for keeping costs and quality within certain levels while being penalized for poorer results. A majority of the state’s health care payers are participating, including Arkansas Medicaid, Blue Cross and Blue Shield, QualChoice, Centene, and United Health Care, along with self-insurers including Walmart.

Michael Motley, ACHI’s assistant policy director and author of the report, said in an interview, “It’s really the first time we’ve been able to see the impact of shared savings to providers, and I think it’s really a positive indicator in terms of the quality improvements in that program and the financial outcomes as well.”

According to the report, practices enrolled in the PCMH model saw their costs decrease by 1.2%, compared to a 0.6% cost growth among non-enrolled practices and a 2.6% benchmark trend increase that was expected based on historical Arkansas claims experience prior to 2014. Most enrolled practices met milestones and improved or maintained on most quality metrics over the previous year. For example, participating clinics saw a 14.6% increase in adolescent wellness visits and a 3.1% increase in breast cancer screening. Meanwhile, participating beneficiaries saw a drop of 6% in hospitalizations from 2013 to 2014, and a 1.7% drop in emergency room visits.

Fifty-two percent of eligible practices are participating in the PCMH model, while 82% of Medicaid beneficiaries – 331,000 individuals – are being served. Meanwhile, 157,000 Blue Cross beneficiaries are participating, as are 44,000 with Centene/Ambetter and 4,300 through Qualchoice. United Health Care is expected to participate starting in 2016.

In 2014, the PCMH model saved $34.3 million in Medicaid health costs against the 2.6% benchmark trend, though not as much against the actual 0.6% increase that occurred among non-participating practices. Of that $34.3 million, $12.1 million was spent on payments to providers for care coordination, such as setting up electronic health records systems and ensuring that a medical staff member is available by phone at all times. Of the remaining $22.2 million, $5.3 million was shared with 19 provider groups who met quality and cost-saving metrics. Several clinics received more than $100,000 in shared savings checks.

The remaining $16.9 million was considered savings to the state – again, against the benchmark trend, not the actual one-year growth.

HOW IT WORKS
In the episodes of care model, a principal accountable provider, or PAP, is made responsible for coordinating care and ensuring that costs are controlled for a specific medical treatment. The PAP, which is typically the main provider of that service, is eligible for financial payments for meeting “commendable” quality and cost metrics and faces financial penalties for poorer performance. That risk-reward dynamic is meant to encourage more efficiency. For example, Debra Pate, ACHI communications specialist, said one gynecologist discovered that his hospital was testing every placenta after birth – a costly and unnecessary procedure that he made sure was ended.

The episodes of care model now involves 14 types of episodes. Among them, the caesarian section rate has fallen from 39% to 34%, antibiotic prescriptions for upper respiratory infections have fallen 17%, and the average cost for an attention deficit hyperactivity disorder episode has fallen 22%. The number of total joint replacements dropped from 141 to 101, with the 30-day readmission rate falling from 3.9% to 0%, resulting in 5-10% direct savings. Average costs for Medicaid tonsillectomies fell 14.6% from 2013 to 2014.

Arkansas Blue Cross Blue Shield reported a 10.3% reduction in costs for congestive heart failure and a drop in readmission rates from 14% in 2013 to 1% in 2014, a 1.6% cost reduction for perinatal episodes, and a 1.5% cost reduction for colonoscopies.

There were a couple of areas where the results didn’t affect improvement. The percentage of PCMH patients receiving beta blockers for congestive heart failure control has fallen 5.8%, while the post-hip and knee operation complication rate for Medicaid patients worsened from 8% in 2013 to 14.1% in 2014.