A Primary Care Program That Reduced Spending

No matter what the Administration says, the massive expansion of coverage under the reform law is highly likely to increase overall health spending.  Programs are needed to keep this new spending, mostly by the government, as low as possible.  A study in Health Affairs gives details and results of a primary care program in Virginia that appears to have succeeded in expanding coverage while keeping costs under good control.   (HA Article)   The program was associated with Virginia Commonwealth University in Richmond, and involved over 26,000 adults who were previously uninsured.  The patients had to enroll in the program and were assigned to a community-based primary care physician, who was paid a monthly management fee, along with fee-for-service payments at about 110% of the Medicaid fee schedule in Virginia.

Most of the patients were relatively poor and as such, likely had worse health behaviors and health status than those of other population segments.  But over a three year period, the program’s emphasis on primary care led to less use of the emergency room, fewer hospitalizations and more use of primary care visits.  Results were best for patients who stayed enrolled; their use of the ER dropped by over a third and their average annual inpatient spending decreased by almost two-thirds.  Total annual costs for this group declined 46% from the first to third year and average cost per visit dropped by almost 20%.  Particularly encouraging was that the largest decreases occurred in patients with multiple conditions.  The results show the value of a focus on primary care, but an unfortunate negative was that only about a third of the patients stayed enrolled in the program for the entire three years.