Another strategy that insurers hope will cut costs and improve care involves so-called medical homes.
The term “medical home” is misleading, as it refers not to a place but a practice—one in which doctors coordinate primary care for patients with chronic conditions like diabetes. Doctors have tried organizing such operations before, but now insurers are stepping up their role, offering financial incentives in an attempt to change the way physicians deliver care.
CareFirst BlueCross BlueShield recently started offering a medical-home program to its 3.5 million members and 2,300 physicians in Washington, D.C., Maryland and Virginia. Doctors who enroll get a 12% increase in their insurance payments; bonuses of $200 each time they set up a treatment plan for a patient; and $100 for monitoring an existing plan.
“As far as we know, it’s the biggest medical home in the country,” says Chet Burrell, the insurer’s president and chief executive.
Other insurers are also getting involved: WellPoint and UnitedHealth Group are running similar programs.
In CareFirst’s program, groups of five to 15 doctors each will form a pool of their sickest patients and devise treatment plans for them. Enough patients must be under each panel’s care for the insurer to be able to measure whether the care made a difference in overall cost and quality. If there are too few, a handful of costly patients could skew the results. The doctors also need to provide a real medical “home” for their patients and be reachable around the clock.
The insurer sets a global budget for each patient based on a calculation of how much the care for a type of illness should cost in a year. Doctors are paid for the services they order for each patient. If a specialist is needed, the expense for that comes out of the global budget, too.
If a balance is left at the end of the year, the doctors share it with the insurer. But if the doctor goes over the budget, there is no penalty. The insurer pays. This protects doctors from some financial pressures, and from the kind of criticisms about skimping on care that arose with the managed-care model in the 1990s. “We don’t want to repeat a lot of that experience,” Mr. Burrell says.
Some 45% of CareFirst’s doctors have joined the initiative since January, he adds. He expects that figure to climb to 80%.
Originally published in the March 28, 2011 edition of The Wall Street Journal.