Population Health Cuts Anthem ACO Costs By Nearly $8 Million

By Christine Kern, contributing writer

Anthem’s program provides doctors with additional payments if they lower the cost of patients’ care.

Anthem Blue Cross of California announced it has saved almost $8 million in one year by focusing on preventive care. Anthem said the savings came under its Enhanced Personal Health Care Program, which “targets PPO members with two or more chronic conditions to improve their overall health through enhanced care coordination,” by improving total population health.

As part of the initiative, Anthem paid participating physicians additional money to enhance their attention toward patients with at least two chronic diseases such as diabetes, asthma or congestive heart failure, The Wall Street Journal reports.

“The Enhanced Personal Care Program helps primary care providers leverage clinical analytics and big data as they offer team-based, personalized care and robust chronic disease management for patients at risk of suffering from highly fragmented services or insufficient support,” explains Health IT Analytics.

“Gone are the days when PPO members with multiple chronic conditions rarely receive team-based coordinated care,” Brian Ternan, president of Anthem Blue Cross said. “These results are further evidence that providing such care in the framework of an Anthem ACO does lower costs.”

Anthem reports the program caused a 7.3 percent decline in hospital admissions per 1,000 patients among the six major medical groups studied, reduced outpatient visits by 2.2 percent, and increased the rate of generic drug prescriptions by 4.2 percent per thousand.

“We’ve done a lot of work to provide better care for these patients,” added Thomas Balsbaugh, medical director for the Patient-Centered Medical Home program at UC Davis Health System, one of the six high-achieving ACOs. “We’ve observed a decrease in cost per chronic episode. We’ve standardized processes – including care in between episodes. Our case management team has reduced emergency department use, and our care managers have helped patients improve their adherence to medications. But most importantly, we’ve maintained our quality scores while reducing costs, and we have a high rate of satisfaction for both patients and providers.”

Value-based reimbursement is one of the foundations improving population health management, according to other ACO participants, by rewarding providers for taking on the extra tasks involved in developing population health management infrastructure and allocating staff hours to providing care coordination services. Each provider group receives a care coordination incentive from Anthem that covers many of the costs related to these activities.

“We currently live in a fee-for-service system where care is historically fragmented, based on reimbursement where the more services we provide the more we get paid, and generally where there is little accountability for the wellness and value we provide for our patients,” said John Jenrette, MD, CEO, Sharp Community Medical Group. “The Anthem ACO provides the first real opportunity to improve patient care and outcomes while reducing costs and adding real value to the care we provide PPO patients.”