Care Coordination in Medicare: What Works and for Whom?

May 2013

Americans today are living longer than at any point in the nation’s history.  Discoveries in the twentieth century largely eliminated infectious diseases as a significant contributor to American death rates, and more recent advances are helping people live with conditions that were once certainly fatal.  In a recent article in The Washington Post, Ezra Klein notes how this phenomenon and the prevalence of chronic illnesses is both challenging the U.S. health care system and spurring new opportunities for providing better care.

Federal policymakers are well-aware of the need to better manage chronic conditions.  In 2002, the Center for Medicare and Medicaid Services (CMS) selected 15 programs nationwide to participate in the Medicare Coordinated Care Demonstration, an initiative mandated by the Balanced Budget Act of 1997.  The goal of the demonstration was to test whether providing coordinated care services to Medicare fee-for-service beneficiaries with complex chronic conditions could improve patient outcomes without increasing costs.  However, an evaluation of the demonstration programs after the first four years of operation found that only two of the 15 programs reduced hospitalizations overall, and none generated net savings to Medicare.

Randall Brown, Ph.D., and Deborah Peikes, Ph.D., were among the researchers at Mathematica Policy Research who conducted the initial evaluation.  In a subsequent HCFO-funded study, Dr. Brown, Dr. Peikes and colleagues took a closer look at the 11 demonstration programs that CMS extended for two years or longer.  The researchers sought to determine which factors distinguished the most effective programs from the others, and whether the overall results from the initial study masked important effects on high-risk subgroups of patients.

Mirroring a key finding from the first evaluation, Dr. Brown and Dr. Peikes found that only two of the 11 programs reduced hospitalizations among the full sample of enrollees, and none of the programs reduced traditional Medicare Part A and B expenditures.  However, the researchers found that four programs had favorable effects on a subgroup of high-risk patients with at least one chronic condition and at least one hospitalization in the year before enrollment.  Among these patients, three of the four programs reduced hospitalizations by 8 to 15 percent, while the fourth program reduced hospitalizations by 33 percent.  While none of the four programs generated net savings to Medicare when care management fees were included, findings suggest the programs as a group were cost-neutral.

One of the more successful programs was Health Quality Partners, a nonprofit quality improvement services provider that acts as an adjunct to primary care in suburban and rural areas of southeastern Pennsylvania.  Health Quality Partners reduced hospitalizations by 33 percent among high-risk patients, and was the only program to generate significant Medicare savings before accounting for care management fees.  Health Quality Partners sends nurses to visit program enrollees on a weekly or monthly basis, with the goal of keeping seniors out of the hospital and preserving quality of life.  Most of the other successful programs in the demonstration also used frequent in-person contact between care coordinators and patients.  Additional distinguishing features of these programs included: strong working relationships with patients’ primary care physicians; care coordinators serving as communication hubs among a patient’s providers; use of evidence-based patient education interventions; comprehensive medication management; and close monitoring and sharing of information by the care coordinator during a patient’s hospital stay and after discharge.

Health Quality Partners is the only program in the demonstration that is still running, though CMS tells The Washington Post it will end the program’s funding in June due to its limited authority to expand the program further or make it permanent.

Additional information about Dr. Brown and Dr. Peikes’ HCFO study is available here.