Effects of Care Coordination on Hospitalization, Quality of Care, and Health Expenditures Among Medicare Beneficiaries

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Context Medicare expenditures of patients with chronic illnesses might be reduced through improvements in care, patient adherence, and communication. 

Objective To determine whether care coordination programs reduced hospitalizations and Medicare expenditures and improved quality of care for chronically ill Medicare beneficiaries.

Design, Setting, and Patients Eligible fee-for-service Medicare patients (primarily with congestive heart failure, coronary artery disease, and diabetes) who volunteered to participate between April 2002 and June 2005 in 15 care coordination programs (each received a negotiated monthly fee per patient from Medicare) were randomly assigned to treatment or control (usual care) status. Hospitalizations, costs, and some quality-of-care outcomes were measured with claims data for 18 309 patients (n = 178 to 2657 per program) from patients' enrollment through June 2006. A patient survey 7 to 12 months after enrollment provided additional quality-of-care measures.

Interventions Nurses provided patient education and monitoring (mostly via telephone) to improve adherence and ability to communicate with physicians. Patients were contacted twice per month on average; frequency varied widely.

Main Outcome Measures Hospitalizations, monthly Medicare expenditures, patient-reported and care process indicators.

Results Thirteen of the 15 programs showed no significant (P<.05) differences in hospitalizations; however, Mercy had 0.168 fewer hospitalizations per person per year (90% confidence interval [CI], –0.283 to –0.054; 17% less than the control group mean, P=.02) and Charlestown had 0.118 more hospitalizations per person per year (90% CI, 0.025-0.210; 19% more than the control group mean, P=.04). None of the 15 programs generated net savings. Treatment group members in 3 programs (Health Quality Partners [HQP], Georgetown, Mercy) had monthly Medicare expenditures less than the control group by 9% to 14% (–$84; 90% CI, –$171 to $4; P=.12; –$358; 90% CI, –$934 to $218; P=.31; and –$112; 90% CI, –$231 to $8; P=.12; respectively). Savings offset fees for HQP and Georgetown but not for Mercy; Georgetown was too small to be sustainable. These programs had favorable effects on none of the adherence measures and only a few of many quality of care indicators examined.

Conclusions Viable care coordination programs without a strong transitional care component are unlikely to yield net Medicare savings. Programs with substantial in-person contact that target moderate to severe patients can be cost-neutral and improve some aspects of care.

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