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Alex Nixon 412-320-7928
Business Writer
Pittsburgh Tribune-Review

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Highmark Inc. will expand a pilot project to lower overall health costs by paying doctors more to keep patients out of hospitals.

The state's largest health insurer said on Wednesday the expanded program would include 1,050 primary care physicians in Pennsylvania and West Virginia who treat about 171,000 Highmark members.

A one-year pilot program, begun in June 2011, included 160 primary care physicians. It reduced health care costs 2 percent for 45,000 Highmark members, the insurer said. The program achieved that result while increasing the reimbursement for doctor visits and paying bonuses to doctors who met quality measures.

“We demonstrated a number of positive outcomes from the pilot practices, including lowering per member, per month overall cost,” said Michael Fiaschetti, president of health markets at Highmark.

The program, known as a “patient-centered medical home,” requires physicians to take greater accountability in coordinating care, such as following up with diabetics to make sure they take medications and go for regular tests to track blood sugar levels.

Physician practices traditionally are not paid to follow up with patients, said Dr. Sam Reynolds, chief medical information officer for St. Vincent Medical Group in Erie, a 100-physician practice owned by St. Vincent Health System.

Highmark insures about half of the practice's 70,000 patients, Reynolds said. Highmark is negotiating to acquire the Erie hospital network.

By increasing the primary care physician reimbursement, Reynolds said the practice could justify spending money on nurses and other staff to make sure patients with expensive, chronic diseases receive proper care at the right time.

“We became involved in the pilot primarily because we are big believers that there needs to be a new method of payment for primary care,” Reynolds said. “Currently we're paid for face-to-face visits. ... But there's so much we could do if there was a way to be paid for the work outside of the visit.”

Though Highmark would spend more money paying primary care physicians initially, it anticipates big savings by keeping people out of hospital beds and emergency rooms because they receive preventative care.

“We want to shift people away from emergency rooms and get the chronically ill into regular, more routine interactions with their doctors,” said Dr. Paul Kaplan, Highmark's senior vice president of provider strategy and integration.

During the next three years, Highmark said, it hopes to have about 75 percent of its members in some kind of pay-for-performance arrangement.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

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