A Cost Analysis of the Iowa Medicaid Primary Care Case Management Program

Abstract

Objective. To determine the cost savings attributable to the implementation and expansion of a primary care case management (PCCM) program on Medicaid costs per member in Iowa from 1989 to 1997. Data Sources. Medicaid administrative data from Iowa aggregated at the county level. Study Design. Longitudinal analysis of costs per member per month, analyzed by category of medical expense using weighted least squares. We compared the actual costs with the expected costs (in the absence of the PCCM program) to estimate cost savings attributable to the PCCM program. Principal Findings. We estimated that the PCCM program was associated with a savings of $66 million to the state of Iowa over the study period. Medicaid expenses were 3.8 percent less than what they would have been in the absence of the PCCM program. Effects of the PCCM program appeared to grow stronger over time. Use of the PCCM program was associated with increases in outpatient care and pharmaceutical expenses, but a decrease in hospital and physician expenses. Conclusions. Use of a Medicaid PCCM program was associated with substantial aggregate cost savings over an 8-year period, and this effect became stronger over time. Cost reductions appear to have been mediated by substituting outpatient care for inpatient care.

The Impact of Primary Care: A Focused Review

“…This study and the evaluation of the Geisinger PCMH suggest that primary care interventions may require long periods of time to demonstrate financial savings [ 109 , 158 ]. An eight-year study assessing the impact of a primary care case management (PCCM) program in Iowa's Medicaid program did demonstrate reductions in costs due to shifting expenses from the hospital to outpatient setting [ 160 ]. These savings increased over time, reinforcing what other studies suggest: these desired significant cost savings may take time to achieve [ 160 ].…”

“…An eight-year study assessing the impact of a primary care case management (PCCM) program in Iowa's Medicaid program did demonstrate reductions in costs due to shifting expenses from the hospital to outpatient setting [ 160 ]. These savings increased over time, reinforcing what other studies suggest: these desired significant cost savings may take time to achieve [ 160 ]. Chernew et al [ 161 ] explored how PCP/specialist supply influences cost, and the findings indicated that increasing the PCP supply may accrue a short-term advantage but does not address long-term problems.…”

The role of mental and behavioral health in the application of the patient-centered medical home in the Department of Veterans Affairs

“…The Expanded Team consists of a variety of specialty resources. Similar teams have been associated with improvements in efficiency, mortality, hospitalization, access, and coordination [2][3][4][5][6][7][8]. Figure 1 illustrates the relationship infrastructure of PACT team members.…”

State Health System Performance And State Health Reform

“…Use of the PCCM program was associated with an increase in pharmaceutical expenses but a decrease in hospital and physician expenses. 6 Changing payment methods under insurance plans could also reward accountable care organizations for stewardship of resources. Accountable care organizations are integrated delivery systems, hospital-physician organizations, large physician group practices, networks of primary care practices, or other organizational arrangements large enough to ensure coordination of a comprehensive array of services.…”