Managed care plan may deliver substantial annual per patient health care cost savings

Annual health care costs may be cut by as much as 50% per patient through decreased use of services, including excessive emergency room visits and unnecessary hospitalizations, once the Affordable Care Act of 2014 is implemented, based on a study of patients enrolled in Virginia Coordinated Care for the Uninsured (VCC), a community-based primary health care program.

“If a patient is unfamiliar with how to navigate a health care system, then the easiest thing for them to do is to go into the emergency department because they know they will receive care and they don’t have to worry about the payment end – they won’t be turned away,” lead author of the study, Cathy J. Bradley, PhD, chair of the Department of Healthcare Policy and Research at Virginia Commonwealth University (VCU), stated in a VCU press release. “In a managed care-type program, the leg work is done for them. They’re attached to a primary care physician that they know will accept them as a patient and will start to look into their health care needs, assess and evaluate them and connect them to services beyond the primary care provider if needed and get their health conditions under control.”

In studying 26,284 uninsured low-income adults enrolled in the community-based VCC program in a 7-year period, Bradley and colleagues found emergency room in-patient visits decreased while primary care appointments increased for individuals continually enrolled in the program. On average, over a 3-year period, annual in-patient costs per VCC enrollee fell from $8,899 to $4,569, according to the release. This represents about a 50% cost savings.

The authors of the study, which appeared in Health Affairs, wrote in their abstract that, however, it may take “several years of coverage for substantive health care savings to occur.”

Reference:
Bradley CJ, Gandhi SO, Neumark D, et al. Lessons for coverage expansion: a Virginia primary care program for the uninsured reduced utilization and cut costs. Health Aff. 2012;31(2):350-359. doi: 10.1377/hlthaff.2011.0857.

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