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Anthem Blue Cross ACO Generates Savings of $8 Million

By Doug Desjardins, California Healthfax  
   June 09, 2015

By focusing on members who have two or more chronic conditions, an Anthem Blue Cross ACO in California has been able to save almost $8 million by reducing incidences of hospital stays and outpatient visits, and increasing the use of generic prescription drugs.

An Anthem Blue Cross ACO focused on improving care for people with multiple chronic conditions generated nearly $8 million in cost savings over a one-year period.

The Enhanced Personal Health Care Program ACO involves Anthem PPO members who have two or more chronic conditions, such as diabetes, congestive heart failure, and asthma. Anthem said the program generated $7.9 million in savings among six medical groups by reducing the incidence of hospital stays and outpatient visits and increasing the use of generic prescription drugs. Anthem did not provide the total amount of money spent on patients taking part in the program.

"Gone are the days when PPO members with multiple chronic conditions rarely receive team-based coordinated care," said Anthem Blue Cross President Brian Ternan. "These results are further evidence that providing such care in the framework of an Anthem ACO does lower costs." The results were generated by approximately 200,000 participants during a one-year period from July 2013 to June 2014. The goal was to better coordinate care so that patients would better manage their conditions and improve their overall health.

Participants reported a 7.3% decline in hospital admissions per 1,000 patients, a 2.3% decline in outpatient visits per 1,000 patients, and a 4.2% increase in the use of generic prescription drugs. While 19 medical groups are taking part in the Enhanced Personal Health Care Program, the $7.9 million in savings was reported by six medical groups who started their programs around the same time. They include Sharp Rees-Stealy Medical Group, UC Davis, Sharp Community Medical Group, HealthCare Partners, Sante Community Physicians IPA, and SeaView IPA.

Michael Belman, MD, medical director for payment innovation at Anthem, was encouraged by the results. "Unlike the HMO population, there isn't much of a history of coordinating and managing care among PPO members," said Belman. "Fortunately, many of the medical groups taking part in the program have been around for more than two decades and are very familiar with the HMO environment and managed care."

Anthem was also encouraged by the fact prescription spending declined 4.2%— due to a higher volume of generics—while the total number of prescriptions written by physicians increased. "That shows more patients are adhering to their prescription regimes and that physicians are writing more scripts for generic medications that work just as well as brand names," said Belman.

Medical groups participating in the program are provided with patient medical data and a care coordination fee from Anthem but are given leeway to craft their own coordinated care plans. Sharp Rees-Stealy medical director Steven Green, MD, said physicians their "employ telehealth visits, home visits, and remote monitoring" for patients while HealthCare Partners operates a separate ACO unit with a dedicated staff of care coordinators who track patients.

Gerald Kominski, director of the UCLA Center for Health Policy Research, said the results reported by Anthem are a sign that value-based care can produce results. "I find the results encouraging because they showed reductions in hospital IP [inpatient] days and stays, the most expensive component of care," said Kominski. "These are system changes that are long overdue, in my opinion, and indicate that healthcare providers are moving at a faster rate to adopt value-based care."

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