Medicare and Medicaid outpatient care innovations show potential to reduce costs

Waltham MA—Several innovative health care delivery system changes have the potential to reduce the total costs of care for Medicare and Medicaid beneficiaries, according to an analysis by RTI International. 

The study, published in the March issue of the journal Health Affairs, found that after two years, four types of delivery innovations – health information technology, community health workers, integrated behavioral health programs, and medical homes – produced greater cost savings than conventional programs that did not have these elements. Savings were also larger in innovations that targeted clinically fragile patients with chronic conditions.

Researchers evaluated 43 outpatient care programs that received grants in round one of the Health Care Innovation Awards funded by the Center for Medicare and Medicaid Innovation. 

“Much of what we know about system delivery models come from small studies based on a single innovation in a single location,” said first author Kevin Smith, of the Center for Advanced Methods Development at RTI. “The Health Care Innovation Awards portfolio gives us access to a large number of organizations engaged in various approaches to health care reform, so our analysis can offer more information on what innovations may have promise.”

Half of the awardees combined multiple types of delivery innovations that have the potential to produce even greater savings.

However, while the magnitude of these effects was substantial (ranging from $98 to $210 per beneficiary per calendar quarter), they did not exceed conventional levels of statistical significance. 

“The precision of these preliminary cost effects will improve by June when we’re able add data from more innovations and for the full award period,” Smith said.