Priority Health's Tandem365 Care Model Pays Off

July 13, 2015
Surabhi Dangi-Garimella, PhD
Surabhi Dangi-Garimella, PhD

Priority has seen about a 40% reduction in acute inpatient hospitalizations, 50% reduction in emergency department (ED) visits, and a 30% drop in per-member-per month costs among 300 of its chronically ill enrollees.

Priority Health, like most other healthcare plans, is experimenting with care models to reduce the cost of its chronically ill patients…and transforming itself in the process. The company has over 600,000 members, with about 17% enrolled in the Medicare Advantage (MA) plan. Partnering with a local ambulance company and 5 skilled nursing facilities (SNFs)—in the state of Michigan where the company is headquartered—Priority has seen about a 40% reduction in acute inpatient hospitalizations, 50% reduction in emergency department (ED) visits, and a 30% drop in per-member-per month costs among 300 of its chronically ill MA enrollees.

These encouraging results have prompted the company to consider expanding their MA enrollment to 4000 over the next year, according to the Priority’s chief medical officer Jay LeBine, MD.

Chronically ill patients have a hard time managing their health as well as their care costs, according to a recent RAND Corporation-AHIP Foundation report published in The American Journal of Managed Care. Using results from a national survey of 70 health plans and 6 case studies of health plans attempting to improve care management, the authors learnt that all plans offer chronic care management programs and try to match patients with personalized interventions, based on care gaps and overall risks identified from claims data. Additionally, the survey identified an active collaboration between health plans and providers to integrate payer programs for patient self-management into the caregiver’s workflow.

Based on data that showed 1100 members in 3 counties accounted for $44.5 million in medical costs, Priority initiated a home-based primary care program with a medical group that involved a geriatrician overseeing a nurse practitioner and case managers. Following enrollment hurdles but documented cost savings—a result of a drop in specialist and ED visits—the company tried a “community collaboration model,” partnering with an SNF, which provided a boost to Priority’s enrollment numbers and the evolution of the Tandem365 program.

With an ongoing expansion, Priority found that of the 4000 patient eligible for the program, each with an annual cost of approximately $60,000, even a saving of 10% of the cost translate into $24 million annually. Priority is doing much better though, according to LaBine, and is saving about 20% of the annual medical cost.

With plans to expand Tandem365 to include 4000 of its MA members over the next 12 months, LaBine thinks the model could also be applied for dual eligibles in the state.

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