Multipayer primary care transformation: impact for Medicaid managed care beneficiaries.

OBJECTIVES: To evaluate the effects of Michigan Primary Care Transformation (MiPCT), a statewide multipayer patient-centered medical home (PCMH) demonstration in 2012-2015, on cost, utilization, and quality among Medicaid managed care beneficiaries. STUDY DESIGN: Observational longitudinal study with comparison groups. METHODS: Difference-in-differences (DID) analyses compared changes in outcomes among beneficiaries whose primary care providers participated in MiPCT, non-MiPCT PCMH, and non-PCMH practices. Net cost savings were derived. RESULTS: The study included 173,179 MiPCT, 209,181 non-MiPCT PCMH, and 148,657 non-PCMH beneficiaries. Against 1 or both comparison groups relative to 2011, MiPCT adults had significant reductions in cost, emergency department (ED) visits, and hospitalization risk in 2015. Against both comparison groups, MiPCT high-risk adults showed significant cost reduction in 2014-2015, ED reduction in 2015, and reduced hospitalization risk in 2013-2015. For children, no significant relative change in cost occurred, but both ED and hospitalization risk were reduced in 2015. In 2013-2015, cumulative net cost savings were $15,569,526 (95% CI, $3,416,832-$27,722,219) (return on investment [ROI], $3.60) for adults and $23,998,180 (95% CI, $11,782,031-$36,214,347) (ROI, $10.69) for high-risk adults, and a cost increase of $16,517,948 (95% CI, $7,712,286-$25,323,609) (ROI, -$1.30) for children. Quality metrics were significantly higher in MiPCT in most years, although most DID estimates were not significant. CONCLUSIONS: Evidence of cost savings exists among MiPCT Medicaid managed care adults; it was driven by high-risk adults, who also had reduced hospitalization risk. For children, no cost reductions occurred, but hospital and ED utilization were reduced in 2015. MiPCT maintained equal or higher quality of care but did not show consistent improvement.