Effect of Patient Care Coordination on Hospital Encounters and Related Costs

Given high costs of hospital encounters, providers have increasingly turned to patient-centered health care programs to improve cost-effectiveness and population health for patients with high needs. Yet, evidence is mixed about program effectiveness. This pre-post comparative analysis assessed whether the number of hospital encounters and related costs decreased for patients who received care coordination services funded through Texas's 1115(a) Medicaid waiver incentive-based payment model, under which providers created new programs to improve care quality, population health, and cost-effectiveness. This study compared hospital records for patients who were frequent emergency department users at 4 urban safety net hospitals in Texas and state data for hospital encounters for the calendar years 2013 through 2015. The study included 9061 patients who frequently used emergency departments: 4117 patients who received waiver-funded care coordination services at 2 hospitals and 4944 patients who received usual care at 2 comparison hospitals. Regression models compared changes in patients' hospital use and length of stay for the 2 groups. Patients receiving waiver-funded care coordination had a 19% lower probability of hospitalization after receiving care coordination relative to patients who received usual care, for a mean savings of approximately $1500 per year per patient. Receiving care coordination was not associated with a change in length of stay. Care coordination developed by hospitals to meet the needs of their most vulnerable patients can reduce their use of hospital resources through better preventive care. These findings bolster the business case for care coordination, which may help ensure service continuation.