WASHINGTON – A five-year pay-for-performance project involving 10 large physician practices across the country demonstrated increased revenue savings and improved quality of care, according to results released this year.

The Physician Group Practice Demonstration was launched by the Centers for Medicare and Medicaid Services to enable physician practices to demonstrate that proactive and coordinated care has the potential for larger revenue savings. It’s the first P4P project to work directly with physician practices.

Of the physician practices taking part in the study, the Geisinger Clinic in Danville, Pa., and the University of Michigan Family Practice Group in Ann Arbor, Mich., showed improvement in at least 29 of the 32 quality measures tracked in the third year of the project.

“We focused on hardwiring reminders and alerts into the electronic health record to enhance care consistency and reliability particularly related to diabetes and coronary care as well as ensuring adults receive preventative health screenings,” said Frederick Bloom, MD, assistant chief qualify officer of the Geisinger Health System.

Geisinger, which encompasses 40 community practices in central and northeast Pennsylvania, reportedly improved its quality of care while lowering the cost to patients participating in the project. The clinic was able to improve care on all 32 categories, which include continuing programs for diabetes and coronary artery disease, adult preventative care and hypertension.

“By participating in this project, we’re able to develop more effective ways of consistently bringing quality and value to all our patients, not just the Medicare beneficiaries who are the focus of the demonstration project,” said Bloom.

Results were similar with the University of Michigan Family practice group. Of the 32 measured categories, the UM Family practice group improved care on 29 fronts.

“The UM Faculty Group Practice invested significant time and resources in this project because it provided the opportunity to develop and test potential interventions that could improve clinical outcomes and reduce costs for patients with chronic disease,” said David Spahlinger, MD, senior associate dean for clinical affairs.

The UM Family Practice group found Medicare savings of $2.9 million. Officials said this would be the third year that UM has recorded savings as well as improved care.

The project began by focusing on the quality of care of patients with diabetes. During the second year, it was expanded to include congestive heart failure and coronary artery disease, and by the third year it included hypertension and breast and colorectal cancer screenings.

“There are plenty of opportunities to squeeze costs out of the system while also improving quality of care,” said Caroline Blaum, associate chief of geriatric medicine at the VA Ann Arbor Healthcare System.

Many healthcare industry observers predict that pay-for-performance may be the future of healthcare reimbursement.

Jon Perlin, MD, president of clinical services and chief medical officer for the Hospital Corporation of America, said value-based care is a good way to bring accountability to providers and encourage coordination across different care settings.

“The new bottom line is performance,” he said. Perlin touts remote monitoring of chronic care patients, the advancement of health IT and changing incentives to bundle episodes of care.

Andrew Webber, president and CEO of the National Business Coalition on Health, said larger employers are focused on improving the level of care while containing costs.

“I think we need to move in the direction of rewarding prevention, primary care, chronic care management, and do that in a way that all stakeholders can agree upon,” he said.