Program features and targeting are the keys to successful Medicare care coordination interventions.

Policymakers seeking to slow the growth in Medicare spending are increasingly exploring interventions involving beneficiaries with multiple chronic conditions. These beneficiaries tend to have high rates of hospital admissions and readmissions, making them a key driver of total Medicare spending. Several factors appear to contribute to the high rates of hospitalizations among these patients, including inadequate or inappropriate care, poor patient adherence to recommended medication and self-care regimens, and poor communication among a patient's several providers. In this context, care coordination has emerged as a potential approach for reducing hospitalizations, controlling Medicare costs, and improving beneficiaries' quality of life. In 2002, the Center for Medicare and Medicaid Services (CMS) selected 15 programs nationwide to participate in the Medicare Coordinated Care Demonstration, an initiative mandated by the Balanced Budget Act of 1997. The goal of the demonstration was to test whether paying the programs to provide care management to fee-for-service Medicare beneficiaries, in addition to beneficiaries' usual services, could either reduce Medicare expenditures or increase quality of care and patient satisfaction without increasing total expenditures. were among the researchers at Mathematica Policy Research who evaluated the demonstration programs after the first four years of operations. 3 They found that only 2 of the 15 programs reduced hospitalizations overall and none of the programs generated net savings to Medicare. However, the evaluation also suggested that care coordination interventions have the potential to be cost-neutral and to improve patients' well-being. key findings • The 11 programs in the extended Medicare Coordinated Care Demonstration did not reduce hospitalizations among the overall sample of fee-for-service Medicare beneficiaries and did not result in net savings to Medicare. • However, four of the care coordination programs reduced hospitalizations by 8 to 33 percent among enrollees with a high risk of near-term hospitalization and were cost neutral. findings brief Changes in Health Care Financing and Organization is a national program of the Robert Wood Johnson Foundation administered by AcademyHealth.