How Ambulatory Intensive Caring Units Can Reduce Costs and Improve Outcomes

Arnold Milstein, Director of the Clinical Excellence Research Center at Stanford School of Medicine

A group of articles examines ways to redesign primary care to improve affordability.

May 2011

In 2005, CHCF provided to Arnold Milstein, MD, MPH, a nationally recognized health care innovation thought leader, the first of several grants under the nickname the "Bug Project." The "bug" reference was to the Volkswagen Beetle, since the goal of these efforts was to design innovations in high-quality health care delivery that maximally reduce annual per capita health care spending for US workers and their families, just as the Beetle had reduced the total annual cost of new car ownership. An initial investigation explored whether employers were interested in such a model as a part of health plan offerings and which benefit features might be important. Discussions ensued with more than 20 employers, unions, and other benefit program sponsors interested in providing more affordable options.

To design innovative care delivery models that would greatly reduce medical spending while also improving quality, Milstein recruited a "mission impossible" project team of clinicians, managers, and systems engineers. The first of two innovations to emerge was a new form of primary care designed to exclusively serve patients with complex, unstable chronic illness. Such patients are at high risk for ER use and unplanned hospitalization. The team named it an "Ambulatory Intensive Caring Unit" or A-ICU. The project report, Redesigning Primary Care for Breakthroughs in Health Insurance Affordability, detailed the design specifications and projected net savings in total annual heath spending. (The second innovation was a "video visit booth," many features of which have been incorporated into Cisco's HealthPresence product.)

In September 2009, Health Affairs published the article "American Medical Home Runs" by Milstein with Elizabeth Gilbertson. This article describes four primary care practices in the United States that constitute "medical home runs" because their patients incur 15 to 20% less (risk-adjusted) total health care spending per year than patients treated by regional peers, without evidence of reduced quality. All four were found to incorporate "DNA" that substantially overlapped with the A-ICU design.

Simultaneously, Milstein recruited two large self-insured, employer-sponsored PPO health benefits plans that he advised through his affiliation with Mercer, the employee benefits consulting firm, to test the A-ICU design and measure its impact on annual per capita medical spending and quality of care. One plan served Boeing employees in Puget Sound, and the other served casino workers enrolled in the UNITE HERE health plan in Atlantic City.

The details of Boeing's successful test of the A-ICU model are chronicled in the Health Affairs blog post titled "Are Higher Value Models of Care Replicable?" by Milstein and coauthors Pranav Kothari, MD, and Rushika Fernandopulle, MD, MPP, of Harvard Medical School and Renaissance Health (a Boston-based health care innovation consultancy), and Theresa Helle of the Boeing Company in Seattle.

The Atlantic City A-ICU test was described in the January 2011 New Yorker magazine article "The Hot Spotters: Can We Lower Medical Costs by Giving the Neediest Patients Better Care?" by Dr. Atul Gawande. Gawande's piece tracks the work of several programs across the country delivering high-intensity care to the chronically ill in order to lower average annual per capita health spending. Gawande tells the Atlantic City story through the eyes of Dr. Fernandopulle, who was recruited by the UNITE HERE health plan's strategy director Elizabeth Gilbertson to serve as the second of three medical directors of the Atlantic City A-ICU, called the "Special Care Center."

The report, blog post, and articles are available through the links below.