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In searching for ways to curb costs and improve care, some insurance companies are taking a page out of their own history books - running their own doctors' offices and clinics. This approach had mixed results the first time around, but insurance companies are now hoping more emphasis on primary care will be good for their patients and also their bottom line. Here's Tracey Samuelson from NPR's Planet Money team.
TRACEY SAMUELSON, BYLINE: Dr. Michael Byrne spent eight years working in a Brooklyn hospital. And he saw firsthand why the United States spends more on healthcare than pretty much any other country in the world.
DR. MICHAEL BYRNE: I would regularly see patients who were admitted to the hospital, I took care of, got better, and then we'd discharge them with a plan of care. And they would come back either to the ER sick or to the floor. It's a common occurrence.
SAMUELSON: Maybe they wouldn't fill their prescriptions or take their medications. They'd miss appointments for follow-up tests or doctors' visits.
BYRNE: And if you look at re-admission rates in Brooklyn, they're 25 percent. So 25 percent of patients that we discharge are back in the hospital within a month.
SAMUELSON: This was obviously a problem for his patients, because they were sick and not getting any better, but it was also problem for insurance companies because hospital stays are really expensive. But a company called CareMore has figured out a way to cut readmission rates for its Medicare patients to about half the national average.
They've been doing it out west since the 1990s. Last summer, they were acquired by WellPoint, one of the largest health insurance companies in the country, and so now they're going national - adding 13 new clinics to their existing 30 by the end of the year.
UNIDENTIFIED WOMAN: I want to welcome you to our CareMore Center, our grand opening here today.
SAMUELSON: One of those news clinics is tucked in a strip-mall in Brooklyn. If you're on Medicare, and choose to have a WellPoint affiliate administer your benefits, you can use this center for free. You still see your regular primary care doctor, but a lot of routine medical procedures can be done here cheaper.
Plus extras, like they'll come to your house and install a scale that automatically sends your weight to the clinic. They'll design a workout for you that you can do in the clinic gym. They'll even cut your toenails to avoid foot infections.
Brooklyn Dr. Michael Byrne left his old job at the hospital and now works in this clinic. He says one advantage is being able to follow patients to the hospital or a nursing home if they need care there. Plus...
BYRNE: I'm going to have more time per patient. I can spend, you know, 45 minutes with a patient versus 15.
SAMUELSON: WellPoint is far from alone in thinking more emphasis on primary care might save them money on costly diseases in the long run. Chris Rigg is analyst who covers the healthcare industry for Susquehanna Financial Group.
CHRIS RIGG: In recent years, you know, it's been across the board. You know, certainly all of, you know, the large publicly traded insurers, so Aetna, Cigna, Humana, United, and WellPoint, they're all pursuing slightly different, but generally similar strategies.
SAMUELSON: And this is largely due to new cost pressures on insurance companies coming out of healthcare reform or the Affordable Care Act.
RIGG: We've seen an acceleration in the last two to three years of what's generally described as vertical integration, where the managed care guys are either buying doctor groups, primary care clinics, or some relationship.
SAMUELSON: It's basically the original idea behind the HMO. Anthony Schlaff, a professor of public health and community medicine at Tufts University, says it can work, that Kaiser Permanente, for example, has been doing this for decades and is generally well regarded with its customers. But many other insurers abandoned this model.
ANTHONY SCHLAFF: Where it doesn't work is when there aren't protections against skimping on care. If the insurer and the provider are one and the same organization, then how does the public have the assurance that the company isn't staying in business by collecting money and then not giving the care it should be giving.
SAMUELSON: HMOs became unpopular in the '90s because people thought they tried to cut costs by limiting care. CareMore patient David Benavides says his diabetes is much better controlled since he signed up for the plan about five years ago. He visits the clinic often for check-ups and blood work.
DAVID BENAVIDES: Actually, I go like once a month. I feel better and better, like I got the power to do what I want to do.
SAMUELSON: Which is mostly fixing up old cars in a shop behind his house. He says being healthy has been like being upgraded from a six-cylinder engine to a V8. And for CareMore, keeping him in his shop and out of the hospital, that's just good business. Tracey Samuelson, NPR News.
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