NCPA - National Center for Policy Analysis


May 16, 2007

The day when doctors treated patients at home disappeared decades ago in most of America as house calls gave way to more cost-effective office visits.  But a small company that devised a way to charge for doctors' house calls could encourage a return to the practice -- not just as a service for the rich, but as the most economical way for Medicare and private insurers to care for their frailest patients, says the New York Times.

Care Level Management, a company based in Woodland Hills, Calif., that employs about 100 doctors in five states, offers medical service to 13,500 chronically ill patients.  It pairs each patient with a doctor who provides a cellphone number and urges the patient to call for a home checkup at the first sign of trouble:

  • Medicare and private insurers pick up Care Level's bill (the patient is usually charged a co-payment as well).
  • Care Level takes on the 2 percent to 5 percent of the insurers' patients who have amassed the highest medical bills.
  • Its average patient is age 76, battling 11 chronic conditions like diabetes, hypertension and congestive heart failure, and has been hospitalized often.

Care Level says that its house calls save insurers money by drastically reducing emergency room visits and hospitalizations.  In fact, it guarantees savings.

For example, in a three-year trial Care Level is conducting with the federal government's Centers for Medicare and Medicaid Services, Medicare pays Care Level a monthly case rate and a fee per visit to care for up to 25,000 patients in Texas, California and Florida.   But Care Level must return the money unless net costs for its patients are at least 5 percent lower than the costs for patients in a control group.  The company splits any saving above 5 percent with Medicare.

Source: Dee Gill, "Handling House Calls in a Managed-Care World," New York Times, May 16, 2007.

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