LAKEWOOD, Colo.—Five health insurers, four self-insured employers and 17 Colorado medical practices have embarked on twin pilot programs that seek to transform the way primary care physicians practice medicine and encourage more medical school graduates to pursue careers in primary care.

The first pilot, a two-year initiative, provides incentive payments to medical practices serving as “medical homes” for some 25,000 Colorado residents.

The second pilot will integrate the patient-centered medical home concept into the curriculum of nine family medicine residency programs in Colorado in the next three years. The objective is to persuade recent medical school graduates to pursue careers in primary care, where there is a shortage, said Julie Schilz, manager of improving performance in practice at the Colorado Clinical Guidelines Collaborative, a Lakewood-based coalition of payers, providers and government agencies leading both programs.

In the patient-centered medical home health management model, each patient has an ongoing relationship with a primary care physician who is a personal “health coach” and leads a team that delivers medical care.

While most of the roughly 20 other medical home pilots under way provide payments to doctors for chronically ill patients, this program pays incentives for all patients in the participating health plans regardless of their health status, said Jim Adams, executive director of the Center for Healthcare Management at IBM Corp., one of the employers involved in the project.

“We are trying to get physicians to transform the way they practice. We didn't feel that would happen if they only focused on those with costly and chronic conditions,” he said. “It needed to be an all-or-none proposition.”

Participating health plans pay the physician practices between $4 and $8 per member per month. Practices can receive more by achieving higher levels in the medical home recognition program set up by the National Committee for Quality Assurance, Ms. Schilz said.

In addition to their insured population, the health plans are making payments on behalf of participating self-funded employers whose plans they administer: IBM, Centura Hospital Systems, McKesson Corp. and the state of Colorado. Participating insurers are Aetna Inc., Anthem Blue Cross and Blue Shield, CIGNA Corp., Humana Inc. and UnitedHealthcare Group Inc.

Payments also are made to practices treating Medicaid patients and members of Cover Colorado, the state's high-risk insurance program, Ms. Schilz said. Funding for the payments and other aspects of the programs, such as developing electronic medical records and registries tracking care of chronically ill patients, is from a $1.4 million grant from the Colorado Trust and a $2.8 million grant from the Colorado Health Foundation.

Andrew Webber, president of the National Business Coalition on Health in Washington, praised Colorado's efforts. “We've got to get primary care to focus on keeping the people who are healthy, healthy,” he said.

Donna Marshall, executive director of the Denver-based Colorado Business Group on Health, said the employer members “think it's important to consider ways to shore up primary care practices in this country.” However, she stopped short of embracing the total population approach. “We are hoping these pilots will focus on improving outcomes for chronically ill and at-risk patients who currently are poorly managed by the health care system,” she said.

As for encouraging more doctors to choose primary care, Mr. Webber said, “We've got to change the incentives to the young person going into medical school who thinks that primary care is an attractive specialty, and that they'll receive adequate compensation.”