The Chinese government has found cause to worry out loud recently about the safety of China's $1 trillion holdings in U.S. government securities.

Prominent among Chinese concerns is our nation's 11-figure (i.e., tens of trillions of dollars) unfunded Medicare obligations and our economy's declining global competitiveness due to health-care costs that double those of other developed nations. The Chinese are worried about our long-term ability to afford the nation's health-care bills, and who can blame them?

The broad brush strokes of President Barack Obama's health-care reform program are clear: universal health coverage, modernizing the health-care system and promoting wellness and prevention.

But the success of his health-care agenda depends on restraining the runaway growth of health-care costs and, most of all, eliminating waste -- the 40 percent of all health-care spending that doesn't help patients or actually hurts them.

As part of an effort to control costs, the president's fiscal year 2010 budget emphasizes preventing recurrent and avoidable hospital admissions -- and for good reason. Hospital cost is the largest component (35 percent) of our national health-care bill.

Furthermore, those who suffer from serious chronic illnesses are the most frequently hospitalized, are at highest risk of repeated hospitalization and account for three-quarters of total health-care costs.

Fortunately, there are simple, effective ways of pursuing cost containment:

• Improving patients' health status.

• Helping them to participate fully at home and at work.

• Keeping them out of the hospital.

In fact, these priorities enable us to understand where and how costs can be removed and quality improved. But we need to know more about what works and what protects quality of care, while restraining cost. That's why regional demonstrations are so important.

With this in mind, a group of local foundations have joined forces. With support from the Jewish Healthcare Foundation, Fine Foundation and Staunton Farms Foundation, the Pittsburgh Regional Health Initiative has just launched Integrating Treatment in Primary Care (ITPC), a project with national implications for improving patient care and reducing unnecessary hospitalizations among those at highest risk.

The ITPC project is focused on a particularly important aspect of preventable hospitalizations. Readmission rates are highest among chronically ill patients who also suffer from depression and/or substance use problems. One-third of patients with chronic illnesses readmitted to area hospitals within 30 days of initial discharges also suffer from depression and/or alcohol and drug abuse issues. Four of five patients readmitted within 90 days of discharge are similarly afflicted.

Moreover, these behavioral problems cause longer hospitalizations, more frequent emergency room visits, increased use of medical services, and much higher health-care costs.

Southwestern Pennsylvania is a good target for a demonstration. The Pittsburgh area has the third-highest rate of hospitalization among Medicare beneficiaries with serious chronic illnesses. Among all age groups, local hospital charges attributable to preventable hospitalizations connected to chronic diseases total $4 billion.

Hospital readmissions can result from breakdowns in patient care -- during hospitalization, during the discharge process, after a patient leaves the hospital, or all of the above.

Such breakdowns, of course, are magnified if a patient is depressed and/or struggling with a substance use problem. In these cases, a patient is less likely to fill a prescription, take medications according to instructions, schedule follow-up visits with his/her doctor, and those propensities add up to more hospital readmissions.

There are, however, proven, pro-active steps that can avert such breakdowns: IMPACT (team care that doubles the effectiveness of depression treatment), SBIRT (screening, brief intervention, and referral to treatment -- for problem substance abuse), coordinated care management, pharmacist review of patient medications, and psychiatric consultations.

The ITPC project will train health-care professionals at five area community health centers with higher risk populations to integrate and standardize these best practices for treating depression, unhealthy alcohol and drug use, and chronic diseases.

Because uncertainties about provider reimbursement are a frequent obstacle to treating these conditions, a key element of the project will be educating practice staff to use payor billing codes that are appropriate to the expanded services, and assure that all covered services are reimbursed.

Nevertheless, not all interventions and services are reimbursed today by public and private payors, so unreimbursed services will be paid for as part of the demonstration project -- with the explicit purpose of making the case for permanent reimbursement policy changes.

Patients at the five "safety net" clinics will be screened routinely for depression and substance problems during the course of the 18-month demonstration.

Based on screening results, professional staff will follow the proven office-based therapies, and follow-up strategies outlined above, including coaching to help patients engage in self-management.

In the short run, these interventions will cost more money. But the theory is that standardizing -- and paying for -- specific, coordinated patient interventions in the primary care setting will improve affected patients' mental and physical health, and eliminate the need for thousands of hospital admissions and readmissions in western Pennsylvania. This is what must be tested and demonstrated.

The unique power of regional projects like ITPC resides in testing the feasibility of new concepts, including real-life effects on patients and providers, before the nation leaps to widespread policy change.

By supporting regional demonstrations, and creating policy changes only when such projects are successful, the federal government (especially Medicare) can move quickly on an effective, long-term cost containment strategy that improves patient outcomes (and assures China that U.S. Treasuries are still safe investments).