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Mel Evans, Associated Press
Sen. Robert Menendez, D-N.J., makes a small circle as he says Tuesday, March 22, 2011, at Northgate II in Camden, N.J., that in Washington he plans to make a good health care law even better by closing the "˜donut hole"™ to make prescription drugs more affordable for seniors. Menendez spoke at the announcement that a new clinic is opening in the public housing building that's been found to be a hot spot for medical problems. The clinic is part of an innovative effort to find the individuals whose health problems ring up the biggest emergency room bills and get them intensive help to improve their health.

CAMDEN, N.J. — Camden, a city known for its crime and poverty, is developing a reputation for something positive: an innovative effort to cut health care costs.

An official from President Barack Obama's administration and two members of Congress were among the dignitaries who came to the city Tuesday to celebrate something simple — the opening of a nurse practitioner's office in a building with more than 300 apartments for the elderly and the disabled. The office is the latest step in a citywide effort to cut health care costs.

"Today, we have the opportunity to end a message to the rest of the nation that Camden is leading the way," said U.S. Sen. Robert Menendez, a Democrat from New Jersey.

Officials also used Tuesday's event as a chance to praise Obama's health insurance overhaul on its first anniversary. Opponents have heavily criticized the law, and Congressional Republicans are calling for its appeal.

But proponents of the law say it will make possible more community efforts like the one in Camden.

About nine years ago, some health care providers started collecting data on patients in Camden, a city that consistently ranks as one of the nation's poorest.

They eventually got all three hospitals in the city to contribute detailed information, which was used to pinpoint which neighborhoods and even individuals were responsible for the highest medical costs.

The research confirmed what many believed about the health care system: It's badly fragmented and inefficient. And in a place like Camden, patients with no other choices go to emergency rooms for maladies that could be better treated elsewhere.

From January 2002 to June 2008, half the city's residents made annual trips to the emergency room. And the most frequent diagnoses there were head colds, followed by viral infections, sore throats and other relatively minor problems.

What's more, it was a relatively small group of patients who were responsible for many of the costs. Patients from just 6 percent of the city's blocks accounted for 27 percent of emergency room visits and 37 percent of emergency room costs.

The Camden Coalition of Healthcare Providers has responded by offering intensive preventative care for the most costly patients. There have been clinics on living with diabetes, and care providers have put residents on diets — and kept up with them. Even a homeless encampment has gotten attention from the doctors and nurses in the group.

The Northgate II building that now houses the nurse practitioner's office is one of the medical cost hotspots, the research found. The researchers spent time learning about the health issues and health care grievances of the residents before recruiting a private company to provide a nurse practitioner, who can be reimbursed at a higher rate under the federal insurance overhaul.

Pilar Perry, who has lived in Northgate II for 18 years, said having medical care in the building will immediately improve the lives of its residents.

"We won't have to wait for hours for the ambulance and hours for the emergency room for ailments like the flu."

And, officials hope, that care will keep patients out of the emergency rooms.

Rick Gilfillan, director of the Center of Innovation in the federal Center of Medicare and Medicaid, said Tuesday that the nation is watching to see whether the Camden initiative controls costs and improves care.

"It became obvious that it was the right thing to do," he said. "The remarkable thing was that nobody had done it before."