Healthcare Analytics, Population Health Management, Healthcare Big Data

Population Health News

Can the Patient-Centered Medical Home Help Achieve Savings?

By Jennifer Bresnick

- In order for a primary care provider to attain recognition as a patient-centered medical home (PCMH), it has to undergo a number of significant changes to its workflows and processes, including expanding office hours, leveraging health IT improve care coordination, and developing more sustained contact with patients.

While these efforts are widely recognized as successful ways to raise the level of care quality, the truth is that they aren’t always cheap to get into gear.  Software and hardware purchases, additional staff hires, and even keeping the lights on for an extra few hours a week all have their built-in costs, and some providers worry that the investment won’t be worth the return.

However, the patient-centered medical home has a growing body of evidence-based research to back up the idea that improving care quality at the primary care level can have measurable positive impacts on healthcare spending that benefit multiple points on the care continuum.

In this installment of’s practice transformation series, Marci Nielsen, PhD, MPH, CEO of the Patient-Centered Primary Care Collaborative (PCPCC) helps us examine why it might be worth it to take the leap into the patient-centered medical home model as a way to trim costs from the healthcare system at large – and how primary care providers can accrue some of those savings for themselves.

Emergency department utilization is one of the first things to decrease when primary care gets more comprehensive, and it’s as simple as keeping the doors open longer.  “It is most common when you start to implement pieces of the PCMH that you start to improve care coordination and access to care for patients,” Nielsen said.  “So you’re putting weekend hours and evening hours into your schedule, and accordingly, you’ve got fewer people going into the emergency room.  So we see those metrics change fairly quickly.”

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One study, published in the Annals of Emergency Medicine, found a significantly slower growth rate in ED visits among Medicare patients who received care in a PCMH setting with savings of more than $50 per patient after just one year as a patient-centered medical home.

And according to a study of studies conducted by the PCPCC in February, the PCMH is associated with significant reductions in ED use almost across the board.  In the Patient Aligned Care Team (PACT) initiative, the VA’s equivalent of the PCMH, patients experienced a 46 percent lower ED utilization rate when they partook in “continuity visits” with their PCP.  Chronic disease patients at New York-Presbyterian Regional Health Collaborative were nearly 30 percent less likely to visit the ED and 36 percent less likely to experience a 30-day hospital readmission.

“We also see changes on the care coordination front,” Nielsen adds. “One of the first things patient-centered medical homes often do is bring a care coordination professional on board, whether that person is a social worker or a medical assistant.  That care coordinator is helping patients find the right person at the right time for their care needs.  That, too, leads to utilization changes that ultimately impact costs.”

Dedicated care coordinators are important members of the PCMH team, centralizing the administrative burden of conducting patient outreach and education that improves chronic disease management, ensures adherence to medications and preventative care routines, and forestalls confusion over navigating the care continuum.  This is especially important for the growing number of patients with one or more chronic diseases, and for the elderly who often need extra help making treatment decisions when facing a health crisis.

But providers may rightly question how a quieter emergency room at a local hospital, a booked up calendar for a specialist, or an extra salary paid to a care coordinator translates into savings for them.  Care coordinators may quickly pay for themselves, but primary care providers with finances balanced on a knife’s edge may not be capable of laying out thousands of dollars in the hopes that their efforts will produce results at some indeterminate point in the future.

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Doing all the work to produce downstream effects on healthcare spending doesn’t seem like a very attractive proposition for PCMH hopefuls, especially those that believe the model will help them steer through treacherous financial waters as the industry transitions to value-based reimbursement.  But it’s that very transition, now accelerating rapidly thanks to efforts from both private industry and federal rule makers, that is critical to achieving return on the investment of the PCMH and other care delivery improvement programs.

“The financial aspect has been an ongoing challenge,” Nielsen acknowledges. “We’ve got somewhere in the neighborhood of 15 to 20 percent of practices adopting this model because they know it’s good for patients, but the last 80 percent are still holding out for payment reform.  It’s not because they’re obstinate.  More often than not, they literally just can’t afford to make changes to their practice without some upfront funding.”

practicetransformThat’s the same problem that has plagued smaller providers attempting to participate in the EHR Incentive Programs, which have not aligned as neatly with other practice reforms as some could have hoped.  While Stage 2 meaningful use requires providers to begin thinking about population health management and improved patient engagement, those initiatives won’t really take off within the program until Stage 3, lifetimes away when viewed through the lens of software development and the investments needed to build healthcare analytics and health information exchange infrastructure to support population health.

“If you want population health management, you can’t do it within the confines of the EHR and meaningful use today,” Nielsen says.  “I do think that vendors have been, for many reasons, slow to embrace the changes that we need – those registry tools for example, risk stratification tools, and clinical decision support.”

“We need vendors to help us come up with creative ways to develop an EHR and the tools necessary for population health management all in one.  There’s nothing more frustrating to a provider who is spending all kinds of money on these products to discover that they may help achieve meaningful use, but they’re not going to help do what they really want to do for their patients in terms of delivering this model of care.”

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“The reason, by and large, is that if you’re still almost exclusively practicing in a fee-for-service world, practices really do need EHRs that link to billing,” she added.  “We hope that the vendor community will change quickly when they realize that providers are moving to value-based care arrangements, and documentation and billing that supports fee-for-service is headed out the door.”

Stage 3 meaningful use and the quality reporting reforms included in the pending fix to the sustainable growth rate (SGR) place a much larger emphasis on value-based arrangements that more directly and consistently reward primary care providers for their efforts and investment in patient-centered care.  The growing popularity of bundled payments and pre-determined care management fees bring incentive to primary care providers to implement the care coordination and preventive services promoted by the patient-centered medical home.  But bringing those savings down through the healthcare delivery system to the primary care level is a challenge that will remain for some time, Nielsen says.

“Just establishing accountable care organizations (ACOs) that may or may not be adequately sharing cost savings with primary care isn’t enough,” she said.  “We need to change the way we pay for care delivery at the practice level as well.  We’re not doing it enough yet.  We’re hopeful that our ability to demonstrate that the patient-centered medical home provides better care for real patients – and that it can also save money – will ensure that investing in primary care and sharing in savings with the PCP is the right thing to do.”

While numerous studies have touted the effectiveness of the PCMH model for vastly improving the quality of care as it reduces costs broadly, the quest to bring those savings more deeply into the primary care setting depends on the degree to which PCPs will embrace value-based payments and accountable care arrangements with private payers and with CMS.  Engaging with innovative payment models that reward the same activities the PCMH requires will help primary care providers make the most of both programs while ensuring that they are meeting the needs of patients requiring high quality, coordinated care.


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