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Geisinger Patient-Centered Medical Home Cuts Care Costs by 9%

The patient-centered medical home is a promising model for cost-cutting among commercially ensured patients in the Geisinger Health System.

By Jennifer Bresnick

- The debate over the true value of the patient-centered medical home (PCMH) continues with a new study by Geisinger Health System, which indicates that the comprehensive care framework may be able to reduce the total costs of patient care by nearly ten percent over six years of operations.

Patient-centered medical home and cost savings

The study, published in the journal Risk Management and Healthcare Policy, suggests that the patient-centered medical home may be able to provide benefits to non-elderly, commercially insured patients – a group that is not typically on the top of the list for intensive population health management programs.

“PCMH is a significant departure from the current standard care delivery model in the US, which relies on a ‘fragmented’ care delivery system that lacks a systematic infrastructure to comprehensively coordinate care across disparate specialty care providers and care settings,” explain Daniel Dukjae Maeng, Joann Sciandra, and Janet Tomcavage, three researchers from the Geisinger Health System in Pennsylvania.

While there is a growing body of evidence that coordinated population health management strategies such as the PCMH may be able to significantly reduce unnecessary service utilization, improve outcomes, and raise patient satisfaction, other research has argued that the set-up and maintenance costs of such a system may be prohibitive for many organizations.

Although the researchers caution that Geisinger’s positive experience with the PCMH framework may be unique to the deeply integrated and data-driven health system, the long-term study does take a favorable view of the cost-cutting potential of this innovative delivery strategy.

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Like many population health management programs, Geisinger’s PCMH journey started in 2006 with elderly Medicare Advantage beneficiaries, since these patients often experience a high burden of chronic diseases and require more extensive services than other groups.

After experiencing success in the Medicare sphere, the health system expanded its PCMH efforts to other segments of its patient base.  Since 2008, Geisinger has been using PCMH principles in its ProvenHealth Navigator (PHN) program for commercially insured patients.

The PHN initiative focuses on five key components of coordinated care:

Developing patient-centered care teams that are led by providers but allow all members of the team to function at the top of their skill sets

Managing populations with the help of the electronic health record and data analytics that provide risk stratification, clinical decision support, and automated interventions triggered by recognized gaps in care

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Creating a comprehensive “medical neighborhood” that integrates primary care with hospitals, nursing homes, pharmacies, home health agencies, and other members of the care continuum  

Measuring and managing performance and satisfaction by monitoring cost and utilization, meeting quality goals, and addressing unnecessary variations in care

Bridging the gap between fee-for-service and value-based care by embracing innovative payment models to foster accountability for spending and service choices

By 2013, Geisinger had implemented its PHN strategy for commercially insured patients in all of its 95 primary care sites.  Sixty percent of the care sites transitioned in either 2012 or 2013.  The study notes that the staggered roll-out produces variation in the length of PCMH experience for the different offices, which may also affect their results.

Using administrative claims data to analyze more than 75,000 patients over the course of the transition period, the researchers compared six months of benchmark expenditures at the start of the implementation period to spending trends through the end of 2013.

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The PCMH sites achieved significant reductions in both overall cost of care and outpatient spending.  The health system saw a reduction in total care costs of approximately 9 percent, and a reduction in outpatient costs of around 12 percent, or $13 per member per month. 

Savings from Geisinger’s PCMH implementation on the Medicare side, however, come mainly from lowering the use of inpatient services, the authors added.  This “may be representative of differences in disease burden and time to impact,” they wrote.

The study also showed that care sites with longer experience as a PCMH tended to achieve greater savings than provider locations that were just starting to implement the patient-centered care framework. 

This finding is similar to other studies that indicate it may take several years for providers to adjust to the new workflows and techniques before they achieve a financial return on their investment.

“The latest research demonstrates that the PCMH – or comprehensive primary care – can control costs and promote the right care,” said Marci Nielsen, PhD, MPH, CEO of the Patient-Centered Primary Care Collaborative.  The organization releases an annual report on the achievements of PCMHs across the country. “The medical homes that have been around the longest showed the most improvement.”

While the long-term commitment to care transformation may seem like a daunting, time-consuming, and expensive process for many healthcare organizations, PCMHs that successfully navigate the transition do seem to achieve measurable savings and better outcomes for their patients.

The authors of the Geisinger study were quick to stress that the findings from their research may not be generalizable to other organizations, due to the nature of the health system, its in-house insurance plan, and the patients enrolled in the study. 

However, they do affirm that “this study provides another piece of evidence supporting the hypothesis that PCMH can lead to lower cost of care.” 

“While none of the individual studies can alone provide conclusive proof of the efficacy of PCMH, the growing body of literature is useful in understanding how best to implement PCMH in different contexts and how to evaluate it.”


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