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Population Health News

Patient-Centered Medical Home Reduces Cost, Raises Quality

By Jennifer Bresnick

- The patient-centered medical home (PCMH) is an effective way to reduce healthcare spending while raising quality indicators, says the Patient-Centered Primary Care Collaborative (PCPCC) in a new report.  The organization’s annual review of evidence of the impact of the PCMH shows that the model can produce widespread cost cutting, improvements in service utilization, higher patient satisfaction scores, and better access to care for patients in a number of independent studies.

“The evaluations of the PCMH described in the report underscore the growing evidence base that ties the medical home model of care to reductions in health care costs and improvements in quality,” said Christopher Koller, president of the Milbank Memorial Fund in a press release. “However, in order for the PCMH to be sustainable, we need greater investment in primary care and less reliance on the fee-for-service payment system.”

Of the 28 industry reports, government studies, and peer-reviewed articles included in the overview, 17 found that patient-centered primary care helped to control spending, while 24 acknowledged the PCMH’s impact on better utilization of primary care, inpatient, and emergency room services.  One hundred percent of peer-reviewed studies that reported on patient satisfaction noted that consumers were more satisfied with their care under the PCMH model, mirroring federal confidence that the team-based structure is worthy of significant financial investment.

In one peer-reviewed study published in Health Services Research in the summer of 2014, the PCMH model was responsible for a 4.9 percent reduction in total annual Medicare payment versus a control group, fewer ED visits, and a reduced rate of visits to surgical specialists.  At New York-Presbyterian Regional Health Collaborative, patient-centered care produced a short-term return on investment (ROI) of 11 percent, while cutting ED visits and hospitalizations for chronic disease patients by nearly a third.  When a chronically ill patient was admitted to the hospital, it was for an average stay that was 4.9 percent shorter than baseline.

The patient-centered medical home is also a crucial step for integrating care sites and providing a strong foundation for providers to take on financial risk as part of an accountable care organization (ACO), said Dr. Kavita Patel, Managing Director for Clinical Transformation and Delivery at Engelberg Center for Health Care Reform and a Fellow in Economic Studies at The Brookings Institution.

“ACOs offer another important opportunity for PCMHs to be meaningfully integrated into an advanced delivery model with a greater degree of financial and clinical risk for providers,” Patel writes in the report. “ACOs, to date, have largely been primary care centered with aligned financial incentives aimed at enhanced quality performance, improved care coordination and population health level interventions. PCMHs share these very tenets but often differ in the attribution and financial arrangements. The ACO model allows for primary care providers especially to transition to increased risk while still managing a plurality of patients that had been in fee-for-service models.”

As the healthcare industry accelerates its transition to value-based reimbursement and accountable care, the patient-centered medical home, now rooted in 44 states across the nation, is becoming an increasingly commonplace phenomena.

“Enhanced primary care in the form of the PCMH has the potential to change the quality and cost of health care in America,” said PCPCC CEO Marci Nielsen. “This report serves as a go-to resource to inform policymakers, providers, payers, and patients on the most recent evidence regarding the PCMH and its impact on the health care marketplace.”


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