Promoting the 'Medical Home' To Control Costs, Improve Care

By Kathryn Foxhall October 14, 2008

​The patient-centered medical home concept has leapt to the fore over the past two years as a health reform idea. And now a number of employers are thinking about the value of this approach and whether they should be involved in promoting it—and pressing their health insurers to provide it.

The term medical home is decades old and refers generally to the concept of the patient having a medical practice to relate to consistently. But the more recent push, generated in part by large employers, refers specifically to primary care providers doing much more oversight of patients’ health and coordinating their care with specialists and other care providers throughout the system. And, importantly, it includes paying those providers for that extra management work.

Significant resources are flowing into demonstrations from public and private payers, including Blue Cross/Blue Shield, local coalitions, Medicare and state Medicaid programs. The goal is to find out whether that active management can save money by keeping patients out of more expensive levels of care.

The Patient-Centered Primary Care Collaborative (PCPCC), a key group pushing for the medical home, was formed in 2006 when a number of employers approached primary care physician groups about creating a more effective health care model. PCPCC has over 220 member groups, including health care professional associations, payers, drug companies and employers such as IBM, Caterpillar, GE Energy, Microsoft and U.S. Steel.

PCPCC points particularly to the research of Barbara Starfield of Johns Hopkins University. She found that health care systems around the world that have more focus on primary care have lower costs and better outcomes.

Steve Raetzman, senior health care consultant with Watson Wyatt, says that “there is a sort of fortunate set of circumstances at the moment where providers—family practitioners, internal medicine doctors—are seeing that they would like to change the way they practice to be more oriented toward helping people with chronic conditions, more oriented toward being the coordinator of care for people. And they are looking for support from the insurance companies and their customers, employers, to support their efforts to transform their practices.”

What Is It?

In 1987, four primary care physician groups (the American Academy of Family Physicians, American Academy of Pediatrics, American College of Physicians and American Osteopathic Association) published “Joint Principles” that are foundational to the medical home concept, proposing that:

    • Each patient has a continuing relationship with a personal physician who leads a staff team that takes responsibility collectively for continuing care. The physician and team are responsible for providing for patient care needs and arranging care with other professionals.

    • Care is coordinated and integrated across the system, facilitated by registries, information technology, health information exchange and other means.

    • Physicians accept accountability for continuous quality improvement through voluntary engagement in performance measurement and improvement.

    • Patient access to information is enhanced through elements such as open scheduling, expanded hours and communication via secure e-mail.

The medical home is not a gatekeeper for the rest of the system, assert some experts on the model, but it should take responsibility for knowing about specialist visits, tests, results, medication adjustments, and hospital stays and discharges.

Physician Incentives

The principles call for several additional type payments to incentivize these changes. Payment, say the principles, should:

    • Reflect the value of the patient management work beyond the face-to-face visit, as well as coordination with consultants and others, information technology adoption for quality improvement, and remote monitoring using technology and other elements.

    • Allow physicians to share savings from reduced hospitalizations associated with the better patient management.

    • Allow for additional payments for quality improvements.

Despite those extra costs, the model should eventually save employers money, Raetzman asserts, noting that most large companies have programs to help people manage conditions like diabetes, asthma and vascular disease. But, he says, if those programs get 10 to 20 percent of the target groups to participate, that’s a fairly high success rate. The other employees are in the health care system on their own, and some of them don’t have a regular source of care. Their conditions can get out of control; then costs escalate and productivity declines. “All that due to the illness that could be managed if people had the best primary care that is available,” says Raetzman.

Measuring Up

In another key step to defining the concept, the National Committee for Quality Assurance, which accredits managed care organizations and others, published quality standards in 2008 to recognize best practices regarding patient-centered medical homes. The standards set three levels of achievement and give practices points for a host of factors such as:

    • Maintaining capacity to schedule visits the same day a patient calls.

    • Using electronic or paper-based systems to identify information such as the practice’s most frequently seen diagnoses and the most important risk factors in the patient population.

    • Using electronic systems to generate lists such as patients on a specific medication or patients needing reminders for medical care.

    • Physician or staff assessment of barriers when patients have not met treatment goals.

In June 2008, America’s Health Insurance Plans (AHIP) released its Principles on Patient-Centered Medical Home, saying that “while there is current market experimentation going on to determine the appropriate structure of the medical home,” it is collaborating with others to promote a model that focuses on, among other elements, patients’ needs and preferences, accountability, structuring payment to align with measurable improvements, and pilot testing before moving to payment reform or practice design.

Asked about concerns that the medical home might be another health maintenance organization (HMO) or gatekeeper model that the public will balk at, Raetzman says, “The medical home and improving primary care is a voluntary idea. It’s something that employees can choose. … It’s to have somebody who is educating and coaching you and serving as a gateway to health care that you need.

“The idea here is for your primary care physician really to be your advocate and your adviser and your coach, helping you manage all your health care conditions,” he asserts.

What Should Employers Do About It?

The PCPCC recently published a Purchasers Guide urging that even employers who are uncertain about the model should consider supporting pilots with a structured evaluation. For example, says the guide, employers might participate in a regional pilot; incorporate the model into other insurer procurement and assessment strategy; or integrate it into other corporate health strategies.

The purchaser guide lists 21 purchaser or multipayer-based medical home trials going forward around the country. Raetzman says that most large insurance companies are in the pilot stages of developing medical home and primary care programs. Employers, he says, should be asking to participate and to be updated on the status of those plans.

The guide suggests that employers could require that a percentage of in-network primary care sites be recognized by the NCQA as medical homes at one of the program’s three tiers. Or they might look at the number of primary care sites that have implemented components of the strategy, such as pharmaceutical care management or technology for tracking, communication and prescribing, it suggests.

Raetzman says elements of the medical home could be put in place prior to moving to the full model. “A lot of people say that they have a primary doctor but they don’t necessarily use the doctor in the same way that they could if the doctor offered extended hours, offered electronic medical records, offered better case management. … There is no reason why employers can’t start to see some benefits from improving primary care, even in the next 12 to 24 months,” he says.

However, he adds, “If we want physicians to provide additional coaching, additional education, if we want them to hire nurse educators and practitioners in their practices to help educate and manage populations with chronic conditions, then we are going to have to look at different ways of paying them. That is an important thing that could be done in the relative near term as well.”

“We are really at that point where the big insurance companies are trying to figure out if this is something they should be investing in and developing new products for,” Raetzman says. That’s why it’s important right now for employers to tell health insurers they want better primary care, and they will hold health plans accountable for producing it.

Employers must tell their insurers
they want better primary care
and will hold health plans accountable
for producing it

These kinds of plans are generally not on the market today for small employers, says Raetzman, but he advises them to keep their eyes open for products with better primary care services and better access.

A Solution, in Part

Theresa Perry, a benefits consultant and head of PinkSlip LLC, and a member of the Society for Human Resource Management (SHRM) Compensation and Benefits/Total Rewards Special Expertise Panel, believes that although the medical home is not a silver bullet for the broken health care system, it might be one of a variety of changes needed. "It has great potential for solving some of the deficiencies in coordinating patient care," she says.

“I am extremely excited that perhaps we are taking baby steps toward a total health care solution. I don’t see the light at the end of the tunnel, but I am very hopeful,” Perry adds.

Another possible benefit she sees in the medical home is changing the mindset of some employees so they use the medical home instead of the emergency room. When people establish a relationship with their doctors, and doctors have a closer relationship with one another, there will be more information sharing, she asserts.

But she agrees that it will require an upfront investment for physicians and that there must be incentives for them. She suggests that it might be good to test the model on people with chronic diseases.

Questions Remain

On the other hand, Michael Murphy, SPHR, another SHRM panel member and director of compensation and benefits for Shoe Carnival, feels positive about this model’s support of primary care but says there are questions employers should ask before jumping in.

Speaking for himself and not his employer, he asks how the medical home would overlay with the present use of medical provider networks, which have saved considerable money. How will it work with high-deductible health savings accounts? Would all the doctors to whom the medical home refers have to be in the medical network? When practitioners move in and out of various networks, what effect would that have on patients in the medical home?

Murphy asks whether having employees in long-term relationships with a medical home will tie the employer’s hands in negotiating prices with insurers each year, if changing insurers means employees must change doctors. If an employee wants to move from a medical home to another practice during the year, will the premiums be different, and would that affect the regulations which limit employers in allowing people to change plans during the year?

There remains much to work out about the payment to physicians for the management work and for extra access for patients, Murphy contends: “How do you reimburse for an e-mail? That could get a little tricky.”

He is doubtful that practices in small cities and rural areas can support a team approach that envisions a practice with nurse practitioners and other staff. And he is fearful, as are others, that these practices will have some characteristics of the gatekeeper model, which was not popular with patients.

Stay Informed

Raetzman suggests that joining the PCPCC is a way to follow the medical home progress. It is not necessary to be listed as a public member to join, according to the PCPCC web site.

In addition, according to the PCPCC Purchasers Guide, the NCQA will be revising the standards, with a public comment period in early 2009.

Kathryn Foxhall is a health care journalist based in the Washington, D.C., area.

Related SHRM Article:

Holding Health Care Accountable, HR Magazine, September 2013


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