New Report Highlights Savings Achieved by Medical Homes

February 09, 2015 05:48 pm Michael Laff Washington, D.C. –

Rahul Rajkumar, M.D., J.D., received a call one Friday evening from a family member who said she was taking medication for a urinary tract infection and had a fever of 103 degrees.

Patient-Centered Primary Care Collaborative CEO Marci Nielsen, Ph.D., M.P.H., discusses a recent report on medical homes during a forum in Washington, D.C.

Rajkumar, a primary care physician and acting deputy director at CMS' Center for Medicare and Medicaid Innovation, initially considered telling her to go to the ER, given the time. Then he discovered that her primary care physician in southwest Ohio was participating in the Comprehensive Primary Care initiative.

"I said, 'Why don't you call your doctor and see what happens?'" Rajkumar recalled.

The patient called her physician's office and was transferred to a triage nurse who discussed her condition and told her someone would call back within 30 minutes. A nurse care manager called back soon afterward. From her home, the care manager reviewed the electronic health record . She advised the patient to switch her medication from Cipro to Bactrum and to drink Gatorade overnight.

The medication change proved effective, and the entire exchange was conducted entirely by telephone, said Rajkumar. Notably, he added, "A trip to the emergency room was averted."

Story highlights
  • A new report details cost savings and utilization rates of medical home initiatives in several states.
  • The number of patients who are part of a medical home initiative increased exponentially during the four-year period studied.
  • The report calls for increased spending on primary care and a restructuring of payments to support enhanced primary care efforts, including coordinated care.

Speaking during a recent forum hosted by the Patient-Centered Primary Care Collaborative (PCPCC) to discuss its new report, The Patient-Centered Medical Home's Impact on Cost and Quality(, Rajkumar said the experience highlights the potential of patient-centered medical homes (PCMHs). In this setting, a patient can receive a consultation after normal office hours, medical professionals have easy access to electronic records and decisions about care can be made without a hospital visit.

"It's an extraordinary time in health care transformation," Rajkumar said. "Not only is primary care at the center of the medical home model, it's a winning strategy in any transformation effort."

Impact Overview

Between 2009 and 2013, PCMHs supported by payment incentives had increased in number (from 26 to 114), patients served (5 million to 21 million), and number of states embracing medical home transformation (18 to 44), according to the PCPCC report, which reviewed PCMH initiatives in several states. In all, the report combined findings from seven state reports, seven insurance reports and 14 peer-reviewed studies.

Chris Koller, president of the Milbank Memorial Fund, said one of the barriers to wider adoption of medical homes is the number of insurers in a given market. The Milbank fund supports initiatives that join multiple insurers such as Medicaid, public employees and private insurance companies. Seventeen states now have a multi-payer medical home program.

When medical homes and new payment models are being introduced, it can be difficult to convince insurance companies of their value, Koller explained. Despite the resistance, he emphasized that it constitutes a relatively small investment for insurers to increase spending on primary care.

"It's kind of like Kabuki theater," Koller said. "(Primary care) physicians say, 'We're doing the Lord's work so give us the money.' The plans say, 'Show us the savings.' Then physicians say, 'You don't ask that of emergency room doctors when they order all of those tests.'"

Three elements are essential for the medical home to be effective, said Rajkumar.

  • The physician should receive incentives such as shared savings in the second or third year of the initiative.
  • The care team needs training to handle multiple tasks to preserve the physician's time.
  • All participating institutions need access to patient information at a specified point.

Typically, studies have shown, evaluations of medical homes put too much emphasis on costs savings, often ahead of other important considerations such as access to care.

"You are most likely to see changes in utilization rates first before you see changes in cost," said PCPCC CEO Marci Nielsen, Ph.D., M.P.H.

Keys to Success

Each initiative that researchers studied was measured based on savings in cost and utilization, preventive health service offerings, primary care access and patient satisfaction.

Oregon has been one of the early success stories in terms of expanded access and increase in primary care received. The Oregon Coordinated Care Organizations reported a 19 percent reduction in emergency department spending and a 17 percent reduction in emergency room visits during 2013.

One Oklahoma initiative, the Sooner Care Choice Program, reported that it avoided 61,000 ER visits from 2009 to 2013, for a cost savings of $21 million. More than 90 percent of children and adolescents in the plan had access to a primary care physician in 20013.

However, some medical home initiatives that have been evaluated by research journals, such as the Department of Veterans Affairs Patient Aligned Care Team program and the Pennsylvania Chronic Care Initiative, were found not to have achieved savings.

"Despite early and sometimes mixed findings, the evidence here suggests that trends continue to be positive for practices that are able to fully implement the PCMH model of care," the report's authors wrote. "As highlighted previously, the longer a PCMH practice has implemented the model, the more impressive the results."

The report calls for increased spending on primary care and a restructuring of payments to support enhanced primary care efforts, including coordinated care.

"Out of all the dollars we spend on health care, only 4 to 7 percent is spent on primary care, and yet 55 percent of all visits are to primary care," Nielsen said. "Something is out of kilter here."