Unless we better address implementation, change management and workforce readiness issues, my fear is that is a risk that medical homes will fall into the category of “great idea, lousy execution.” We need good models, but good models are not enough–models must be scaled and applied. Fortunately, we have research and best practices from many other industries to guide us.

Can you please share your math…that seems to be a sticking point. I think Brown of Mathematica did very good job in explaining their math and rationale.

You make assumption that “if a MH practice can prevent 15 hospitalizations” — this is a BIG assumption.

Finally, MMHD is not comparable to medical home demos to date by states and health plans. MMHD care coordination fees are much larger — blended average of about $50 per patient per month for Tier 2 medical home.

This is very generous compared to typical health plan/state range of $3-8 PPPM.

…which is exactly why MMHD is in trouble — generosity of care coordination fee makes financial return not feasible.

V

What CMS has said is that the scope of eligibility and the pbpm rate setting ultimately delivers a pot of money to a practice which it can use within the broad structure of the MH to improve care and reduce costs. It would not change the total upfront cost target that a practice would have to beat if eligibility were to be halved and the payment were doubled.

The way we have calculated it, if a MH practice can prevent 15 hospitalizations, most likely by focusing on the 20% of patients at the most risk, it can save the pbpm upfront.

Now, an unanswered question is on the measures OTHER than cost that might be assessed on the full 86% of beneficiaries “participating” in the MH will there be a problem? Will the expectations of those full 86% be so high that practices inevitably miss allocate resources on the care of low risk people with relatively little to gain in costs or quality?

Tiering the level of intensity of MH services, managing expectations, communicating about population level outcomes to individual people – these will be challenges, but not insurmountable ones.

I have been and continue to be a BIG supporter of the medical home and of the need to revive primary care.

As currently structured, the MMHD will not help the cause of advancing the medical home. That’s the elephant in the room that we need to acknowledge and address.

V

Results: After adjustment for baseline characteristics, Guided Care patients experienced, on average, 24% fewer hospital days , 37% fewer skilled nursing facility days 15% fewer emergency department visits, and 29% fewer home healthcare episodes Based on current Medicare payment rates and GC costs, these differences in utilization represent an annual net savings of $1364 per patient. .

Conclusions: Initial introduction of GC into primary care practices may be associated with less use of expensive health services and a net savings in healthcare costs among older patients with several chronic health conditions. Final results from the remaining 2 years of this ongoing study will be published in 2011.

Here is the current issue of Managed Care with the full report.

http://www.ajmc.com/issue/managed-care/2009/2009-08-vol15-n8/AJMC_09aug_Leff_555to559

Paul Grundy, MD, MPH
Director, Healthcare Transformation IBM
President, Patient-Centered Primary Care Collaborative

But the pilots show some of the early evidenced of what we have been seeing in Denmark now 10 years down the road. A move from 155 acute care hospitals down to 25. Better up stream care lower downstream cost is the Danish experience. Some of the PCMH pilots in the USA are publish already Health Affairs Sept 2008, some come up Managed Care next month and NEJM in the next few months. This is very early data I was impressed that in NC for example they saw a decrease in hospital care for asthmatics of 13%. In PA a decrease of 20% in hospitalization do to better care coordination. Again the early kind of data we saw in Denmark when we did this there.

Here is the conversation at the White House — http://www.youtube.com/watch?v=A13HvRWNTJQ

Paul Grundy, MD, MPH
Director, Healthcare Transformation IBM
President, Patient-Centered Primary Care Collaborative

First, I am and continue to be a big supporter of the Medical Home model and primary care. The spirit of my post is not to knock the Medical Home model, but to point out the elephant in the room with the Medicare demo and to get us talking about it.

Second, you’re spot on in raising the issue of indirect cost savings around the medical home, and the GHC example is relevant and shows the magnitude.

Third, however, your example of GHC would apply to integrated delivery systems, but not to most health care environments in the U.S. From the standpoint of Medicare and most health plans, the savings of indirect costs is an externality — the benefit does not accrue to Medicare and the plan.

Fourth, I agree with your point that the medical home should be primarily about saving primary care. My take here is the the doctors have unnecessariliy painted themselves into a corner by also taking on the question of cost savings around the PCMH. These really are two separate issues, and probably the subject of an entirely separate blog post.

V

Interesting topic. I recently had the opportunity to interview Dr. Trescott, Dir. of Medical Director of Primary Care at Group Health in Seattle regarding their “primary care re-design” pilot at their Factoria clinic. I learned a couple of things that bear consideration relative to your discussion regarding “medical homes.”

When I asked Dr. Trescott her biggest “ah ha” from the pilot, she responded that it was the annualized $2 million dollars in savings projected just from a reduction in staff turn-over (physician and non-physician). It costs $225,000 just to recruit 1 physician. The reason? Physicians and staff were so excited about the quality and style of practice at Factoria that Group Health has a waiting list of primary care physicians who wanted to practice the same kind of medicine. Where are these cost savings factored into Mercer’s or Mathematica’s reports?

According to Dr. Trescott, with the introduction of pre-visit planning, e.g., using medical assistants to call patients before their visit, Factoria saw an increase in patient visits among patients that historically did not visit their Group Health doctor. In other words patients were being meaningfully “activated” to do something positive regarding their health. Imagine all the pre-diabetics and pre-hypertensive patients (future risks) that are being identified with the goal of preventing disease progression. What is the cost savings associated with active and real disease prevention?

Finally there is the issue of patient participation. As I understand it, participation in most health plan sponsored disease management programs is 15% to 30% of eligible members, e.g., members at risk. In a primary care practice better equipped to mange a population’s health using patient registries and EMRs, disease management becomes health management and one could reasonably expect to see the 100% of diabetics, asthmatics, etc. being managed by their physician – no opt-in or out-out required. Using my simple logic, doesn’t this mean that the number of “patients needed to be treated” in order to achieve savings (associated with significant cost drivers) will be more likely to occur in practices across the US resulting in more saving?

My point is that the primary care re-design and medical home initiatives is about much more than disease management. Saving Family Medicine is just one of the goals. Any cost or savings analysis of primary care-redesign and medical home will seemingly require a new set of metrics that more accurately represents the range of cost savings and health promotion that places like Group Health and others are claiming to achieve. This isn’t just about disease management anymore.