Pcmh what why and how

IBM Global Business Services

IBM Institute for Business Value

Healthcare and
Life Sciences
Patient-centered
medical home
What, why and how?

IBM Institute for Business Value
IBM Global Business Services, through the IBM Institute for Business
Value, develops fact-based strategic insights for senior executives around
critical public and private sector issues. This executive brief is based on
an in-depth study by the Institute’s research team. It is part of an ongoing
commitment by IBM Global Business Services to provide analysis and
viewpoints that help companies realize business value. You may contact
the authors or send an e-mail to iibv@us.ibm.com for more information.

Patient-centered medical home
What, why and how?
By Jim Adams, Paul Grundy, MD, Martin S. Kohn, MD and Edgar L. Mounib

The patient-centered medical home (PCMH) can serve as a foundation
for transformation of the U.S. healthcare system – if appropriately
conceived and properly implemented. But it can also suffer from unfettered
expectations. This study makes the realistic case for why and how
stakeholders can participate in PCMH initiatives, identifies critical issues
and makes recommendations for best practices to increase the likelihood
of initial success and sustainability.
Replacing poorly coordinated, acute-focused, A set of principles guide the development
episodic care with coordinated, proactive, and implementation of the medical home. At
preventive, acute, chronic, long-term and the core of the medical home is the patient’s
end-of-life care is foundational to the trans- active, personal, comprehensive, long-term
formation of the U.S. healthcare system. relationship with a PCP This PCP is often a
.
Many believe this can be best accomplished physician specializing in primary care, but
by strengthening primary care and having also could be a physician specialist for the
primary care provider-led (PCP) care delivery dominant condition affecting the patient or, in
teams working at the “top of their licenses” jurisdictions where they are allowed to practice
– at the level for which they are qualified independently, a nurse practitioner. Another key
and licensed. One approach to transforming principle of the PCMH is the team approach
primary care is the patient-centered medical to care. Quality and safety, combined with
home (PCMH), or the “medical home” – an care coordination, whole-person orientation
enhanced primary-care model that provides and appropriate reimbursement, represent
comprehensive and timely care with additional principles of the PCMH. Further,
appropriate reimbursement, emphasizing the patients benefit from enhanced access such
central role of teamwork and engagement by as more flexible scheduling and communi-
those receiving care. cation channels.

1 Patient-centered medical home

While medical homes can be a cornerstone A significant transformation of the U.S.
of transformation, they are not a “silver bullet.” healthcare system appears imminent,
They hold a great deal of promise, but many including investments in prevention – which
more supportive measures need to be should be a basis of primary care and the
undertaken to fully realize the benefits. For PCMH. Medical homes can be created now
example, steps needed for full implementation as part of this transformation. Early medical
include improved access to patient information home pilots have demonstrated success in
and clinical knowledge to improve prevention, key areas such as improved quality, greater
diagnosis and treatment; changes on the patient compliance and more effective use
part of other stakeholders (consumers, other of healthcare services. Plus, interest and
physicians, hospitals, health plans, employers, support are growing for the medical home
governments and such life sciences as model across the healthcare and life sciences
pharmaceuticals); and a robust infrastructure landscape. From a financial perspective,
to support comprehensive, coordinated care. incentives are in place to help PCPs transform
their practices.
Benefits, however, may come at a cost.
All stakeholders face possibly difficult Medical homes hold great promise – and
changes and might have to make significant many initiatives are currently in progress. Even
compromises. Even so, the alternatives could so, attempts with even the purest motives can
be even less desirable. Status quo is not fail because of unrealistic expectations, poor
an option, so stakeholders should actively planning or poor implementations. Fortunately,
participate in collaboratively shaping a more best practices are emerging that help to deal
affordable, sustainable, high-valued healthcare with these issues. Appropriately applying these
system. practices can help increase the likelihood of
success for an initial rollout and a sustainable
model. To help frame discussions and provide
guidance in utilizing current best practices
when implementing a medical home, we offer
observations and recommendations to guide
current and future initiatives.

22 IBM Global Business Services
IBM Global Business Services

Patient-centered medical home
What, why and how?

The current emphasis Cost, quality and access issues take to easily incorporate existing evidence into
in U.S. healthcare is toll on U.S. healthcare system practice (for example, electronic health records
The United States is struggling to address with robust decision support capabilities). The
on reactive care, not
increasing costs, poor or inconsistent quality challenges entailed in resolving these issues
prevention, wellness or 1 are daunting. Many believe success will be
and inaccessibility to timely care. Healthcare
coordination of chronic expenditures per capita are 2.4 times higher fully achieved only through a fundamental
6
conditions. than that of other developed countries and transformation of healthcare. This transfor-
are projected to increase 67 percent over
.9 mation will require that high-value, affordable
2
the next ten years. Access concerns, such health promotion and healthcare be delivered
as the 45.7 million uninsured U.S citizens (15.3 comprehensively to, and collaboratively with,
percent of total population) are taking a toll activated consumers through new delivery
7
3
on the healthcare system. Moreover, these models.
challenges are exacerbated by forces that
Key to this transformation is strengthening
are challenging the status quo: globalization,
the primary care system by replacing poorly
consumerism, changing demographics and
coordinated episodic care with a PCP-led
lifestyles, diseases that are more expensive
care delivery team working at the “top of
to treat (for example, the rising incidence
their licenses” and providing coordinated
of chronic disease) and the proliferation
engagement of individuals in their preventive,
of medical technologies and treatments.
4 acute, chronic, long-term and end-of-life care.
The current state is unsustainable. As U.S.
There is ample evidence demonstrating the
President Barack Obama stated, “…the cost
importance of primary care. Residents in U.S.
of our healthcare has weighed down our
states with higher ratios of PCPs report better
economy and the conscience of our nation
health and better outcomes. For example, they
long enough. So let there be no doubt:
experience decreased mortality from cancer,
healthcare reform cannot wait, it must not wait,
5 heart disease and stroke than persons in
and it will not wait another year.”
states with lower PCP ratios. Increasing the
U.S. healthcare is geared to treating and number of PCPs is also associated with a
rewarding acute, episodic interventions. As a longer life expectancy and fewer premature
8
result, the emphasis is on reactive care, not deaths.
on prevention and wellness or care coordi-
Although a majority of patients prefer to seek
nation for chronic conditions or serious acute
their initial care from a PCP rather than a
conditions. Poor communication exists among
specialist, there is growing dissatisfaction with
providers, as well as inadequate activation of
the healthcare system, access to primary
individuals in ownership for their own health
care and the quality of healthcare services
through education and self management. 9
received. In a national evaluation of primary
Providers have also been slow to implement
care and specialist physician performance for
evidence-based medicine in their practice
30 medical conditions plus preventive care,
workflows, in part because of the lack of
patients received recommended care only 55
evidence and the tools and support necessary 10
percent of the time. And a growing number of
patients report difficulties in scheduling timely
appointments with their PCPs.


In turn, many PCPs are also growing frustrated The growing level of frustration and
with the type of care they provide, as they are reimbursement discrepancy is contributing to
faced with a payment structure that rewards a widening shortage of primary care providers
acute, episodic and procedure-based care in the United States. From 1999 to 2009, 46
with insufficient reimbursement for coordi- percent fewer U.S. medical school graduates
nation and proactive, planned care. They are entered family practice residencies (see
14
typically overburdened by large numbers Figure 1). And the estimated overall primary
of short patient visits for acute problems care physician shortage is expected to reach
15
without the organization and staff needed 35,000-44,000 by 2025. Moreover, many
to proactively manage the health needs of nurses and nurse practitioners are electing to
a defined population of persons. One study work at wealthier specialty practices, further
estimates that a typical primary care physician straining the primary care system.
would need 18 hours per day, using the
current acute care visit model, to provide all Other stakeholders are becoming increas-
recommended preventive and chronic care ingly aware of the pitfalls in the primary care
11
services to a typical panel. Forty-one percent system. U.S. employers, which provide health
of the primary care workload (arranging insurance to 60.9 percent of the nonelderly
referrals, patient communication, emotional population, are increasingly dissatisfied with
support and encouragement, etc.) is not the cost and quality of healthcare services
reimbursed by a procedure/examination- they purchase and view the shortcomings in
oriented fee-for-service methodology.
12 the primary care system as key reasons why
Furthermore, the median income for they cannot buy comprehensive care for their
16
primary care physicians is about half that of employees. The cost of healthcare negatively
13
specialists.

FIGURE 1.
Family medicine residency positions and number filled by U.S. medical school graduates.
3500

3000
Positions available
2500

2000
Positions filled by U.S. graduates
1500

1000

500

0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: American Academy of Family Physicians, based on data from the National Resident Matching Program.


The cost of healthcare is impacts the global competitiveness of In summary, we believe the U.S. healthcare
American companies. Poorly managed chronic system is broken and unsustainable. Primary
increasingly pushed onto
disease affects productivity, due in part to the care, a critical piece of any healthcare system,
the patient through higher
absence of strong primary care resources is “the most broken.” The purpose of this study
premium contributions, and coordination. The cost of healthcare is is to analyze the patient-centered medical
co-pays and deductibles increasingly pushed onto the patient through home, or the “medical home” – an enhanced
to the point that even higher premium contributions, co-pays and care model that provides comprehensive and
well-insured patients are deductibles to the point that even well-insured timely care with appropriate reimbursement,
patients are financially threatened by serious emphasizing the central role of primary care. In
financially threatened by
illness. Health expense debt has become a particular, we explore if and why various stake-
serious illness. 17
leading cause of personal bankruptcy. The holders should consider investment in PCMH
cost of healthcare compromises the ability of initiatives. Based on knowledge gained from
governments at all levels to provide service. current PCMH efforts to date, we also offer
Employers are also increasingly concerned considerations on how to effectively define
about the effects of healthcare costs and and implement a medical home initiative.
are eliminating or reducing health benefits. Observations and recommendations on this
And there is growing recognition that insured topic are particularly timely to help avoid
Americans might not have an established unfettered expectations about its immediate
source of access to basic primary care potential – as the model is in its infancy in the
18 20
services. United States.

“Primary care, the backbone of The medical home: What is it? What
the nation’s healthcare system, is isn’t it?
In broad terms, the PCMH provides care that
at grave risk of collapse due to a is “accessible, continuous, comprehensive
dysfunctional financing and deliv- and coordinated and delivered in the context
21
of family and community.” The American
ery system.”
Academy of Pediatrics (AAP) introduced the
– American College of Physicians19
medical home concept in 1967 to improve
healthcare for children with special needs.
In 2007 the American Academy of Family
,
Physicians, the AAP the American College
,
of Physicians and the American Osteopathic
Association issued principles defining their
vision of a PCMH (see sidebar, Principles
22
of PCMH). This represents a fundamental
change from how healthcare is being
delivered today (see Figure 2).


FIGURE 2.
The PCMH concept advocates enhanced access to comprehensive, coordinated, evidence-based,
interdisciplinary care.

Today's care Medical home care
My patients are those who make Our patients are those who are registered in
appointments to see me our medical home
Care is determined by today’s problem and Care is determined by a proactive plan to
time available today meet health needs, with or without visits
Care varies by scheduled time and Care is standardized according to evidence-
memory or skill of the doctor based guidelines
I know I deliver high quality care because We measure our quality and make rapid
I’m well trained changes to improve it
Patients are responsible for coordinating A prepared team of professionals coordinates
their own care all patients’ care
It’s up to the patient to tell us what We track tests and consultations, and
happened to them follow-up after ED and hospital
Clinic operations center on meeting the An interdisciplinary team works at the top of
doctor’s needs our licenses to serve patients

Source: Adapted with permission from F. Daniel Duffy, MD, MACP, Senior Associate Dean for Academics, University of Oklahoma School of
Community Medicine.

and among the 25 percent who did respond,
Principles of PCMH 25
only 40 percent were correct.
• Patient-centric/personal PCP
• PCP-directed medical team Another key component of the PCMH is the
• Whole person orientation team approach to care. Under this model,
• Care is coordinated and integrated the patient is at the center of the healthcare
• Emphasis on quality and safety
experience, supported by a team of healthcare
• Enhanced access
professionals who are practicing at the “top
• Appropriate reimbursement.
of their licenses.” The physician, nurse, nurse
Source: American Academy of Family Physicians, American
Academy of Pediatrics, American College of Physicians,
practitioner, patient educator, pharmacist, as
American Osteopathic Association. Joint principles of the well as other caregivers, have new roles to
patient-centered medical home. February 2007. play in a team-based approach to care that
incorporates a shared sense of responsibility
At the core of the medical home is the for the patient’s health. Rather than being just
patient’s personal, comprehensive, long-term a resource for episodic care, the PCP-led care
relationship with the PCP Patients who have
. team assumes proactive prevention, wellness,
a PCP will incur about a third less healthcare and chronic illness care, becoming the
expenditure and will have 19 percent lower patient’s confidant, coordinator and advisor for
23
mortality. They are 7 percent more likely to all aspects of healthcare.
stop smoking and 12 percent less likely to
24
be obese. Yet today, 75 percent of recently Quality and safety are hallmarks of the
surveyed hospitalized patients were unable to medical home. Where evidence-based
name a single doctor assigned to their care – guidelines are available and implemented,


While PCMHs can often with the support of IT tools, PCPs will be Consumers must be willing to take more
able to deliver both more personalized and responsibility for their health and healthcare,
be foundational to
safer care. It is also about enhanced access, including changing unhealthy behaviors
transformation, they 26
such as flexible scheduling, group visits and with appropriate help. Care delivered by
are not a cure-all. use of multiple channels of communication, the medical home team must be aligned,
such as e-mail, phone, or a Web-based portal integrated and coordinated with care delivered
where patients can manage their personal by other caregivers, such as specialists, in
health record, monitor their own issues or other venues such as ambulatory surgery
make appointments. centers or hospitals. To encourage clinicians
to collaborate and operate effectively, policy
While PCMHs can be foundational to U.S. or legislative changes will be needed in areas
healthcare transformation, they are not a such as insurance coverage, reimbursement
cure-all. Much needs to be done to support (such as payment for inter-specialist commu-
PCMHs in order to implement them and fully nication needed for care coordination),
realize the benefits. First, PCPs must have and roles and responsibilities of caregivers.
better clinical information at the point of Additionally, changes in education and
service. For example, they need better access training for clinicians will be needed to better
to relevant patient information and clinical cover critical topics such as team-based
knowledge to more accurately and completely care, use of IT for access to information and
diagnose problems and deliver effective, communication, quality improvement and
evidence-based, personalized healthcare. how to incorporate evidence into practice in
Information technology help make needed non-hospital settings. Finally, the underlying
clinical information and knowledge readily infrastructure to support the PCMH model,
available. such as IT and other services, will need to be
Second, broad support and changes much more robust (see Figure 3).
are needed from other stakeholders.

FIGURE 3.
Multiple entities, such as care delivery organizations or health plans, could help support the PCMH.

Providers
Individuals
• Tools and resources for virtual
• Health/wealth planning
interdisciplinary care delivery
and management
teams
• Risk assessment
• Tools to support better
• Personal Health Records
• Health access to clinical and patient
• Connected personal
coaching information
medical devices
• Value • Tools to support cost/quality
• Trusted clinical
coaching transparency
information
• Tools or services to provide
• Collaboration tools and
coordinated, integrated care
trusted sites
• Tools to enhance access
• Benefits selection
(e-visits, telemedicine)
• Provider selection
• Tools to streamline
administrative processes

Source: IBM Global Business Services and IBM Institute for Business Value.


We have learned valuable lessons from Pay-for-performance (P4P) efforts have
previous approaches to address healthcare not necessarily been more successful in
cost, quality and access problems. However, improving quality of care compared to
28
none of these approaches was as compre- non-P4P practices. Nor does P4P restructure
hensive as PCMH (see Figure 4). Today, these or emphasize changes in primary care. Some
approaches continue to evolve and sometimes experts are concerned that P4P may be toxic
cause confusion by being equated with – that providers will chase the improvement in
PCMHs. For example, “disease management” measures that provide more money, ignoring
frequently operates independently from, or de-emphasizing important improvement
29
rather than integrated with, the primary care activities that do not enhance income.
practice. The Chronic Care Model, which has
strong theoretical validity, originally focused on Non-integrated managed care, when applied
chronic patients, but is now being adapted to as a cost-controlling measure, placed the
address prevention and other issues, such as primary care physician in the role of a
access and reimbursement.
27 “gatekeeper” to control access to more
expensive specialty care.” Financial incentives

FIGURE 4.
While other approaches have addressed some PCMH Principles, none has addressed them all.
Factor/Principle PCMH Non-integrated Pay for Disease Chronic care
managed care* performance management model
Purpose/focus Facilitate Ideally: cost, Meet operational Meet specific Org. framework
partnership quality; Actually: goals with management for chronic care
between PCP and control utilization financial targets for mgt and practice
patient incentives chronic disease improvement
Patient centric/ Yes No No Maybe, often Yes, for chronic
personal PCP led by actors illness
independent of
primary care
PCP directed Yes No No No Yes
medical “team”
Whole person Yes No No No Yes
orientation
Care is Yes No incentive for No incentive for Maybe Yes
coordinated and/ coordination coordination
or integrated
Emphasis on Yes, evidence- No, reduced Indirectly; Yes, particularly Yes, for chronic
quality and based and best utilization process targets for diseases illnesses
safety practice; improved rewarded rather than
outcomes outcome ones
rewarded
Enhanced access Yes No, reduced No Maybe No
access
Appropriate Yes for PCPs, Potential conflict No, still volume Partially, if No
reimbursement unclear for others in motivation driven evidence-base
used

Alignment with PCMH principle: Aligned Mixed alignment Not aligned

*Note: By “non-integrated managed care,” we refer to the form of managed care practiced in the 1980s and early 1990s that emphasized a
“gatekeeper model” with cost controls, rather than a more patient-centered focus on primary care. Most surviving forms of managed care are
more integrated and incorporate more elements of the PCMH model.


Healthcare stakeholders encouraged PCPs (or a “distant” decision Other governmental initiatives are also
maker with limited knowledge of the patient’s underway. In the Tax Relief and Healthcare
have a unique opportunity
personal situation and little-to-no focus on Act of 2006 and the Medicare Improvements
to either engage in the
quality or satisfaction metrics) to underutilize for Patients and Providers Act of 2008,
healthcare transformation services. As a result, patients perceived Congress directed the Centers for Medicare
initiatives, including managed care as restricting access. As James and Medicaid Services (CMS) to “redesign
those based on the Robinson notes in the Journal of the American the healthcare delivery system to provide
medical home, or risk Medical Association, “The strategy of giving targeted, accessible, continuous and
with one hand while taking away with the other, coordinated, family-centered care to
being left behind.
of offering consumers comprehensive benefits 33
high-need populations.” In January 2010,
while restricting access through utilization CMS will launch a three-year demonstration
review, obfuscates the workings of the system, program that will operate in rural, urban and
undermines trust between patients and PCPs, underserved areas in up to eight states. The
30
and has infuriated everyone involved.” American Recovery and Reinvestment Act of
2009 emphasizes health IT and primary care,
PCMH, in contrast, incorporates the full range 34
among other healthcare efforts.
of care, encompassing prevention, wellness,
acute, chronic and long-term care within Healthcare stakeholders have a unique
a framework of strengthened primary care opportunity to either engage in the healthcare
and provides coordination and collaboration transformation initiatives, including those
to provide appropriate care. PCMH aligns based on the medical home, or risk being
reimbursement and practice incentives to left behind. As American Academy of Family
support the provider-patient relationship. Physicians President Ted Epperly, MD, said:
Decisions will be made using best evidence “[AAFP members] must step forward now
of appropriate and cost-effective care. Access in everything we do to try to be part of
will be enhanced rather than restricted, and the solution in transforming our healthcare
quality and satisfaction will be measured and 35
system.” And Karen Ignagni, President and
reported. CEO of America’s Health Insurance Plans,
made a similar call: “All stakeholders must rise
Why should PCMH be done now? to the challenge the President has put forth to
A significant transformation of the U.S.
develop a uniquely American solution that gets
healthcare system appears imminent. The
everyone covered, restrains healthcare cost
current administration has stated it will press
growth and aligns patient care with medical
for “comprehensive” healthcare reform
31
best practices. [Health plans] are committed
legislation in 2009. Included in his 2010
to doing our share to achieve this goal and
budget proposal, President Barack Obama 36
will work closely with other stakeholders.” In
has proposed the largest investment ever in
32
short, there is a growing consensus that trans-
preventive care.
formation is needed and that the PCMH offers
potential benefits to key healthcare stake-
holders (see Figure 5).


FIGURE 5.
The medical home offers potential benefits to stakeholders across the healthcare ecosystem.
Stakeholder Potential benefits of the medical home
Patient/family • Help from a trusted resource to navigate healthcare system
• Empowered to make better-informed healthcare decisions
• Receive safe, effective care with compassion
• Achieve healthier outcomes collaboratively with extended care delivery team
• Improved relationship with PCP, health plan.
Primary care • Redefine patient relationship to deliver more comprehensive, coordinated care
provider • Fair compensation for PCMH services, as well as rewards for improved clinical outcomes
• Through a shift in incentives, able to more effectively provide wellness and preventative care
• Better supported to deliver quality care to patients.
Specialist • Receive higher quality referrals, with more complete documentation
• Improved focus on area of expertise without having to assume management of patient’s
primary care
• Opportunity to offset income losses by participating in financial incentives for coordination and
quality (for example, telephone consultations).
Nurse • Develop better relationship with patients
• More involvement with patient care and support (for example, patient education, behavioral
change, preventive care, proactive care planning).
Pharmacist • Participate fully in team-based care (for example, help determine medication and reasonable
formularies).
Social worker • More integrated role to address key patient needs (for example, Medicaid).
Hospital • Serve PCMH patients whose conditions may not be as severe as non-PCMH patients
• Potentially reduce admissions from patients who cannot pay
• Potentially reduce number of re-admissions, for which there may be no or reduced payment.
Health plan • Improved member and employer satisfaction
• Expend healthcare resources with less waste and greater effectiveness though coordinated,
evidence-based care.
Employer • Purchase healthcare based on value and potentially see medical cost savings
• Maintaining more present and productive workforce, in part, through improved wellness and
prevention.
Pharmaceuticals and • Improved appropriateness of and compliance with therapeutics
other life sciences • Enhanced pharmacovigilance of products, post clinical trials.
Government • Potential to improve care quality, reduce wasteful healthcare expenditures
• Address frustration with the current uncoordinated and impersonal system.
Communities and • Potential for a healthier, more productive citizenry
society • Potential to allocate dollars so that they have greater return.



Even though changes Community Care of North Carolina (CCNC)
“If the U.S. is serious about closing has also been successful. CCNC was
in the healthcare
the quality chasm, it will need a formed to reduce healthcare costs and
system are difficult
strong primary care system, which increase access and quality of the state’s
to implement, PCMH under- and uninsured population. It includes
is an initiative that requires fundamentally reforming case managers to target high-cost, high-risk
can be successfully provider payment, encouraging enrollees. In January 2009, CCNC managed
implemented now. all patients to enroll in a patient- the care of 874,000 Medicaid enrollees and
95,000 children on NC Health Choice – a free
centered medical home, and sup- or reduced-cost health insurance program for
porting physician practices that uninsured children from birth through age 18.
42

serve as medical homes with the Both external and internal evaluations of the
program have documented positive results. A
information technology and techni- recent study reported that CCNC produced
cal assistance for redesigning care cost savings of at least $160 million per
43
processes.” year. And internal analyses have also shown
improvements. An asthma program reduced
– Karen Davis, President, Commonwealth Fund37
hospital admission rates by 40 percent and a
diabetes program improved quality of care by
Why can PCMH be done now? 15 percent.
44

Despite the difficulties in making significant
changes to the healthcare system, the PCMH Moreover, this medical home-type approach
model can be implemented now. Pilots have is working outside of the United States in
demonstrated success in key areas such as countries such as Denmark, Ireland and Spain,
improved quality, greater patient compliance which have had programs in place longer.
and more effective use of healthcare
Additionally, there is growing and broad
services, such as reductions in unnecessary
interest in revamping primary care and the
or avoidable hospitalizations and use of
medical home model in the United States.
emergency rooms for primary care. And some
PCPs, hospitals, health plans, large employers,
programs report cost savings. For example, the
consumer groups, patient quality organiza-
Voice of Detroit Initiative (VODI) was medically
38 tions, labor unions and other groups have
and financially successful. From 1999-2004,
formed the Patient-Centered Primary Care
it enrolled 25,000 uninsured individuals in
39 Collaborative to advance primary care and the
Detroit. Patients were enrolled from primary
medical home model for the 100 million people
care sites, mainly emergency departments 45
40 they represent. And many of these organi-
(EDs). VODI reduced ED use by over 60
zations have directly invested in individual
percent and costs by 42 percent (from $51.2
medical home initiatives. In addition, 44 states
million in uncompensated care costs to $29.7
41
million).


and the District of Columbia have passed In short, with growing support from key stake-
or introduced at least 330 laws to define or holders, examples of success from which to
46
demonstrate the medical home concept. learn, and adequate financial incentives for
Minnesota, for example, has passed legislation PCPs to transform practices, the PCMH can
requiring all health plans to have medical and should be done now.
home offerings by 2011.
How should PCMH be done?
Further, the financial incentives now exist Keys to the success of medical home
for PCPs to transform their practices. New initiatives are strong leadership and a clear
payment mechanisms are being used to vision. These must be supported by strong
compensate primary care providers for guiding principles and standards, as well as
important activities, such as those related to relevant, realistic, and flexible strategic plans
chronic disease management and monitoring, and processes to help provide effective
that were not previously reimbursable. Also, direction, structure and operations. Such
the recently enacted American Recovery and strategic plans and processes have, at times
Reinvestment Act will pay physicians up to in the past, been lacking. And as one industry
$44,000 and more for meaningful use of an leader mentioned, “if you implement the
47
electronic health record (EHR). medical home wrong, you can make it more
difficult to transform healthcare system and
Finally, the technology is now “good enough” 48
even make the practice worse.”
to get initiatives started and, done correctly,
will likely scale to support larger implementa- Leaders also observed that PCPs have played
tions. For example, disease registries, portals, a prominent role where PCMH has worked.
e-prescribing capabilities and EHRs are robust That is, PCPs need to decide that the medical
enough today to get started. home is how they want to practice medicine.

FIGURE 6.
The Patient-Centered Primary Care Collaborative is comprised of broad stakeholder support and
participation. Providers
• Primary care associations (333,000 physicians)
• Associations represnting integrated delivery networks,
academic medial centers, community hsospitals (4,000)

Purchasers
• Most Fortune 500 companies
Suppliers • Many small and medium businesses
• Pharmaceutical and via local business coalitions
medical device companies • National Business Coalition on Health
• Solution providers Patient-Centered • National Business Group on Health
Primary Care • The ERISA Industry Committee
Collaborative • HR Policy Association

Consumer advocates Health plans
• Unions • Health plans including Aetna,
• Special interest groups BlueCross BlueShield Association,
The Capital District Physicians’ Health
Plan, CIGNA, Healthcare Services
Corporation, Humana, Medco, Priority
Health, Taconic IPA, UnitedHealthcare,
Source: Patient-Centered Primary Care Collaborative. WellPoint


Today, there is Then, other stakeholders, including local In this section, we offer considerations to
hospital systems, physician associations, local current and future medical home initiatives, to
simultaneous
employers and business coalitions, must also help frame discussions and provide guidance
underutilization of
come together in support of the PCMH. PCPs in utilizing current best practices when imple-
proven preventive must commit to making it “their” practice and menting a medical home, based on the
and protective care affecting the necessary transformation. It rarely framework presented in Figure 7 .
with overutilization of works when non-PCP stakeholders are the
initiators. What is the problem to be addressed by
expensive diagnostics
PCMH implementation?
and interventions. The National Committee for Quality Assurance The U.S. healthcare system is ripe with oppor-
(NCQA) Standards and Guidelines for tunities to improve quality, improve access or
Physician Practice Connections – Patient- reduce costs. For example, there is underuti-
Centered Medical Home (PPC-PCMH) lization of proven preventive and proactive
was frequently used as a guide for PCMH care. This is typically caused by lack of access
discussions and planning. While not perfect to primary care for many patients and, in some
and subject to further revision, many initiatives cases, lack of incentives for, or awareness of,
have decided that the PPC-PCMH is “good best practices on the part of some physicians.
enough to get us going.” The NCQA is Moreover, failure to use less costly inter-
reviewing criticism of, and suggestions for, its viewing and physical examination and relying
guidelines, as well as results of PCMH pilots. of imaging and laboratory testing results in
The organization plans to issue revisions in overutilization of expensive diagnostics and
49
2010.

FIGURE 7:
When implementing a PCMH initiative, the problem at hand helps determine the best practices for
common implementation issues.

Is our approach
What is the problem? What are common What are the best consistently aligned
implementation practices? with problem we are
issues? trying to solve?

• What cost/quality/ • Incentives to participate • Who else has addressed • Do you have…
access issue(s) are you • Members/patients our problem? - An appropriate
targeting? - What can we learn governance structure
• Initial funding
- Near, long term? from them to with the right
• Governance address our key participants?
• What are your vision,
guiding principles? • Key metrics implementation - An agreed-upon
• Payments issues? project plan and
strong project
• Practice transformation
manager?
• Technology - Capabilities to support
infrastructure the patient cohort?
• Patient attribution - Metrics to measure
• Sustainability alignment with and
progress toward
original objectives?



interventions. The former produces poor The process of identifying the exact problem
outcomes and high cost associated with to be addressed and scope of the implemen-
frequent and avoidable specialist referrals, ED tation will likely be iterative and must address
visits and hospitalizations. The latter results several implementation issues.
in high cost from unnecessary, redundant or,
even, harmful interventions that add no value What are common implementation
to healthcare outcomes. Both groups can issues and associated best practices?
benefit from the PCMH concept. All medical homes initiatives face common
implementation issues, despite differences
Deciding what problem to solve is sometimes in approach and focus. Our discussion will
obvious, depending on which group initiates examine the most common issues for which
the discussion. For example, a dominant payer best practices exist in order to help guide new
may want to create an initiative to address a or existing medical home initiatives.
specific health-related problem. If the potential
problems to be addressed are numerous, then Incentives to participate
discussions to prioritize them must include If the environment seems like a “burning
key PCPs, health plans and purchasers (e.g. platform,” or legislative mandate exists to
employers). Err on the side of being inclusive implement the PCMH model, the incentives
rather than exclusive. Sample evaluation are clear. Frequently, that is not the case, so
questions include: key participants such as PCPs, care delivery
organizations, public and private health
• Can we establish meaningful, measurable
insurers, employers and consumers must have
goals for the implementation?
adequate incentive to participate – particu-
• Can the potential solution be implemented larly in public and private partnerships – in
in a reasonable amount of time, given likely driving major change to the broken healthcare
resources available? system.
• Is the implementation likely to accomplish
As described in Figure 5 (see page 10), a
the meaningful goals and achieve key
number of potential benefits exist for all key
metrics for success?
stakeholders. But these may come at a cost –
• Is the implementation scalable? In other these key stakeholders may undergo difficult
words, can the solution realistically be changes and may have to make significant
extended beyond those participating in the compromises for “the greater good.” Even
initial roll-out? so, these changes and compromises may be
• Is the implementation sustainable after the the best alternative at this point. More experts
pilot project ends? and decision-makers – including President
Obama – are acknowledging that the current


Successful PCMH U.S. healthcare system is unsustainable and Second, initiatives may focus on patients with
that status quo is not an option. Also, since the multiple chronic conditions as these patients
implementation
healthcare system is badly broken, successful represent significant opportunities for quality
requires both key
transformation will likely significantly impact all improvements or cost reduction through
participants that want stakeholders. proactive, participatory care. If these potential
to collaboratively shape benefits are realized, then challenges may
In summary, potential key participants have
the future of medical occur in sustaining the level of benefits when
three choices: they can participate and help scaling to larger populations.
care and naysayers to collaboratively shape the future; they can
make sure that the key participate to “protect their turf” so that the Patients in vertically integrated financing and
concerns are voiced and U.S. healthcare system continues down an delivery systems represent a third population
addressed early in the unsustainable path, likely bringing changes for piloting. For example, Geisinger Health
that no one will want; or they can decide not System, which has the advantage of being
initiative.
to participate and let the future be shaped for both provider and payer, included a broader
them by others. A successful implementation base of patients, most of whom were covered
must include enough participants that want by the Geisinger plan for both payment and
50
to collaboratively shape the future. But, as care. Even so, most of the initial reported
well, it must also include “turf protectors” and improvements in outcomes and costs resulted
naysayers to make sure that key concerns are from patients with chronic diseases.
voiced and addressed early in the initiative.
The focus on chronic or high-utilization
Members/patients patients is not surprising. Most of the current
The patient-centered medical home serves PCMH projects are relatively new, so insuffi-
patients (the sick or those with complaints) cient time has elapsed to demonstrate benefit
and members (those who seek participation in in asymptomatic individuals other than in the
a service that provides proactive, collaborative provision of immunizations or appropriate
and coordinated care). Decisions about which assessments. The cost-effectiveness of
members or patients to include in the initial secondary prevention measures, such as
implementation are driven in large part by the screenings, counseling for weight loss or
key stakeholders participating – which PCPs, for smoking cessation, is less clear. There is
which payers or which major employers – and a point of diminishing return in performing
the ultimate goals of the initial implementation. widespread screenings for healthy or asymp-
Early initiatives have centered on one of three tomatic people. But where that point is
patient (member) populations. remains unclear. Even the evidence of cost-
effectiveness or the ability to reduce costs for
First, initiatives may focus on underserved chronic disease management is inconclusive;
populations (for example, Medicaid or the studies frequently haven’t included costs, and
uninsured) who are typically high utilizers chronic disease management covers a broad
of uncoordinated, reactive and expensive range of activities.
services, such as emergency or inpatient care.
Thus, they offer a large potential opportunity
for quality improvements and cost reductions.
The challenge is that this patient population
could be difficult to manage and may have to
rely on social workers to a greater extent than
is typically available in today’s primary care.


As a result, some experts voice concern that Initial funding
PCMH may not be scalable to widespread In today’s increasingly unaffordable healthcare
implementation. However, PCMH has shown its system, funding is always an issue, and
value in smaller countries, such as Denmark, creating a medical home or a PCMH initiative
that have instituted PCMH on a national basis. requires substantial investment. Properly
It is reasonable that the ultimate goal of PCMH implemented, all stakeholders will benefit.
should be widespread implementation. If it The major payers – governments, insurers
is limited to only Medicaid/uninsured and/or and employers – could see consequential
chronic disease patients, at least three adverse reductions in expenditures or improvements
effects can occur: in value over time. Under some circum-
1. A large fraction of patients will be denied stances, hospitals or healthcare systems
the advantages of PCMH. The potential can benefit both by providing improved care
benefit of involving patients before they and saving money. For example, hospitals
have established chronic disease and that treat Medicaid or the uninsured may
disability will be lost. benefit financially from the reduced utilization
associated with medical home by avoiding
2. The true value of prevention may never be
unnecessary unreimbursed or poorly
known.
reimbursed care. Organizations that are both
3. The benefit of practice transformation will a payer and provider should see financial
be blunted. benefits. Thus, all these groups have incentives
a) Practices may be confined to one group to provide initial funding for creating medical
or type of patient. homes.

b) Practices may be divided – part In fact, members of each of these groups
PCMH, part acute-care-based, leading have funded the development of PCMH
to unnecessary complication and programs. CMS provided initial funding for
confusion. medical homes and provides additional funds
c) The costs of practice transformation for initiatives. North Carolina has developed
(for example, care coordinators, a medical home for approximately 874,000
24-hour access, etc.) will not be evenly Medicaid patients and 95,000 children on NC
51
distributed. It will be reminiscent of Health Choice. Pennsylvania has developed
the conflicts between HMO patients a state program oriented to chronic care
and indemnity patients in the early patients. Among many others, the Blues in
managed-care environment. Michigan, Horizon in New Jersey and all the
health plans in Vermont have funded medical
Because of the ethical and operational home projects. IBM, as an example of one
challenges of having a divided practice – employer’s support, provides an additional
with part of the patients under the medical $12 per member per month to fund the care
52
home and part not – most provider practices management services of a medical home.
participating in medical home initiatives that Geisinger Health System implemented and
we surveyed transform their practices for all funded a patient-centered medical home
patients, not just for patients formally partici- with preliminary results showing a 7 percent
pating in the initiative. reduction in costs and a 20 percent reduction
53
in all-cause hospital admissions.


The governance Some pharmaceutical firms also support Medical home governance should focus on
medical home initiatives as the PCMH model strategic alignment of goals and outcomes
structure should
may result in improved appropriateness of (“What is the problem we are trying to
be inclusive of all
and long-term compliance with medicines address?” see page 13); value delivery (“How
,
relevant stakeholders by persons with chronic illness, for example. will each stakeholder contribute to deliver the
across the public and The model also offers promises for enhanced benefits promised at the beginning of a project
private sectors. prevention, so there are opportunities for or investment?”); resource management (How
improved use of vaccines. will we manage our resources and ourselves
more efficiently to meet our goals?”); risk
Governance management (“How will we measure, accept
A sound governance structure and process and manage risk?”); and key metrics (“What
are needed to align and sustain the medical are the qualitative and quantitative measures
home initiative’s strategies and objectives. The needed to assess our performance towards
goals and approach should be documented reaching our goals?”).
in a charter, and the process of transformation
should enable collective learning across Key metrics
participating stakeholders. Without this, as Measurement and evaluation processes are
one healthcare leader noted, the “messages critical because of their effects on the rewards
get blurred because everyone needs to for information sharing, the motivation for risk
54
understand what we’re doing and why?” taking, incentives for desired behaviors, the
resulting organizational learning and other
This structure should be inclusive of all factors. Educating the medical home stake-
relevant stakeholders across the public and holders on the metrics and why they may vary
private sectors, including PCPs, physician across functions is crucial for maintaining
organizations or affiliations, consumers, major morale and cooperation. To date, medical
employers, health plans and key government home efforts have used a combination of the
representatives, such as those from Medicaid following types of key metrics:
and the state insurance commission. Such
widespread participation offers great • Costs: Targeted cost metrics are impacted
advantages (greater buy-in, for example) and by things such as the types of patients, the
challenges (delays in reaching consensus) number of patients and the duration of the
– but will require flexibility, as expectations PCMH initiative.
and standards will likely evolve over time. • Process of care: Appropriate screening
Additionally, attorneys may need to attend for traditional conditions such as breast,
governance meetings to help discussions stay colorectal, and prostate cancers, for
within the bounds of prevailing laws, or guide example. Some have aligned these metrics
actions for changing or requesting exceptions with NCQA accreditation measures, thereby
to current regulations. It is also important to incenting health plans to participate and
include both zealots and the naysayers to to offer pay-for-for-performance reimburse-
allow all perspectives to be considered. ment. Other groups have also focused on
targeted conditions that are more endemic
to their population.


• Outcomes of care: Measurements of the Reimbursement
change in health for a patient or a cohort. Medical homes initiatives are experimenting
Since there is no definitive health index, with different payment structures, as groups
outcome measures have focused on find the right balance for stakeholders and
individual conditions and patient compli- program objectives. Today, initiatives use
ance (for example, tracking change in combinations of four basic reimbursement
glycosylated hemoglobin (HbA1c) levels in elements: fee-for-service payments with
diabetics or blood pressure for hyperten- new service codes (for example, e-visits);
sion) or utilization (for example, hospital care management fees; bonus payments for
admissions or emergency department meeting certain criteria (for example, NCQA
visits). certification); and quality or performance
56
• Service: Service metrics have focused on incentives. By far the most common
operational aspects, such as the time to approach is a traditional fee-for-service
answer the telephone and the wait until the payment and additional payment for meeting
next appointment. certain quality metrics.

• Patient and caregiver satisfaction: A key However, concerns exist about some of
way a medical home can demonstrate its these proposals. For example, some argue
commitment to quality and in improvements that retaining volume-based elements risks
is to assess the satisfaction of its patients inhibiting the necessary transformation to
and the clinicians providing care. There proactive, preventive, and non-visit coordi-
are numerous existing surveys to choose nation of care delivery and the practice. So,
from, such as Consumer Assessment of while there is no perfect model, a blended
Healthcare Providers and Systems (CAHPS), model, such as the three-part payment
which enables groups to compare their methodology recommended by the Patient-
results with national ones. Centered Primary Care Collaborative – which
• Coordination of care: These metrics are includes components for services rendered,
more innovative, but more difficult, since care management and performance – may be
57
they require a sophisticated tracking system. the best compromise.
With its consultation and referral tracking
In Colorado, for example, the Colorado
system, the University of Oklahoma is
Multi-Stakeholder Pilot has implemented
developing a set of measures that accounts
the three-tier reimbursement model of
for the rapidity of referrals and getting the
fee-for-service, per-patient-per-month and
referral, from initiation to completion, and
55
pay-for-performance that aligns with the Joint
includes quality and process measures.
Principles and the PCPCC recommenda-
So “what proportion of patients with certain 58
tions. This model mitigates the unintended
kinds of problems is seen by the specialist
consequences present when implementation
and was handled in this e-mail exchange?”
is in a siloed fashion. Nevertheless, experi-
is an example of a novel measure, tied to
mentation is key and should be directed by
the ability to track that kind of information.


PCPs should view the a set of guiding principles, such as the Practice transformation
ones provided by the AAFP (see sidebar, PCPs that participate in the medical home
medical home as a
AAFP’s Recommendations for Medical Home should view it as a transformation of their
practice transformation
Payment). practice that affects all of their patients, not
that affects all of their simply those active in the medical home
patients. AAFP’s Recommendations for Medical initiative. If implemented only for a few patients,
Home Payment it will require old and new processes to
According to the AAFP, the medical home payment co-exist, creating operational complexities for
structure should: the practices.
• Reflect the value of PCP and non-PCP staff
Successful transformations require a focused,
work that falls outside of the face-to-face
visit associated with patient-centered care tightly coupled approach that incorpo-
management rates systematic change management,
including the redesign of key processes and
• Pay for services associated with coordination of
capabilities across the practice, as well as
care both within a given practice and between
changes in roles and responsibilities. This
consultants, ancillary providers and community
helps the medical home team to achieve the
resources
desired goals of providing more coordinated,
• Support adoption and use of health information integrated and ongoing care, and represents
technology for quality improvement an overall change in the culture or value
• Support provision of enhanced communication system of the practice.
access, such as secure e-mail and telephone
consultations Figure 8 gives an example of the possible
impact of this transformation. The horizontal
• Recognize the value of PCP work associated
axis represents the percentage of patients in
with remote monitoring of clinical data using
this hypothetical practice needing the various
technology
services listed. The bars are color-coded to
• Allow for separate fee-for-service payments represent which medical home team member
for face-to-face visits, but payments for care- could be assigned primary responsibility for
management services that fall outside of the
that service. Obviously, these assignments
face-to-face visit, as described above, should
could vary from practice to practice depending
not result in a reduction in payments for face-to-
on factors such as the demographics of the
face visits
medical home population and the numbers
• Recognize case mix differences in the patient and types of resources and skill sets available.
population being treated within the practice Additionally, resources outside the practice
• Allow PCPs to share in savings from reduced would be available and should be used appro-
hospitalizations associated with PCP-guided priately. Also, since this would be a PCP-led
care management in the office setting interdisciplinary team, other team members
• Allow for additional payments for achieving – including the PCP – would likely assist or
measurable and continuous quality improve- support the person(s) with primary responsi-
ments.


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