Medical Homes Save Money!

Yesterday I talked about a study that revealed how little medical students learn about the costs of health care. Bundled payments, I said, is one way to provide the incentive for docs to pay attention to the cost of care. Medical homes are another way to get primary care docs involved in providing more effective care. So do patients in medical homes use fewer resources? A story from Kaiser Health News revealed the following:

Some health policy experts and clinicians have long maintained that, in the effort to reduce health care costs and improve patient outcomes, there's no place like (a medical) home.

A new study in the May issue of the journal Health Affairs seems to validate that notion.

Medical homes — where primary care doctors are held responsible for coordinating care for individual patients – are seen as a model for lowering costs without sacrificing quality. (Related story: Living In A Medical 'Home’).

Dr. Rob Reid and colleagues from the Group Health Research Institute examined the costs and patient outcomes from a team of medical professionals providing care for 10,000 patients at a Seattle-area Group Health "medical home." The conclusion? The medical home produced significant cost savings.

For example, during the two years studied, the team's patients had 29 percent fewer ER visits and 6 percent fewer hospitalizations compared with other Group Health clinic patients. There were start-up costs — $16 per patient per year — and results took a couple years to provide the bulk of the savings. But, ultimately, Reid said that for every $1 it invested in the system, Group Health saved $1.50 by keeping patients out of the ER and the hospital. And the medical home patients "reported better care experiences" as well.

The strategy is now being expanded to all 26 of Group Health's Washington state medical centers — covering more than 400,000 patients. Reid, in an interview, called primary care "a real team sport where the primary care clinician is the quarterback."

If such plans sound like managed care organizations such as Kaiser Permanente, that's because they have a lot in common, including the primary care doctor at the center. But patients at Group Health can self-refer to certain specialists and the approach rewards doctors, not simply the organization, to improve health outcomes.

There's evidence that the medical home, "works and works very well," said HHS Secretary Kathleen Sebelius, at a Tuesday Health Affairs briefing. She also noted that primary care will be important to transitioning to a lower-cost health care system in America. But historically, it's been difficult to attract the necessary workforce needed to provide that type of care. "The reimbursement system clearly has penalized primary care providers over the last several decades," she said.

For instance, a second Health Affairs study says doctors could leave as much as $3 million on the table over the course of their careers by choosing primary care as their focus instead of certain specialties.

So it's no wonder that in order for the medical home model to be successful, a few things must be changed, according to Group Health's Reid: The payment system has to be changed to reward better outcomes and boost primary care, electronic medical records and e-health should become a focus and medical teams need to replace lone doctors as the primary providers of care.

As it stands, most doctors in America are paid per patient visit. Doctors at Group Health are on salary, but their salaries also have financial incentives built in — like increased payments if their patients are more satisfied or if they receive better quality scores for their care — something others say could pose significant cost savings if implemented elsewhere. With such changes, the reasoning goes, doctors get to spend more time with each patient because they're not focused on non-medical tasks. Getting doctors to buy in, however, is a significant task.