Federal, State Governments, Insurers Test 'Medical Home' Model Of Health Care To Reduce Costs

Main Category: Primary Care / General Practice
Also Included In: Public Health
Article Date: 22 Jul 2008 - 5:00 PDT

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Some health insurers and other payers, including Medicare and Medicaid, are testing the "medical home" model of care to see if patient-centered care can reduce later treatment costs, the New York Times reports.

According to the Times, insurers on average pay $60 for a visit to a primary care physician. Experts say that level of payment allows physicians to spend only a few minutes with each patient.

The medical home model -- in which "doctors, staff and patients pull together as one big health care family" -- pays physicians more to allow them to spend more time with each patient to increase accuracy of diagnoses, focus on preventive care and help patients improve management of their chronic conditions, the Times reports. This focused care would reduce costs for payers and patients by limiting unnecessary tests and visits to specialists and curbing preventable hospital visits.

According to the Times, pilot projects that involve about two million patients testing the medical home model currently are being run in at least six states. North Carolina's Medicaid program reduced its costs in 2006 by about $162 million, or 11%, through a medical home project, according to Mercer. Pennsylvania Gov. Ed Rendell's (D) Office of Health Care Reform is collaborating with Independence Blue Cross, Aetna and Cigna and some Medicaid providers to create a medical home pilot program in the Philadelphia area. The insurers have agreed to invest $13 million over three years in the program, which will expand to other parts of the state later this year. In addition, Blue Cross Blue Shield of Michigan this year will launch its own medical home program. BCBSM plans to spend $30 million on the program, which will involve about 4,900 primary care physicians, according to BCBSM Chief Medical Officer Thomas Simmer. In addition, the Medicare law passed last week authorizes $100 million over three years for a medical home project.

Increasing PCPs
Advocates of the medical home model hope it will bring more PCPs into the health care system. According to the American Academy of Family Physicians, only 7% of medical school graduates last year chose family practice. Family practice physicians have annual incomes of $150,000 on average, according to AAFP. American Medical Association officials said that in 2006 there were more than 251,000 family physicians, general practitioners and internists practicing, compared with almost 472,000 specialists, whose incomes are typically higher. The Medical Group Management Association said that gastroenterologists have incomes of about $406,000 annually and cardiac surgeons have incomes of about $433,000 per year.

Opponents
Opponents of the medical home model are not convinced the extra money paid to create and maintain a medical home will yield savings, the Times reports. "There is very little concrete rigorous evidence that the medical home will do all those wonderful things they want it to do," Mark Pauly, a health policy economist at the University of Pennsylvania's Wharton School, said. Don Liss, an Aetna medical director, said that a "reasonable body of evidence suggests that improving primary care as a foundation for health care will improve quality and access to care" but that there is no guarantee that it will provide savings on a "reasonable time horizon" (Freudenheim, New York Times, 7/21).

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