Patient-Centered Medical Homes Win Unlikely Support

Insurance companies among those driving new approach to healthcare

Zhijun Du, a medical student under Dr. Thomas Ortiz, examines a patient at Forest Hill Family Health Associates in Newark.
When it comes to healthcare, the principles of a Patient-Centered Medical Home seem as common-sense as bed rest and chicken soup: a coordinated, easy-to-access and multilingual system of caregivers with a well-informed family doctor — and patient — at the center. The result: better management of chronic diseases like asthma and diabetes and a focus on identifying and preventing potential health problems before a patient even gets sick.

Despite widespread support for these concepts — and the knowledge that, in the long run, they will save money — experts say the nation’s healthcare system has for years promoted a far-different scenario. The traditional model is one that rewards doctors for providing more, and more costly, specialized treatments — often regardless of how truly necessary they might be.

But this traditional paradigm is starting to change, experts agree. As the cost of medical care has exploded and revenues have shrunk, both the public and private sectors have been forced to find new ways to provide — and pay for — healthcare. And in an unusual twist, insurance companies are now among those driving these reforms.

Beyond Fee-for-Service

One model that has received significant attention is the Patient-Centered Medical Home. A PCMH typically involves a group of primary-care physicians and specialists who share practice information and work together to deliver appropriate, preventive care. When a PCMH is done correctly, patients stay healthier, happier and visit the hospital less — resulting in fewer costly procedures and treatments. Programs differ in how they pay doctors, but the goal is to reward physicians for keeping patients healthy, not for providing as many expensive treatments as possible — a drastic departure from the traditional “fee-for-service” arrangements that reimburse doctors for each procedure or patient visit.

According to the National Committee for Quality Assurance, which provides accreditation for a variety of healthcare programs, interest in PCMH programs has skyrocketed recently. The group had licensed more than 1,500 PCMH facilities by the end of 2010, including close to 50 in New Jersey.

“Health plans in New Jersey and across the country are looking at PCMH models and have invested millions of dollars towards the design, implementation and then evaluation of these alternate care models,” said Ward Sanders, president of the NJ Association of Health Plans, which represents nearly a dozen HMOs. These providers “are piloting PCMH models and trying to learn from the pilots what works and what does not. There clearly have been some early successes that will likely result in a growth of this delivery model,” he said.

The federal reform law, the Patient Protection and Affordable Care Act (PPACA), is largely designed to extend health insurance coverage to tens of millions of Americans who now go without. But it also aims to improve coverage for those who are currently insured, while reducing the healthcare costs for everyone. To this end, the law includes funding for a variety of new healthcare models, including Patient-Centered Medical Homes and Accountable Care Organizations. An ACO generally involves a larger group of doctors, hospitals and insurers who form an organization that can obtain a portion of any healthcare savings, which is then reinvested in patient care.

Healthcare NJ

New Jersey officials are also embracing reforms — driven largely by a quest for savings — that seek to create more coordinated healthcare systems for those who are covered by the state’s Medicaid and FamilyCare programs. The state’s reform proposal, parts of which require federal approval, supports PCMH and ACO models and will shift more than 100,000 patients into managed-care programs in the coming months.

On the private-sector side, insurance companies are also actively involved and even pushing for significant change. In New Jersey, one of the leaders of this effort is a somewhat novel organization. Horizon Healthcare Innovations (HHI) is a nonprofit launched by Horizon Blue Cross Blue Shield of New Jersey last September that is dedicated to finding, testing and building better healthcare systems in the Garden State.

HHI is involved with a variety of healthcare models, including PCMHs and ACOs, as well as efforts to get patients more involved with their own care. Last week it announced that it has hired a panel of high-profile academics to examine the models and see what works best.

The group’s most extensive work is with patient-centered homes. The principles these facilities represent informs much of the organization’s other work, explained Linda Schwimmer, director of external affairs for HHI. The group is now working with more than 60 doctors at eight PCMH pilot projects, sprinkled throughout northeastern and central New Jersey. It is also collaborating with a low-cost federal clinic in Bayonne to launch a similar model there, she said.

“If it’s just fee-for-service, you’re going to encourage [treatment] volume whether it’s appropriate or not,” Schwimmer explained. “This is really a shift in mindset, especially for the payers… For providers, it‘s a relief – finally!”

Care Coordinator

Among other benefits, the HHI program funds at each pilot project a “population care coordinator,” a nurse who works with patients to make sure they are taking their medications, managing their asthma or diabetes, and exercising and eating right, Schwimmer said. The coordinator will also keep tabs on the patients’ charts and follow up to be sure test results are sent and reviewed and that referral appointments are scheduled and kept.

In addition, practices are paid a monthly per-patient stipend to encourage more coordinated care, and HHI sends in a “coach” to help each pilot site become more effective in how it works with local hospitals, specialists and labs, Schwimmer said. The group also provides each practice updated patient data every day, so that family doctors can track a patient’s hospital care or outside treatments, and follow up as needed. HHI also pays doctors a bonus when they meet certain goals for quality and efficiency.

In the HHI pilot projects most services — like the nurse coordinator’s time and the per-patient stipend — are limited to just the patients in the practice who are insured through Blue Cross Blue Shield and not available for those in other healthcare plans. In all eight pilots there are roughly 24,000 patients who are directly touched by these efforts.

But some of the larger systems changes — how doctors interact with patients or how the practice works with specialists — will undoubtedly benefit all the patients who visit the practice, regardless of who is paying the bill, Schwimmer said.

One of the HHI pilot projects is a four-doctor practice run by Dr. Thomas Ortiz, chairman of the state family physician group, who first opened his doors on Mount Prospect Avenue, in Newark, nearly three decades ago. Dr. Ortiz has long been a supporter of managed, coordinated, preventive healthcare and he sees the PCMH model in many ways as a rebranding of an older-style of healthcare, when patients knew and trusted their family doctor to help them negotiate a wider network of labs, specialists and hospitals.

“We’re going back to some good ideas,” Dr. Ortiz said recently, taking a break on a busy midweek afternoon. “And you can do great healthcare [this way] and not overutilize services.”

Early studies seem to indicate the model is providing benefits, both for patients and for those who pay for their care. A study from the Patient-Centered Primary Care Collaborative, a Washington, D.C., based alliance of health insurers and large employers seeking to promote the PCMH model, examined a dozen large-scale PCMH programs run by private insurance companies and government programs — like the Veterans Administration — in a variety of states throughout the nation (but not New Jersey.) The results showed that patients in the PCMH models visited the hospital far less than those in the control groups. In fact, emergency room visits declined 50 percent in a Michigan program that included 25,000 previously uninsured patients. The results also showed that the PCMH patients incurred far lower healthcare costs than their fee-for-service counterparts, in some cases producing hundreds of millions in savings.

“The findings from our updated review are entirely consistent with those of our 2009 report: Investing in primary-care patient-centered medical homes results in improved quality of care and patient experiences, and reductions in expensive hospital and emergency department utilization,” the report’s authors wrote. “There is now even stronger evidence that investments in primary care can bend the cost curve.”