This issue of Ingenix Innovations offers the first of a two-part series on the “medical home” concept, which has evolved over several decades and is claiming the spotlight as health care industry stakeholders look for ways to help patients better navigate complex care decisions and experiences. Implementation of the model offers both promise and challenge, as entities critically examine current practices, consider new approaches and navigate a complex selection of support technologies.

Patient-centric Medical Home May Improve Care,
Reduce Costs

Many patients, particularly those with chronic conditions, report that their treatment is fragmented, with no one doctor in charge of their overall wellness. In turn, the primary care physicians who treat these patients are receiving decreasing reimbursement for these patients’ care, which has led to a shortage of physicians in this practice area.

“Health care is broken, with gaps in quality patient care, and the primary care field in crisis,” according to Tom Knabel, M.D., vice president, Medical Informatics at Ingenix Consulting. “Although the current reimbursement paradigm favors acute care over preventive care, some of the highest costs to the system come from poorly managed chronic conditions,” he said.

And, according to Michael Cousins, Ph.D., vice president, Medical Management at Ingenix Consulting, disease management programs most payers rely on to influence chronic care patient behavior and regimen compliance are largely unproven, and do not necessarily affect patient health status outcomes or reduce costs. “Frankly, we have major problems to resolve in our fractured health care system, and we need to consider new approaches.”

The medical home solution

One approach that is gaining traction in the health care community is the “medical home” concept, which was introduced in the 1960s for specific patient communities. In its current form, it may help all patients navigate complex health care decisions and experiences. In addition, the model may provide physicians with incentives for serving as “quarterbacks” for provider teams, and offer payers a way to appropriately monitor costs and improve outcomes.

“The goal of the ‘medical home’ today is to change the reliance on patients to communicate every piece of relevant information to all of their caregivers,” Knabel said. “Patients want their doctors to communicate with each other directly. The medical home can serve as the one place where all of the patient’s information is coordinated, and where one physician has access to his or her full history and activities.”

When examining the potential benefits of the medical home approach, there is general agreement that it could improve the quality and comprehensiveness of primary care, increase patient satisfaction, and improve care transitions and continuity. In addition, the medical home paradigm could revitalize primary care practices by moving to value-based payments, and decrease health care costs by reducing the duplication of services and the need for more expensive care.

Although the medical home approach offers great promise, all parties must proceed cautiously to implement it, Cousins advised. “This is a very complex approach to solving a significant set of problems, so entities may require help to organize, pilot and evaluate program elements,” he said. Cousins added, “These programs require sustained, methodical work and are unlikely to produce quick wins, despite the buzz from some leading industry consultants.”

Medical home concept 40 years in the making

The American Academy of Pediatrics’ (AAP) Council on Pediatric Practice introduced “medical home” terminology in 1967 to help ensure that the overall care of special needs children was well-coordinated.¹ The Council’s position – that every child with chronic disease or disabling illness should have a medical home, with all pertinent information about the child’s condition transmitted to that place – had an impact but did not set AAP policy.²

Over the next several decades, the definition and application of the medical home evolved, but several obstacles remained, including training physicians to understand the concept, communicate findings and coordinate care and services. The paradigm also faced reimbursement issues.³

In the 1990s, the era of managed care, “everyone had a primary care physician who was supposed to direct their total care,” Knabel explained, but that role ultimately devolved into the physician serving only as an administrative gatekeeper. “Once a referral was made, there was little expectation for the primary care physician to take responsibility for managing that patient’s care.”

The difference between the gatekeeper model of the ‘90s, which most patients disliked, and the modern medical home model, is that the former provided physician incentives for providing less care, and the latter would offer incentives for better care. The medical home model calls for primary care professionals to “provide conventional diagnostic and therapeutic services, as well as coordination of care for patients that require services not available in primary care settings.”⁴

Rather than acting as a gatekeeper, a primary care physician would serve as the central source of information for the patient. “Essentially, this model facilitates and pays for care coordination and proactive communication among providers,” Knabel said. “That may be as simple as having physicians talk to each other when there are referrals, or the medical home physician explicitly supporting the plan of action for a patient who has been discharged.”

Need for a paradigm shift

As health care becomes more fragmented and the cost of chronic conditions skyrockets, stakeholders increasingly are looking for ways to control and reverse these trends. At present, 45 percent of the general population and 83 percent of the Medicare population has a chronic medical condition.⁵ When patients seek treatment, “they enter a system that financially rewards ‘patchwork’ independent episodes of acute care instead of continuous, coordinated care.”⁶This situation requires a long-term strategy that will reduce the costs related to unmanaged chronic conditions: “a disruptive innovation for a new primary care model.”⁷

According to Cousins, in addition to industry-wide calls for health care delivery and payment reform, there are multiple factors that precipitate a primary care model transformation:

• Current, transaction-based models do not recognize the value of or specifically reimburse physicians for individualized comprehensive care management.
• Minimal care management may contribute to the escalation of care into higher-cost settings (e.g., emergency room treatment, inpatient hospitalization and frequent specialist visits).
• Due to decreasing reimbursement for care management, fewer physicians are choosing primary care practice, which reduces patient access and support.
• Referrals to specialists are often not coordinated and managed.
• Resources are lost to duplication of services and poor utilization of technology.
• With few exceptions, member-centric, telephone-based disease management programs do not have a proven record of improving health status and utilization outcomes, and are not directed by a member’s primary care physicians.

Government expanding medical home scope

Federal programs also are likely to put the medical home approach in the spotlight. The Centers for Medicare & Medicaid Services (CMS) has shown recent interest in advancing medical home initiatives. Although CMS has conducted several discreet pilot programs in the past, Section 204 of the Tax Relief and Health Care Act of 2006 requires the Secretary of the Department of Health and Human Services to establish a three-year medical home demonstration project by 2010.

Under the program, currently in its planning stages, CMS would provide a care management fee to physician practices for the services of a “personal physician” providing “targeted, accessible, continuous and coordinated, family-centered care to high need populations.⁸

CMS states that its goals for the program are to improve care management and quality, increase patient and provider satisfaction and reduce costs. The demonstration project’s design is slated to be finalized this fall, with provider recruitment beginning in the spring of 2009 and the project due to start in 2010.⁹

Offering a financial incentive to doctors also may help to grow the medical home movement. For example, doctors participating in North Carolina’s Medicaid medical home program receive a capitated fee on top of their fee-for-service payment, Cousins said, with the goal being that the additional fees would be spent on building the medical home infrastructure while also easing the financial burdens of primary care physicians.

“There is no question that the medical home model is moving forward,” Cousins said. “Payers need to aspire to higher standards of integrated patient care and recognize that they can take the lead in helping to advance the concept.”

¹ Backer, Leigh Ann, “The Medical Home: An Idea Whose Time Has Come … Again,” AAFP Family Practice Management (September 2007).
² Sia, Calvin; Tonniges, Thomas F.; Osterhus, Elizabeth; and Taba, Sharon; “History of the Medical Home Concept,” Pediatrics (Vol. 113, No. 5; pp. 1473-1478) (May 5, 2004).
³Id.
⁴Keckley, Paul H., M.D., “Timeto Address a Chronic Problem in U.S. Health Care,” a letter included in the Deloitte Center for Health Solutions report, The Medical Home: Disruptive Innovation for a New Primary Care Model (2008).
⁵Id.
⁶Kirch, Daniel, “There’s No Place Like the ‘Medical Home,” Medscape Journal of Medicine (Oct. 27, 2008).
⁷Keckley, Paul H., M.D., “Timeto Address a Chronic Problem in U.S. Health Care,” a letter included in the Deloitte Center for Health Solutions report, The Medical Home: Disruptive Innovation for a New Primary Care Model (2008).
⁸Centers for Medicare & Medicaid Services, “Medical Home Demonstration Fact Sheet” (November 2008).
⁹CMS Open Door Forum (Oct. 28, 2008).

This discussion of the “medical home” concept will continue in the November 25 issue of Ingenix Innovations.

Be sure to sign up for future issues of Ingenix Innovations, and visit the archive for recent issues.

Join nationally recognized coding experts December 1-3 at the 8th annual Ingenix Essentials Coding, Billing & Compliance Conference in San Diego, and learn to manage your revenue cycle more accurately and efficiently. Earn up to 16 CEUs from the AAPC, AHIMA and ACMCS. For more information, visit www.shopingenix.com/essentials.