New Law’s Demands on Doctors Have Many Seeking a Network

By Abby Goodnough
The New York Times, March 2, 2014

Dr. Sven Jonsson, a primary care physician in this rural community, is seeing a steady tide of new patients under President Obama’s health care law, the Affordable Care Act. And so far, it is working out for him. His employer, a big hospital system, provides expensive equipment, takes care of bureaucratic chores and has buffered him from the turmoil of his rapidly changing business.

About 25 miles away in the more affluent suburb of Crestwood, Dr. Tracy Ragland, 46, an independent primary care physician, is more anxious about the future of her small practice. The law is bringing new regulations and payment rates that she says squeeze self-employed doctors. She cherishes the autonomy of private practice and speaks darkly of the rush of independent physicians into hospital networks, which she sees as growing monopolies.

(Dr. Ragland) said that she embraced the goal of extending health coverage to far more Americans, but that Medicaid paid too poorly for her to treat any of the new enrollees. And while she is accepting some of the private plans sold through Kentucky’s new online insurance exchange, she has rejected others — again, because she considers the payment too low.

Dr. Jonsson owned his practice in Louisville for a decade — and did not accept Medicaid, for the same reasons that Dr. Ragland generally does not — but sold it in 2010, months after the Affordable Care Act passed. He did so, he said, expressly out of concern that the law and related requirements were about to ratchet up the pressures and expense of private practice. In particular, he dreaded having to buy and learn how to use an electronic records system, not only because such systems are expensive but because doctors’ productivity slows down while they are learning the computerized systems, threatening tight margins.

Only about 40 percent of family doctors and pediatricians remain independent, according to the American Medical Association — and many, including Dr. Ragland, feel that harsh economic winds that were already pushing against them have been accelerated by the Affordable Care Act.

Dr. Jonsson is less mired in the daily worries of running a medical business. His hospital system (Baptist Health), with far more bargaining power than a private practice, negotiates with insurers on his behalf, pays his overhead and malpractice insurance, and handles much of the ever-expanding paperwork. It provides him with an X-ray machine and a costly system for keeping digital patient records, a move encouraged by the new law. He has been able to take his first long vacations in years, including a recent month in his native South Africa.

Since the passage of the act in 2010, hospital systems have been acquiring physician practices to shore up their market positions and form networks to take advantage of incentives under the new law. For now, Baptist is taking a financial hit by putting so many doctors on staff: Moody’s Investors Service downgraded its credit rating in September, citing “increased losses from an aggressive and rapid physician employment strategy.”

Baptist enlisted about a dozen of its primary care providers in the Louisville region to take on new Medicaid patients, officials there said, both to get more paying customers in the door and, as a nonprofit system with a stated charitable mission, to help more of Kentucky’s poor get medical care under the law.

Comment:

By Don McCanne, MD

The primary care practices of Dr. Sven Jonsson and Dr. Tracy Ragland described in this article are not merely anecdotal. They are truly representative of major changes taking place in the financing of primary care today. Is this change a disruptive innovation that will deliver on the promise of an expanded primary care infrastructure with higher quality and lower costs? Let’s take a closer look.

How disruptive is this? Both Dr. Jonsson and Dr. Ragland practice in free standing clinics with only a few associates. They see similar patients with acute and chronic care needs. Previously they both felt that they could not afford to accept Medicaid patients because of the very low payment rates under their state Medicaid program. Since becoming employed by Baptist Health, Dr. Jonsson now includes Medicaid patients in his practice, whereas Dr. Ragland, who continues with her traditional primary care practice, still does not accept Medicaid patients and, furthermore, does not accept patients who are now insured through certain plans in Kentucky’s new insurance exchange – plans that have payment rates which she considers too low for her practice.

Although their practices are very similar, Dr. Jonsson is the more contented physician. He simply practices medicine without the economic concerns that he formerly faced. Dr. Ragland still has these concerns.

The difference is that Dr. Jonsson, along with his Medicaid patients and patients covered by exchange plans, are benefiting from the consolidation that is taking place in the health care delivery system in which hospitals and physicians are merging. These consolidated systems are able to extract greater concessions from the insurers since they become “must have” organizations when the insurers establish their provider networks.

Dr. Jonsson’s association with Baptist Health – a nonprofit health care organization with a charitable mission of caring for the poor – seems to be an ideal arrangement for meeting the health care needs of the community. So what could be wrong?

The obvious reason that Dr. Jonsson is personally financially secure in spite of seeing Medicaid patients is that Baptist Health is paying him more than he would be receiving from Medicaid or the exchange plans. How is that working? Moody’s Investors Service has downgraded Baptist Health’s credit rating citing “increased losses from an aggressive and rapid physician employment strategy.”

Under our current fragmented, dysfunctional financing system, when hospitals and physicians are trying to do the right thing, it still isn’t working in spite of the enactment of the Affordable Care Act. The current flux in primary care financing is highly unstable and likely will continue to be disruptive to traditional primary care practices. For those who say good riddance, realize two things: 1) prices are higher in the consolidated systems and will not be tolerated for long, and 2) traditional primary care practices, including community health centers, provide essential community health care services in regions often not attractive to large, consolidated health systems.

If we switched everyone to Medicare right now, the system would work, though many problems would remain because of the deficiencies in Medicare. On the other hand, if we created a well designed single payer system (an improved Medicare for all) our financing problems would be solved, and we could get on with repairing our health care delivery system – one in which both Dr. Jonsson and Dr. Ragland would take pride in their ability to meet the health care needs of their patients.

New Law’s Demands on Doctors Have Many Seeking a Network

By Abby Goodnough
The New York Times, March 2, 2014

Dr. Sven Jonsson, a primary care physician in this rural community, is seeing a steady tide of new patients under President Obama’s health care law, the Affordable Care Act. And so far, it is working out for him. His employer, a big hospital system, provides expensive equipment, takes care of bureaucratic chores and has buffered him from the turmoil of his rapidly changing business.

About 25 miles away in the more affluent suburb of Crestwood, Dr. Tracy Ragland, 46, an independent primary care physician, is more anxious about the future of her small practice. The law is bringing new regulations and payment rates that she says squeeze self-employed doctors. She cherishes the autonomy of private practice and speaks darkly of the rush of independent physicians into hospital networks, which she sees as growing monopolies.

(Dr. Ragland) said that she embraced the goal of extending health coverage to far more Americans, but that Medicaid paid too poorly for her to treat any of the new enrollees. And while she is accepting some of the private plans sold through Kentucky’s new online insurance exchange, she has rejected others — again, because she considers the payment too low.

Dr. Jonsson owned his practice in Louisville for a decade — and did not accept Medicaid, for the same reasons that Dr. Ragland generally does not — but sold it in 2010, months after the Affordable Care Act passed. He did so, he said, expressly out of concern that the law and related requirements were about to ratchet up the pressures and expense of private practice. In particular, he dreaded having to buy and learn how to use an electronic records system, not only because such systems are expensive but because doctors’ productivity slows down while they are learning the computerized systems, threatening tight margins.

Only about 40 percent of family doctors and pediatricians remain independent, according to the American Medical Association — and many, including Dr. Ragland, feel that harsh economic winds that were already pushing against them have been accelerated by the Affordable Care Act.

Dr. Jonsson is less mired in the daily worries of running a medical business. His hospital system (Baptist Health), with far more bargaining power than a private practice, negotiates with insurers on his behalf, pays his overhead and malpractice insurance, and handles much of the ever-expanding paperwork. It provides him with an X-ray machine and a costly system for keeping digital patient records, a move encouraged by the new law. He has been able to take his first long vacations in years, including a recent month in his native South Africa.

Since the passage of the act in 2010, hospital systems have been acquiring physician practices to shore up their market positions and form networks to take advantage of incentives under the new law. For now, Baptist is taking a financial hit by putting so many doctors on staff: Moody’s Investors Service downgraded its credit rating in September, citing “increased losses from an aggressive and rapid physician employment strategy.”

Baptist enlisted about a dozen of its primary care providers in the Louisville region to take on new Medicaid patients, officials there said, both to get more paying customers in the door and, as a nonprofit system with a stated charitable mission, to help more of Kentucky’s poor get medical care under the law.

http://www.nytimes.com/2014/03/03/us/new-laws-demands-on-doctors-have-ma…

The primary care practices of Dr. Sven Jonsson and Dr. Tracy Ragland described in this article are not merely anecdotal. They are truly representative of major changes taking place in the financing of primary care today. Is this change a disruptive innovation that will deliver on the promise of an expanded primary care infrastructure with higher quality and lower costs? Let’s take a closer look.

How disruptive is this? Both Dr. Jonsson and Dr. Ragland practice in free standing clinics with only a few associates. They see similar patients with acute and chronic care needs. Previously they both felt that they could not afford to accept Medicaid patients because of the very low payment rates under their state Medicaid program. Since becoming employed by Baptist Health, Dr. Jonsson now includes Medicaid patients in his practice, whereas Dr. Ragland, who continues with her traditional primary care practice, still does not accept Medicaid patients and, furthermore, does not accept patients who are now insured through certain plans in Kentucky’s new insurance exchange – plans that have payment rates which she considers too low for her practice.

Although their practices are very similar, Dr. Jonsson is the more contented physician. He simply practices medicine without the economic concerns that he formerly faced. Dr. Ragland still has these concerns.

The difference is that Dr. Jonsson, along with his Medicaid patients and patients covered by exchange plans, are benefiting from the consolidation that is taking place in the health care delivery system in which hospitals and physicians are merging. These consolidated systems are able to extract greater concessions from the insurers since they become “must have” organizations when the insurers establish their provider networks.

Dr. Jonsson’s association with Baptist Health – a nonprofit health care organization with a charitable mission of caring for the poor – seems to be an ideal arrangement for meeting the health care needs of the community. So what could be wrong?

The obvious reason that Dr. Jonsson is personally financially secure in spite of seeing Medicaid patients is that Baptist Health is paying him more than he would be receiving from Medicaid or the exchange plans. How is that working? Moody’s Investors Service has downgraded Baptist Health’s credit rating citing “increased losses from an aggressive and rapid physician employment strategy.”

Under our current fragmented, dysfunctional financing system, when hospitals and physicians are trying to do the right thing, it still isn’t working in spite of the enactment of the Affordable Care Act. The current flux in primary care financing is highly unstable and likely will continue to be disruptive to traditional primary care practices. For those who say good riddance, realize two things: 1) prices are higher in the consolidated systems and will not be tolerated for long, and 2) traditional primary care practices, including community health centers, provide essential community health care services in regions often not attractive to large, consolidated health systems.

If we switched everyone to Medicare right now, the system would work, though many problems would remain because of the deficiencies in Medicare. On the other hand, if we created a well designed single payer system (an improved Medicare for all) our financing problems would be solved, and we could get on with repairing our health care delivery system – one in which both Dr. Jonsson and Dr. Ragland would take pride in their ability to meet the health care needs of their patients.

Inpatient Hospital Prices Drive Spending Variation for Episodes of Care for Privately Insured Patients

By Chapin White, James D. Reschovsky, Amelia M. Bond
National Institute for Health Care Reform, February 2014

When including all care related to a hospitalization — for example, a knee or hip replacement — the price of the initial inpatient stay explains almost all of the wide variation from hospital to hospital in spending on so-called episodes of care, according to a study by researchers at the former Center for Studying Health System Change (HSC) based on 2011 claims data for 590,000 active and retired nonelderly autoworkers and dependents. For example, average spending for uncomplicated inpatient knee and hip replacements ranged across 36 hospitals from less than $17,500 to $37,000 for an episode of care that included all services during the inpatient stay and all follow-up care within 30 days of discharge. The pattern of spending variation for knee and hip replacements held true for other conditions, with hospital inpatient price differences accounting for the vast majority of spending variation rather than differences in spending on physician and other non-hospital services during and after discharge or spending on readmissions. Moreover, hospitals’ case-mix-adjusted relative spending per episode for different service lines — for example, orthopedics and cardiology — tend to be highly correlated with each other. Understanding why spending for episodes of care varies so much among hospitals can help private purchasers accurately target ways to control spending. This study’s findings — inpatient prices drive the bulk of episode-spending variation and hospitals with high spending for one service line tend to have high spending for other service lines — indicate that private purchasers can focus on hospitals’ overall inpatient price levels rather than pursue bundled payments for episodes of care or service-line-specific purchasing strategies.

To Bundle or Not to Bundle…

In Medicare, there is a compelling case for bundled payments — wide variations in post-acute care use are the main factor behind differences between high- and low-spending geographic regions and between high- and low-spending hospitals. Moreover, Medicare patients often have multiple chronic conditions that are complex to manage. But the results of this analysis show that the case for bundled hospital payments for the privately insured is much weaker — post-acute care and other ancillary services account for a relatively small share of overall spending on hospitalization episodes, and they account for almost none of the variation in episode spending from one hospital to another.

Implications for Private Purchasers

It remains to be seen whether, going forward, the tools available to private purchasers — tiered benefits, reference pricing, and so on — can counteract hospitals’ significant market power. Other more dramatic interventions, such as state-based hospital rate setting, or offering a “public option” that uses administered pricing through the state health insurance exchanges are options, albeit unlikely in most states to gain traction.

http://www.nihcr.org/Episode-Spending-Variation

Comment:

By Don McCanne, MD

Rather than relying on proven methods of controlling health care costs through government administered pricing, the Affordable Care Act (ACA) relies on private sector integration of the health care delivery system through entities such as accountable care organizations. One of the mechanisms promoted by ACA is bundled payments – paying a single pre-set amount for all services associated with a single hospital episode of care such as a joint replacement. Will bundled payments adequately control our health care spending?

This study shows that, for private patients, the upper end of the wide variation in spending between hospitals is driven by high prices which permeate all of the hospitals’ service lines. For those services amenable to bundling, such as joint replacement, most of the services provided are related to the specific episode and thus do not vary much between hospitals. Post-acute care and other ancillary services which might otherwise be pared back with bundling are such a small part of the overall services that bundling cannot save money by reducing the volume of services connected to the episode.

Since it is the high prices of the standard services that are a problem, attacking only those services that are bundled will not save much since high prices throughout the rest of the hospital are left undisturbed or even increased some to offset any price concessions for the bundled services.

This article mentions that there is a case for bundled payments under Medicare since these more complex patients have wide variations in acute and post-acute care, providing more flexibility in controlling the volume of services. Prices are already controlled through the Medicare prospective payment system, which, to a limited degree, represents a form of bundling (think DRGs).

Other nations, even if using private insurers, utilize rigid government price setting through one form or another. The authors of this report suggest that state-based hospital rate setting or government administered pricing would not likely gain traction. Yet “bundling” all hospital spending through global hospital budgets (like fire or police department budgets), as part of a single payer system, is precisely what we need. Let’s give it traction.

Inpatient Hospital Prices Drive Spending Variation for Episodes of Care for Privately Insured Patients

By Chapin White, James D. Reschovsky, Amelia M. Bond
National Institute for Health Care Reform, February 2014

When including all care related to a hospitalization — for example, a knee or hip replacement — the price of the initial inpatient stay explains almost all of the wide variation from hospital to hospital in spending on so-called episodes of care, according to a study by researchers at the former Center for Studying Health System Change (HSC) based on 2011 claims data for 590,000 active and retired nonelderly autoworkers and dependents. For example, average spending for uncomplicated inpatient knee and hip replacements ranged across 36 hospitals from less than $17,500 to $37,000 for an episode of care that included all services during the inpatient stay and all follow-up care within 30 days of discharge. The pattern of spending variation for knee and hip replacements held true for other conditions, with hospital inpatient price differences accounting for the vast majority of spending variation rather than differences in spending on physician and other non-hospital services during and after discharge or spending on readmissions. Moreover, hospitals’ case-mix-adjusted relative spending per episode for different service lines — for example, orthopedics and cardiology — tend to be highly correlated with each other. Understanding why spending for episodes of care varies so much among hospitals can help private purchasers accurately target ways to control spending. This study’s findings — inpatient prices drive the bulk of episode-spending variation and hospitals with high spending for one service line tend to have high spending for other service lines — indicate that private purchasers can focus on hospitals’ overall inpatient price levels rather than pursue bundled payments for episodes of care or service-line-specific purchasing strategies.

To Bundle or Not to Bundle…

In Medicare, there is a compelling case for bundled payments — wide variations in post-acute care use are the main factor behind differences between high- and low-spending geographic regions and between high- and low-spending hospitals. Moreover, Medicare patients often have multiple chronic conditions that are complex to manage. But the results of this analysis show that the case for bundled hospital payments for the privately insured is much weaker — post-acute care and other ancillary services account for a relatively small share of overall spending on hospitalization episodes, and they account for almost none of the variation in episode spending from one hospital to another.

Implications for Private Purchasers

It remains to be seen whether, going forward, the tools available to private purchasers — tiered benefits, reference pricing, and so on — can counteract hospitals’ significant market power. Other more dramatic interventions, such as state-based hospital rate setting, or offering a “public option” that uses administered pricing through the state health insurance exchanges are options, albeit unlikely in most states to gain traction.

http://www.nihcr.org/Episode-Spending-Variation

Rather than relying on proven methods of controlling health care costs through government administered pricing, the Affordable Care Act (ACA) relies on private sector integration of the health care delivery system through entities such as accountable care organizations. One of the mechanisms promoted by ACA is bundled payments – paying a single pre-set amount for all services associated with a single hospital episode of care such as a joint replacement. Will bundled payments adequately control our health care spending?

This study shows that, for private patients, the upper end of the wide variation in spending between hospitals is driven by high prices which permeate all of the hospitals’ service lines. For those services amenable to bundling, such as joint replacement, most of the services provided are related to the specific episode and thus do not vary much between hospitals. Post-acute care and other ancillary services which might otherwise be pared back with bundling are such a small part of the overall services that bundling cannot save money by reducing the volume of services connected to the episode.

Since it is the high prices of the standard services that are a problem, attacking only those services that are bundled will not save much since high prices throughout the rest of the hospital are left undisturbed or even increased some to offset any price concessions for the bundled services.

This article mentions that there is a case for bundled payments under Medicare since these more complex patients have wide variations in acute and post-acute care, providing more flexibility in controlling the volume of services. Prices are already controlled through the Medicare prospective payment system, which, to a limited degree, represents a form of bundling (think DRGs).

Other nations, even if using private insurers, utilize rigid government price setting through one form or another. The authors of this report suggest that state-based hospital rate setting or government administered pricing would not likely gain traction. Yet “bundling” all hospital spending through global hospital budgets (like fire or police department budgets), as part of a single payer system, is precisely what we need. Let’s give it traction.

Connected health and the rise of the patient-consumer: How to achieve better care at a lower cost? 

By William Frist
Health Affairs, February 2014

America’s health care delivery sector stands at a tipping point—a convergence of a growing, graying, and highly consumptive population with increasingly limited financial and human capital resources.

Policy makers naturally gravitate toward government to provide the framework for solutions to this worsening scenario…. I’ve spent about equal time in government and the private health sector, and I believe there are two other levers that are more likely to be effective.

The first lever is the rapid ascent of the newly empowered consumer, equipped for the first time with actionable knowledge that can affect his or her health. The second consists of magnificent advances in information technology (IT). The exponential growth and application of these technologies are revolutionizing, in a very short period of time, the automation, connectivity, decision support, and mining of health information and data, which together will radically transform and improve health care delivery.

These two forces are just beginning to come of age. Neither was a significant driver of health care value just three years ago. Today their potential is enormous. Together, the empowered consumer and rapidly advancing health IT will channel our chaotic, fragmented, and wasteful health care sector toward a more seamless, transparent, accountable, and efficient system. They will answer the underlying question of how we will get better care for less cost. They will be the primary keys for game-changing, value-driven reform, where provider compensation and payments are determined not by the type and number of specific services rendered but by the quality and outcomes of care provided. 

…. Government is slow to change and even slower to self-correct. …But what America needs now is more health for less money…. And in that effort, the newly empowered consumer is likely to lead the way. 

http://content.healthaffairs.org/content/33/2/191.full

****

Comment:

By Kip Sullivan, JD

In this article, William Frist, a former Republican senator from Tennessee, claims “the newly empowered consumer” will play the leading role in health care reform. According to Frist, “consumers” recently acquired immense power thanks to “magnificent advances in information technology (IT).” The “empowered consumer” aided by health IT will lead us to a “more seamless, transparent, accountable and efficient system.” 

Why couldn’t Frist lower his decibel level a notch and simply call our attention to recent developments in HIT that have some potential to improve health and perhaps lower costs? Why all the undocumented hype?

In Frist’s case, it appears his conservative ideology is at work. He notes early in his paper that government is pokey and cannot be expected to play a leading role in health care reform. If he can draw readers into his fantasies about patients with the powers of comic book figures, readers might be less likely to ask government to play a leading role in solving the health care crisis.

But Frist’s conservative values can’t be the entire explanation because thousands of American health policy experts with no discernible political leanings, and many Democrats, talk just like him. Frist’s article represents a common style of argument utilized by American health policy researchers as well as the politicians who listen to them. Hillary Clinton, Tom Daschle, Newt Gingrich and Tommy Thompson are other examples of politicians who have been influenced by managed-care speak.

In the rest of this comment I will use Frist’s paper as a case study with which to elucidate three key elements of this style.

First, the subjects of discussion – the mechanisms that will allegedly ameliorate the crisis – are described so abstractly it is difficult to know how to refute or confirm the claims made for them. The “accountable care organization” is a prominent example. The “empowered consumer” is another. Frist offers us not one example of how any of us would know if we fall into the category of “empowered,” and he is vague about how “rapidly advancing health IT” will confer “power” upon patients.

If Frist had simply argued that Americans are becoming more knowledgeable about their health, we might quibble about how true that is but we wouldn’t be baffled by his argument. But he speaks of more “power,” not more knowledge. Does he mean that thanks to growing access to medical records via computers, for example, that patients now have the power to browbeat insurance companies into paying for their medical care if the insurance company refuses? Does he mean that because of the numerous apps one can buy to monitor calories consumed, steps walked per day, etc. that patients have the power to force drug companies and hospitals to lower their prices?

A second characteristic of managed-care speak is the use of value-laden labels to refer to the aforementioned amorphous concepts. As Ted Marmor has noted on numerous occasions, and as he and Jonathan Oberlander noted in a recent paper http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3514994, the vague concepts advanced by American health policy experts often bear labels designed to persuade rather than enlighten. “Empowered consumers” and “seamless” care are two examples from Frist’s paper. “Accountable care,” “coordinated care,” and “integrated delivery systems” are common examples one could find in myriad other articles. What do those labels mean? And who could be in favor of their opposites, for example, “unaccountable care” or “disempowered patients”?

A third common feature of the style I’m talking about is the confidence with which conclusions are asserted even though no evidence is marshaled to support the claim, or the evidence cited is incomplete, cherry-picked, or flat wrong. In Frist’s case, he could have limited his argument to a simple statement that the spread of electronic medical records and mobile phones and the invention of numerous apps might create a better informed patient among the segment of the population that can afford access to the Internet and myriad apps. But he did not do that. Instead he got out his trumpet and heralded the coming of a new age.

Those three features – poorly defined concepts, value-laden names for these concepts, and exaggerated claims for them – coupled with their ubiquitousness are lethal for busy readers, especially busy politicians who don’t have time to give definitions a reality check and to read papers cited in endnotes to see if they say what the writer said they said. The net effect is a form “truthiness,” to borrow Stephen Colbert’s wonderful label for claims that seem to be true but aren’t.  http://www.merriam-webster.com/info/06words.htm

This “truthiness” – the illusion that what experts like Frist say is based on science – is a major obstacle to a productive public debate about how to solve the health care crisis, and to the enactment of a single-payer system. It lends cover to politicians who want to take single-payer off the table.

Association Between Participation in a Multipayer Medical Home Intervention and Changes in Quality, Utilization, and Costs of Care

By Mark W. Friedberg, MD, MPP; Eric C. Schneider, MD, MSc; Meredith B. Rosenthal, PhD; Kevin G. Volpp, MD, PhD; Rachel M. Werner, MD, PhD
JAMA, February 26, 2014

Abstract

Importance:  Interventions to transform primary care practices into medical homes are increasingly common, but their effectiveness in improving quality and containing costs is unclear.

Objective:  To measure associations between participation in the Southeastern Pennsylvania Chronic Care Initiative, one of the earliest and largest multipayer medical home pilots conducted in the United States, and changes in the quality, utilization, and costs of care.

Design, Setting, and Participants:  Thirty-two volunteering primary care practices participated in the pilot (conducted from June 1, 2008, to May 31, 2011). We surveyed pilot practices to compare their structural capabilities at the pilot’s beginning and end. Using claims data from 4 participating health plans, we compared changes (in each year, relative to before the intervention) in the quality, utilization, and costs of care delivered to 64 243 patients who were attributed to pilot practices and 55 959 patients attributed to 29 comparison practices (selected for size, specialty, and location similar to pilot practices) using a difference-in-differences design.

Exposures:  Pilot practices received disease registries and technical assistance and could earn bonus payments for achieving patient-centered medical home recognition by the National Committee for Quality Assurance (NCQA).

Main Outcomes and Measures:  Practice structural capabilities; performance on 11 quality measures for diabetes, asthma, and preventive care; utilization of hospital, emergency department, and ambulatory care; standardized costs of care.

Results:  Pilot practices successfully achieved NCQA recognition and adopted new structural capabilities such as registries to identify patients overdue for chronic disease services. Pilot participation was associated with statistically significantly greater performance improvement, relative to comparison practices, on 1 of 11 investigated quality measures: nephropathy screening in diabetes (adjusted performance of 82.7% vs 71.7% by year 3, P < .001). Pilot participation was not associated with statistically significant changes in utilization or costs of care. Pilot practices accumulated average bonuses of $92 000 per primary care physician during the 3-year intervention.

Conclusions and Relevance:  A multipayer medical home pilot, in which participating practices adopted new structural capabilities and received NCQA certification, was associated with limited improvements in quality and was not associated with reductions in utilization of hospital, emergency department, or ambulatory care services or total costs over 3 years. These findings suggest that medical home interventions may need further refinement.

http://jama.jamanetwork.com/article.aspx?articleid=1832540

****

The Medical Home’s Impact on Cost & Quality: An Annual Update of the Evidence, 2012-2013

By Marci Nielsen, PhD, MPH, J. Nwando Olayiwola, MD, MPH Paul Grundy, MD, MPH, Kevin Grumbach, MD
Patient-Centered Primary Care Collaborative, January 2014

A summary of key points from this year’s report include:

1.  PCMH (Patient-Centered Medical Home) studies continue to demonstrate impressive improvements across a broad range of categories including: cost, utilization, population health, prevention, access to care, and patient satisfaction, while a gap still exists in reporting impact on clinician satisfaction.

2.  The PCMH continues to play a role in strengthening the larger health care system, specifically Accountable Care Organizations and the emerging medical neighborhood model.

3.  Significant payment reforms are incorporating the PCMH and its key attributes.

Although the evidence is early from an academic perspective, and this report does not represent a formal peer-reviewed meta-analysis of the literature, the expanding body of research provided here suggests that when fully transformed primary care practices have embraced the PCMH model of care, we find a number of consistent, positive outcomes.

http://www.pcpcc.org/resource/medical-homes-impact-cost-quality

Comment:

Don McCanne, M.D.

Imagine doing away with all primary care professionals. Patients would select a specialist depending on their specific presenting symptoms: an otolaryngologist for a cold, a surgeon for a minor laceration, a neurologist for a headache, or a gastroenterologist for an acute diarrhea. Of course, that’s ridiculous. Primary care is not a concept that we have to sell to the public. Virtually everyone accepts it as a given.

So what is the Patient-Centered Medical Home (PCMH) and how does it differ from primary care? This RAND study published in the current issue of JAMA provides enough information that we can say that, for practical purposes, there is no difference.

The primary care practices studied by RAND received a stamp of approval from the National Committee for Quality Assurance (NCQA) and received bonuses for accomplishing that goal. Other than that, when compared to similar practices, they proved to be slightly better on only one of eleven quality measures and showed no reductions in utilization of hospital, emergency department, or ambulatory care services or in total costs over the 3 years of the study.

Various commentaries on this study have suggested that the reason that the study group did not do better was that the PCMH is more appropriate for people with complex, chronic problems. Only then would we expect to see improved outcomes. Really? If this effort to reinforce our primary care infrastructure is to be designed to take care of the sickest patents only, then where do the relatively healthy go? Directly to the specialists?

It has also been speculated that the practices volunteering for the study were already high-performing practices and thus did not have much room for further improvement. If that were the case, then why did the control practices do just as well?

Rather than criticizing the disappointing performance of the NCQA-recognized primary care practices, we should acknowledge that the comparison practices were providing the same efficiency and quality of care that was being provided by these selected practices. Although some might quibble with the terminology, our primary care practices are already functioning as patient-centered medical homes!

It is true that we need to reinforce primary care. The latest report from the Patient-Centered Primary Care Collaborative suggests that we can strengthen primary care, though the improvements that they report have not been subjected to “a formal peer-reviewed meta-analysis of the literature.” But more important, the reinforcement that we urgently need is to expand the primary care infrastructure, both geographically to provide better access, and through the greater use of non-physician primary care professionals, especially nurse practitioners.

Another interesting observation about this RAND study is that it was conducted using our multi-payer system – a system well documented to be inefficient, and one that is driven more by business interests rather than patient-service interests. Although we need more than just a single payer system to improve our primary care infrastructure, it would be a gigantic and crucially important first step in establishing a single public system that would enable further improvements in primary care, where patients come first.

Association Between Participation in a Multipayer Medical Home Intervention and Changes in Quality, Utilization, and Costs of Care

By Mark W. Friedberg, MD, MPP; Eric C. Schneider, MD, MSc; Meredith B. Rosenthal, PhD; Kevin G. Volpp, MD, PhD; Rachel M. Werner, MD, PhD
JAMA, February 26, 2014

Abstract

Importance:  Interventions to transform primary care practices into medical homes are increasingly common, but their effectiveness in improving quality and containing costs is unclear.

Objective:  To measure associations between participation in the Southeastern Pennsylvania Chronic Care Initiative, one of the earliest and largest multipayer medical home pilots conducted in the United States, and changes in the quality, utilization, and costs of care.

Design, Setting, and Participants:  Thirty-two volunteering primary care practices participated in the pilot (conducted from June 1, 2008, to May 31, 2011). We surveyed pilot practices to compare their structural capabilities at the pilot’s beginning and end. Using claims data from 4 participating health plans, we compared changes (in each year, relative to before the intervention) in the quality, utilization, and costs of care delivered to 64 243 patients who were attributed to pilot practices and 55 959 patients attributed to 29 comparison practices (selected for size, specialty, and location similar to pilot practices) using a difference-in-differences design.

Exposures:  Pilot practices received disease registries and technical assistance and could earn bonus payments for achieving patient-centered medical home recognition by the National Committee for Quality Assurance (NCQA).

Main Outcomes and Measures:  Practice structural capabilities; performance on 11 quality measures for diabetes, asthma, and preventive care; utilization of hospital, emergency department, and ambulatory care; standardized costs of care.

Results:  Pilot practices successfully achieved NCQA recognition and adopted new structural capabilities such as registries to identify patients overdue for chronic disease services. Pilot participation was associated with statistically significantly greater performance improvement, relative to comparison practices, on 1 of 11 investigated quality measures: nephropathy screening in diabetes (adjusted performance of 82.7% vs 71.7% by year 3, P < .001). Pilot participation was not associated with statistically significant changes in utilization or costs of care. Pilot practices accumulated average bonuses of $92 000 per primary care physician during the 3-year intervention.

Conclusions and Relevance:  A multipayer medical home pilot, in which participating practices adopted new structural capabilities and received NCQA certification, was associated with limited improvements in quality and was not associated with reductions in utilization of hospital, emergency department, or ambulatory care services or total costs over 3 years. These findings suggest that medical home interventions may need further refinement.

http://jama.jamanetwork.com/article.aspx?articleid=1832540

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The Medical Home’s Impact on Cost & Quality: An Annual Update of the Evidence, 2012-2013

By Marci Nielsen, PhD, MPH, J. Nwando Olayiwola, MD, MPH Paul Grundy, MD, MPH, Kevin Grumbach, MD
Patient-Centered Primary Care Collaborative, January 2014

A summary of key points from this year’s report include:

1.  PCMH (Patient-Centered Medical Home) studies continue to demonstrate impressive improvements across a broad range of categories including: cost, utilization, population health, prevention, access to care, and patient satisfaction, while a gap still exists in reporting impact on clinician satisfaction.

2.  The PCMH continues to play a role in strengthening the larger health care system, specifically Accountable Care Organizations and the emerging medical neighborhood model.

3.  Significant payment reforms are incorporating the PCMH and its key attributes.

Although the evidence is early from an academic perspective, and this report does not represent a formal peer-reviewed meta-analysis of the literature, the expanding body of research provided here suggests that when fully transformed primary care practices have embraced the PCMH model of care, we find a number of consistent, positive outcomes.

http://www.pcpcc.org/resource/medical-homes-impact-cost-quality

Imagine doing away with all primary care professionals. Patients would select a specialist depending on their specific presenting symptoms: an otolaryngologist for a cold, a surgeon for a minor laceration, a neurologist for a headache, or a gastroenterologist for an acute diarrhea. Of course, that’s ridiculous. Primary care is not a concept that we have to sell to the public. Virtually everyone accepts it as a given.

So what is the Patient-Centered Medical Home (PCMH) and how does it differ from primary care? This RAND study published in the current issue of JAMA provides enough information that we can say that, for practical purposes, there is no difference.

The primary care practices studied by RAND received a stamp of approval from the National Committee for Quality Assurance (NCQA) and received bonuses for accomplishing that goal. Other than that, when compared to similar practices, they proved to be slightly better on only one of eleven quality measures and showed no reductions in utilization of hospital, emergency department, or ambulatory care services or in total costs over the 3 years of the study.

Various commentaries on this study have suggested that the reason that the study group did not do better was that the PCMH is more appropriate for people with complex, chronic problems. Only then would we expect to see improved outcomes. Really? If this effort to reinforce our primary care infrastructure is to be designed to take care of the sickest patents only, then where do the relatively healthy go? Directly to the specialists?

It has also been speculated that the practices volunteering for the study were already high-performing practices and thus did not have much room for further improvement. If that were the case, then why did the control practices do just as well?

Rather than criticizing the disappointing performance of the NCQA-recognized primary care practices, we should acknowledge that the comparison practices were providing the same efficiency and quality of care that was being provided by these selected practices. Although some might quibble with the terminology, our primary care practices are already functioning as patient-centered medical homes!

It is true that we need to reinforce primary care. The latest report from the Patient-Centered Primary Care Collaborative suggests that we can strengthen primary care, though the improvements that they report have not been subjected to “a formal peer-reviewed meta-analysis of the literature.” But more important, the reinforcement that we urgently need is to expand the primary care infrastructure, both geographically to provide better access, and through the greater use of non-physician primary care professionals, especially nurse practitioners.

Another interesting observation about this RAND study is that it was conducted using our multi-payer system – a system well documented to be inefficient, and one that is driven more by business interests rather than patient-service interests. Although we need more than just a single payer system to improve our primary care infrastructure, it would be a gigantic and crucially important first step in establishing a single public system that would enable further improvements in primary care, where patients come first.