Are Medical Homes an Answer to Health Care’s Cost Problem?

November 25, 2014 · Margaret E. O'Kane

Patient-centered medical homes (PCMHs) have long been thought to reduce health care costs. A new study published in the journal Health Services Research, confirms that they actually do.

The study looked at PCMHs recognized by NCQA, as well as practices that are not – referred to as the “comparison group.” It found that PCMHs with the NCQA seal had lower payments from Medicare (saving money for the program), less money spent on urgent or acute care and fewer overall visits to the emergency department (ED) amongst the patients they saw.

PCMHs strive “to deliver greater coordination of care through provider teamwork, patient communication, care management, and technology,” and report after report has shown that they accomplish this.

The latest study demonstrates the quantifiable effect PCMHs can have in reducing overall costs. Contrasted against the “comparison group,” NCQA-recognized PCMHs reduced Medicare payments by an average of $325 per patient, and potentially avoidable visits to surgical specialists dropped by 3 percent.

The study also shows that PCMHs are keeping patients out of ED. For PCMHs with the NCQA seal, visits to the ED went down by 7 percent across practice sizes. The result? Cost savings. The authors found that because of this decrease in nights their patients spend in the ED, Medicare payments are 5% lower in NCQA-recognized PCMHs. The practices proved particularly effective for high-cost, sicker than average patients, reducing hospitalizations among this subset by 4 percent, according to the study.

Cutting costs in health care gets a lot of attention nowadays, and for good reason. By rethinking the model we use to provide care to patients, and the way we receive care as patients, PCMHs are producing tangible improvements in patient satisfaction and costs. It’s what many of us have been saying for a long time: The successful mode of low-cost, high-quality care is patient-centric.


A version of this essay appeared in the November print edition of Modern Healthcare.

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