The “medical home” concept has become counterproductive. It is muddling the debate about how to improve medical care without raising costs, and it is punishing primary care clinics.
A recent paper by Ricardo Mosquera et al. illustrates both problems. At the beginning of the paper, the authors assert there is no solid evidence for the claim that “patient-centered medical homes” (PCMHs) cut costs. That assertion is correct. A review of the research on PCMHs published in 2013 found “no evidence for overall cost savings.”
A paper published in 2014 found that “one of the earliest and largest multi-payer medical home pilots conducted in the United States” achieved no savings after three years.
Mosquera et al. then go on to report on a program that appears to have cut costs substantially by spending more on outpatient care and thereby greatly reducing hospital utilization. But they note that the PCMH can only cut costs under the following conditions: The PCMH consists of a very expensive, highly specialized group of healthcare professionals; it is applied to a carefully selected group of very sick patients who represent far less than 1 percent of the population.
The authors seem to be uncomfortable using the PCMH label for the Texas clinic where the study was conducted. They invoke the label several times, but make no effort to explain why they equated the clinic with a PCMH. The paper lists only three of the accoutrements PCMH’s are supposed to display (access to clinicians 24/7, electronic medical records, and the regular use of patient “satisfaction” surveys); and the doctors are all specialists (PCMHs are supposed to be primary care clinics).
In fact, the concept Mosquera et al. operationalized, and use repeatedly in the paper, is “comprehensive care,” not “medical home.” In the discussion section explaining why “comprehensive care” reduced total expenditures, the authors refer to the “high-risk population” and the extra staff.
Why couldn’t Mosquera et al. simply assert that the clinic was able to reduce hospital costs because it hired more staff? What is gained by claiming that a clinic that hires more staff deserves an ostentatious name like “medical home”?
I suspect the authors thought the paper would draw more attention if it could be associated with the “medical home” fad. But whatever the reason, the authors’ effort to cram this experiment into the PCMH pigeonhole illustrates how the “home” fad confuses the debate about how to improve medical care without raising costs.
The fad has conflated two questions that must be kept separate: Whether a given problem needs more resources to solve it, and whether the problem should be addressed as well, or alternatively, with organizational change.
Organizational or structural change is implied by “medical home” and other language used by PCMH and managed care advocates such as “accountable care organization,” “delivery system reform,” “re-engineering,” “restructuring,” and “transformation.” The implication of this language, especially when it is used repeatedly without reference to the new administrative and personnel costs these interventions generate, is that clinics and hospitals do not need more money, but instead need a change in structure that will cause them to work more efficiently.
It is clear from Mosquera et al.’s paper that the hiring of more staff explains the large reduction in hospital costs and the dramatic improvement in the health of the patients who received “comprehensive care.” The clinic invested huge sums of money – $5,000 more per patient per year than it spent on “usual care” – to hire more specialists, nurses, and other staff. There is, conversely, no evidence in the paper indicating the clinic underwent any change in structure, much less a “transformation” into something so different it required a label like “medical home.”
I understand the authors’ reluctance to come right out and state the obvious: “We spent more money on clinic personnel and cut costs on hospital care.” The idea that a problem can be solved by bringing more resources to bear is inconsistent with reigning managed care theology. That theology holds that whatever ails our healthcare system can be solved or ameliorated by structural change induced, or accompanied, by “payment reform” that shifts risk to doctors and hospitals.
But defects in structure or organization are not what ails the U.S. primary care sector. The problem is insufficient resources devoted to primary care professionals. This insufficiency is aggravated by unnecessary administrative costs inflicted on clinics by the multiple-payer system and by the endless stream of managed care experiments hatched by the insurance industry, Congress and state legislatures.
The overhead costs of PCMHs, to take one example of the managed care nostrums that are draining money out of clinics and hospitals, are substantial. How substantial? It’s hard to say because the question is of no interest to PCMH advocates and has been the subject of little or no peer-reviewed research.
As was the case with other managed care fads, the policy entrepreneurs who launched the PCMH fad did so without an ounce of evidence on the intervention costs it would generate. The only relevant evidence I’m aware of is anecdotal evidence. It suggests that the costs clinics incur to become “homes” – additional medical staff plus new administrative costs – raise clinic costs by 15 to 25 percent.
Consider two bits of anecdotal evidence about PCMHs run by doctors who sincerely believe in the PCMH model.
In March of 2012, the Wall Street Journal published an article with the headline, “Why America’s doctors are struggling to make ends meet.” It was about Dr. Scott Hammond, one of three doctors who practice at the Westminster Medical Clinic in Denver, and the clinic’s effort to participate in the Colorado Multipayer Patient-Centered Medical Home Pilot.
The article contained a photo of a small ledger showing a summary of the expenses and income for the clinic for 2011. The income side of that little ledger indicated the clinic received large upfront payments from several insurers participating in the pilot to offset the costs of becoming a “home” ($243,000) plus a grant to hire a social worker ($34,000).
These payments totaled $277,000 – 13 percent of the clinic’s total income of $2.1 million in 2011.
Moreover, the expense side of the ledger indicated the clinic spent $6,000 on electronic medical records and the text of the article indicated the clinic’s income fell $200,000 in forgone patient visits to free up staff time to devote to the PCMH pilot.
Anecdote 2: At a May 30, 2014, conference on PCMHs sponsored by WellPoint, Dr. Mark Frazier spoke about his experience running a PCMH for a program called the Comprehensive Primary Care Initiative (CPCI) run by WellPoint and the Centers for Medicare and Medicaid Services. Here is an excerpt from Dr. Frazier’s remarks from the transcript:
What happened in our first year of the CPCI? Revenues actually dropped by 5 percent and office expenses increased by 19 percent. … [O]ur office overhead increased 52 percent. … I’m working 14 to 16 hours days every day and I can’t figure out whether it’s because of patient-centered medical home model, or the EMR, or a combination.
Commentary by doctors involved in PCMHs confirms these anecdotes. A report published in the newsletter of the American Academy of Family Physicians on the academy’s 2012 Congress of Delegates indicates the AAFP leadership got an earful from its members about the AAFP’s support for PCMHs.
The article quoted three delegates who spoke about the high cost of PCMHs. One of them, Dr. Kim Yu, said she had to close her practice because she couldn’t afford all the trappings associated with becoming a PCMH. The comments that other doctors posted at the end of this report were harshly critical of the AAFP’s support for “homes.”
Readers interested in reading the views of some other exasperated primary care doctors should read the comments that follow this report on the conference that Dr. Frazier spoke at.
News of the financial and psychological stress that the PCMH experiment is imposing on primary care clinics seems to be filtering up to some of the august bodies that launched the “home” fad back in 2007 and 2008. At its March 6, 2014, meeting, several members of the Medicare Payment Advisory Commission (MedPAC), which endorsed “homes” in 2008 on no basis other than some unnamed “experts” thought it was a good idea, expressed concern about the high cost of meeting the requirements stipulated by the National Committee for Quality Assurance.
Commission chair Glenn Hackbarth called the requirements “gold-plated” and said he was worried NCQA’s “bells and whistles” had put the “medical home model [at] a real cost disadvantage.” (pp. 251-253, transcript)
But despite the growing awareness that PCMHs are stressing clinics and cannot save money when applied to the general population, neither MedPAC nor the AAFP nor any other of the major proponents of the “home” fad have withdrawn their support. They should. The concept has become counterproductive. It promotes the mistaken belief that our primary care sector needs to be “re-engineered” when what it really needs is more resources.
It justifies expenditures on paraphernalia that have never been shown to cut costs. It promotes the mistaken belief that the NCQA’s one-size-fits-all model can save money when in fact it appears it can save money only for a tiny, very sick fraction of the population, and then only if we pretend a clinic that hires more staff isn’t just a clinic with more staff but a “medical home.”
It is time to junk the “medical home” concept and to focus instead on expanding our primary care work force.
Where might those resources come from? We could of course simply funnel more money into the healthcare system, either in the form of more premium payments to the insurance industry or higher taxes. But more money for the system would not be necessary under a single-payer system.
We could easily finance the training and hiring of more primary care doctors, nurses, social workers, and community health workers with the immense savings generated by a single-payer system.
Kip Sullivan is a member of the board of Minnesota Physicians for a National Health Program. This post was published with permission of Physicians for a National Health Program.