The DO | Special Coverage | OMED 2012

Can medical homes be cost-effective for vulnerable patient populations?

The chief medical officer of a health plan serving nearly 600,000 low-income patients in California, William Henning, DO, sees many benefits in the patient-centered medical home model of care. In addition to raising health care quality by improving access to care, chronic disease management and care coordination, the model slashes wasteful expenditures, such as unnecessary emergency room visits and hospital readmissions, which are typically borne by third-party payers, according to Dr. Henning.

Dr. Henning

William W. Henning, DO, has been tasked with coming up with a payment model for safety-net physicians. (Photo by Carolyn Schierhorn)

However, while saving payers money, the transformation of a practice into a medical home can be costly for physicians, Dr. Henning noted yesterday during an OMED 2012 panel discussion. He cited a 2012 study in JAMA: The Journal of the American Medical Association showing that federally qualified health centers with higher than average quality scores had higher operating costs per month.

“This is the first time I’ve seen an objective number indicating that if we’re going to raise quality, if we’re going to ask practices to meet specific medical home criteria, here is what it is going to cost,” Dr. Henning told The DO. While the additional $2.26 monthly cost per member—the figure cited by JAMA—may not seem like much at first glance, a practice with 1,000 members would incur additional costs of $27,000 a year, he said.

Developing a model

Dr Henning, who is with Inland Empire Health Plan, has been tasked with coming up with a payment model for safety-net physicians—those who primarily treat the uninsured and other vulnerable patients—practicing at 10 community health clinics in Riverside, Calif. One of many pilot projects around the country testing the medical home model of care, the Inland Empire initiative has struggled to find the optimum system for assessing practices that primarily serve Medi-Cal beneficiaries (those with Medicaid or other state-funded health insurance).

The National Committee for Quality Assurance (NCQA) has developed the “gold standard” recognition program for patient-centered medical homes, Dr. Henning acknowledged during the session. But most safety-net physicians operate on such slim margins that they would not be able to shoulder the costs of full NCQA recognition, he said.

Consequently, Dr. Henning is developing a simplified, more attainable set of metrics to improve quality and efficiency in practices that serve indigent patients. As a starting point he used a definition of patient-centered medical homes approved by the California Legislature but vetoed by the governor at the end of September. The bill called for medical homes to meet the following criteria:

  • Facilitate relationships between patients and physicians.
  • Use a team approach to care.
  • Deliver high-quality comprehensive care.
  • Use evidence-based medicine, patient input and clinical decision support tools.
  • Enhance patient access to and communication with the care team.
  • Engage in continuous quality improvement.

“We need objective measures—ways we can reward you innovatively for meeting those metrics,” Dr. Henning said. Practice scorecards should be based on patient outcomes, not a checklist of processes. “We can look at your 30-day hospital readmission rate. We can look at your patient satisfaction scores,” he noted.

Dr. Henning favors a tiered approach to rewarding practices for meeting medical home criteria. On top of a base payment for episodic care (either fee-for-service or capitation), practices would receive additional per-member, per-month payments if they fulfill the requirements of any of four modules: enhanced access, care coordination, use of electronic health records and quality reporting registries, and NCQA recognition.

“We were taught the acute care model in school, not the chronic care model,” observed Dr. Henning, who is the president of the Osteopathic Physicians and Surgeons of California. “In the new model of care delivery, you’re not just responsible for the person who is sitting in front of you in your office. You are responsible for everybody who has seen you in the past two years, whether they’ve been coming in for follow-up care or not.”