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Report Promotes Integration of Medical Home, Value-Based Insurance

Joe Cantlupe, for HealthLeaders Media, March 30, 2010

Two health plan initiatives—the patient-centered medical home (PCMH) and value-based insurance design (VBID)—can lead to lower health costs and improved employee health, say experts who contend that "obvious synergies" between the two programs often go unnoticed because they are carried out separately.

The proposal was made in a report presented to a conference in Washington, DC, by authors from the National Business Coalition on Health, the Patient-Centered Care Collaborative, and the University of Michigan Center for VBID.

In recent years, the authors stated in the report, entitled "Aligning Incentives and Systems –Promoting Synergy Between Value-Based Insurance Design and Patient-Centered Medical Home," numerous strategies have been pursued to achieve the "dual objective of controlling costs and improving employee health." They said that research is emerging on the effectiveness at optimizing clinical outcomes and restraining costs.

Despite growing momentum on both fronts, the approaches are usually examined separately and therefore obvious synergies go largely unnoticed, the report stated. The authors are: A. Mark Fendrick, MD, professor at the University of Michigan departments of Internal Medicine and Health Management & Policy; Bruce Sherman, MD, Patient-Centered Primary Care Collaborative (PCPCC) Center for Employer Engagement, which is a coalition of groups working to advance the patient-centered medical home; and Dennis White, senior vice president for value-based purchasing at the National Business Coalition on Health, a national nonprofit membership organization of purchaser-led healthcare coalitions.

The medical home is a comprehensive primary care program in a healthcare setting that facilitates partnerships between patients, their personal physician, and when appropriate, the patient’s family. PCMH is a supply-side mechanism to enable clinicians to delivery better quality care more efficiently, according to the report.

"The PCMH fosters relationships between patients and providers, improves access, and increases quality and consistency of care," the report stated. "PCMH incorporates re-created office processes and payment systems to reward an ongoing physician-patient relationship and high-quality coordinated care."

"The PCMH requires an investment in financing, through either upfront payments or redesigned reimbursements, to help providers implement and sustain a model," the report adds. "Through better information management, use of guidelines, and coordinated care, the PCMH theoretically may contribute to better quality, which, in turn, drives cost reductions through avoided hospitalizations and emergency department visits."

VBID is an employer-driven design strategy to optimize use of higher value healthcare services and reduce use of lower value services. "The goal is to generate better results from employers’ healthcare expenditures," the report stated. "The underlying premise of VBID is getting more out of the healthcare dollar by removing barriers for essential effective services. VBID is a demand-side initiative that focuses on patient incentives to enhance use of medical services of proven value."

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