Stimulus Money + EHR + Medical Home = Reform

Kathryn Mackenzie, for HealthLeaders Media, March 10, 2009

There are five areas the United States has to concentrate on in order to improve healthcare: coverage for all, payment incentive reform and realignment, wellness initiatives, quality improvement, and health information technology. That is what American Hospital Association President Richard Umbdenstock told key stakeholders last week during President Obama's White House healthcare summit.

If those are indeed areas we should be focusing on for healthcare reform, why aren't we hearing more talk about the patient centered medical home model? The very idea of the PCMH is founded upon reducing chronic diseases and improving quality care through preventive medicine and wellness initiatives, according to guidelines put forth by the National Committee for Quality Assurance.

The concept also represents a way of realigning financial incentives with healthcare delivery goals to provide coordinated, integrated, ongoing care, says Salvatore Volpe, MD, who runs a PCMH practice in Staten Island, NY.

Two things facilitate that integration and continuity of care: the primary care physician and health information technology, says Volpe. Primary care physicians, understandably, balk at spending the extra (uncompensated) time on attempting to arrange for follow-up care for each patient. But under the PCMH model, physicians are paid for services such as care management and care coordination, which are not reimbursed under the current fee-for-service system.

"The current system penalizes you for using HIT. If I spend the additional time to use my EHR to look up what's needed for my patient in terms of preventative, I'm being penalized because I'm spending additional time I could be spending seeing another patient," says Volpe. "We have to be reimbursed for that extra service and time. The only place I'm seeing that done is with the patient centered medical home," he says.

Volpe points to the oldest and largest PCMH model, North Carolina's Medicaid managed care program, Community Care of North Carolina, as proof that the idea works. CCNC is based on physician-led networks that use the PCMH model to provide care to the state's Medicaid recipients. It started 10 years ago with nine pilot projects covering 250,000 Medicaid enrollees, and has since expanded to 14 networks covering more than 750,000 Medicaid recipients across the state.

CCNC pays each network $2.50 a month for each Medicaid recipient and an additional fee of $2.50 to each physician for each Medicaid patient in the physician's practice. Over the course of the program, CCNC has saved North Carolina nearly half a billion dollars.

"By paying doctors a little more, they were able to invest in health information systems, like EHRs or e-prescribing software. Doctors had an incentive to stay open a little longer so instead of closing at 4 o'clock they might close at 5:30. They were able to offer more wellness programs or preventative care," says Volpe, who writes a blog on EHRs and the PCMH.

Sarah Corley, MD, chief medical officer for NextGen Healthcare and a practicing primary care physician, says she believes that President Obama's call for increased EHR adoption combined with the forthcoming stimulus money is leading the country toward greater use of the PCMH model.

"That's where the cost savings in our society are going to occur. Once you have a fairly good adoption of EHR, which I anticipate will occur over the next six years because otherwise the physician will be paying a penalty, I think that then you would say, okay, we paid the stimulus money to adopt EHR. Now what we're going to do is pay you to provide PCMH centers and care coordination services," she says.

As President Obama said last week during the summit, "No proposal for reform will be perfect. If that is the measure, we will never get anything done. But when it comes to addressing our healthcare challenge, we can no longer let the perfect be the enemy of the essential." By my calculations, the PCMH model addresses four of the five areas concentration called for by Umbdenstock: physician payment realignment, wellness initiatives, quality improvement, and health information technology. Not perfect, but maybe essential.

Kathryn Mackenzie is technology editor of HealthLeaders magazine. She can be reached at
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