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Healthcare Reform Implement New Models of Care

4 Reasons Why the Medical Home Model Will Succeed

SironaHealth Supports Medical HomeNo moment in history is perfect, and the current health care situation in the U.S. is no exception. But there are trends, legislation, and opportunities that could transform health care for the better. The organizational models ready to make that transition are the Patient Centered Medical Home and its sibling, the Accountable Care Organization (ACO). The following article provides four reasons why this is now possible.

1. Health Care Reform

In the past, managed care models (emerging from The Health Care Management Act of 1973) were under-resourced, focused solely on cost containment, and faced an onslaught of “for profit” organizations. They could not possibly rein in health care costs over the long run. Eventually, they retreated to managing some costs and passing along others. Further, health plans were “outside” the “care loop” and too focused on cost control, which did not create an atmosphere of trust and, in some very public instances, put patients at risk. 

It is a well known principle in quality management that if you focus on cost containment, cost will initially be reduced; however, quality will be compromised, and eventually cost will rise again dramatically. This happens because pure cost containment is not a rational process improvement strategy. The focus must be on quality – do everything correctly – then and only then will costs come down. This is the agenda of Health Care Reform.

The Patient Centered Medical Home is a preventative care model – prevention is the highest level of quality in systems thinking and will always achieve cost savings.

The 2010 Health Care Reform act contains an important provision for creating a “Center for Comparative Effectiveness Research.” Although this center is restricted from “mandating payment, coverage or reimbursement policies,” it is hopefully the beginning of a national practice standard for U.S. health care. No doubt this will cause concern for many, but it is the path to sanity for all us who are paying the bill. In T.R. Reids’ book, The Healing of America, every other market-based economy that has implemented universal health care has done so using a standard of care approach. Their population health statistics and the cost as a percent of Gross Domestic Product reflect the success of this approach. The standard of care defines quality. The impact is cost savings. Our neighbors around the world have proved this.

The Medical Home re-imbursement model incents efficacy.  However, there is one pitfall in the model – Individual Medical Homes may be too small to take on population risk. Risk assumption in small populations is complicated by demographics, existing medical conditions, and co-morbidity.

2. Coordination of Care

Disease Management fragmentation in the existing delivery model is a good example of what is missing from our current Coordination of Care model. Why do disease management programs have such disappointing results? First, they rarely integrate the primary care physician into the program. When a health plan or the Centers for Medicare and Medicaid Services (CMS) implements disease management programs, the programs are perceived as cost control, not care management. Physicians and patients do not trust the plans. Often, the physician does not even know about a program until their patient tells them. At this point, the physician is not in a position to endorse the program and frequently discourages patient participation. The health care landscape is littered with outreach programs that don’t include the relevant physician(s).

In the Medical Home model, the practice will direct the coordination of care with full knowledge of all services. The practice and physician can weigh in on program design and evaluation. Here, the role of the practice is expanded to include population health.

3. Prevention

One of the toughest issues often not discussed is the economic impact of prevention. Peter R. Orszag, Director of the Office of Management and Budget, stated before the U.S. Senate Committee on Finance (March 10, 2009) that health care expenditures could be reduced by 30%, or 700 billion dollars, if care standards existed. This is not rationing, but recognition by the OMB, that increases in “volume” and “intensity” of care does not always increase quality of care.  This point is also made crystal clear in Atul Gawande’s June 1, 2009 New Yorker article, “The Cost Conundrum.”

Prevention will have an economic impact. It may eliminate health care revenue, income, and jobs. But it will also eliminate inherent safety risks associated with unnecessary care.

Redirecting money to Medical Home models can have a multiplier effect – people will be healthier and require less health care, resulting in a reduction of spending on excessive health care services.

4. HealthCare Provider Trends

One of the more interesting provider trends is a shift to non-profit health care provider organizations composed of former for-profit organizations. According to a recent New York Times article, entitled "More Doctors Giving Up Private Practices," physicians are becoming more focused on providing care and living a balanced life, rather than taking on the dual responsibilities of running a business and practicing medicine. This trend will create more "Mayo" like institutions. This trend, along with new funding mechanism in Health Care Reform, is a better alignment to improving preventive medicine.

Some feel that, as these organizations coalesce around the Medical Home Model or its near twin, the ACO, insurers and employers will have less bargaining power over reimbursement. We have already learned, since 1973, that negotiating at this level does not contain costs. Reform starts in the delivery system. The Medical Home agenda of Prevention and Coordination of Care enabled by Healthcare Reform, along with the drift toward non-profit organizations, lays the groundwork for success for the first time.


SironaHealth’s Position

What is our agenda? Our business is based on an “appropriate” care model driven by clinical guidelines. In addition, our capabilities fit extremely well with NCQA standards for the Patient Centered Medical Home: we provide a 24-hour nurse line and 15 other services required to make the Medical Home successful. All our services can be seamlessly integrated with an organization’s EMR system and business process. 

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