Lack of Adequate Pay Reduces Effectiveness of Medical Home

June 07, 2010

June 7, 2010 — The historic healthcare reform legislation that Congress passed in March makes 19 references to the term "medical home," and for good reason.

Reformers are betting that the medical home, with its physician-led team delivering and coordinating holistic patient care in the exam room and online, is just what the country needs to improve quality and lower costs. At the same time, giving primary care physicians extra pay for operating medical homes — and operating them well — promises to deliver these clinicians from fee-for-service medicine and its piecemeal, perverse, and punishing incentives.

Creating such nirvanas, however, is easier said than done, especially when physicians attempt to reform their practices in an unreformed system with inadequate compensation, according to a set of 8 articles in a special supplement of the Annals of Family Medicine, released today, which evaluate a 2-year medical-home demonstration project.

Working "feverishly," the 36 participating family practices registered modest improvements in quality-of-care measures but backslid in terms of how patients rated them. The demonstration project is the first of its kind on a national scale.

The authors of the summary article in the collection concede that it is possible for practices to become medical homes, but that this transformation "requires tremendous effort and motivation," and that most practices would need outside help, as well as adequate compensation, to make the switch.

"Fixing primary care in the midst of a still broken system will not be sufficient or possible," the authors write.

This assessment may sound discouraging, but students of the medical-home movement say other experiments have fared better, largely because physicians received the support and compensation lacking in the family practice project.

"These articles aren't a verdict on the medical home," Ann O'Malley, MD, a senior health researcher at the Center for Studying Health System Change, told Medscape Medical News. "Other projects are more promising."

Goals of Project Changed Over Time

The medical-home trial chronicled in the Annals of Family Medicine was launched by the American Academy of Family Physicians (AAFP) with financial support from The Commonwealth Fund, a private healthcare reform foundation. TransforMed, an AAFP subsidiary, designed and implemented the trial, called the National Demonstration Project (NDP).

The 36 practices in the NDP fell into 2 groups: A "facilitated" group received extensive help from consultants and vendors of health information technology, and a self-directed group went it alone with Web-based tools and services.

At the beginning of the 2-year study period, both groups of practices on average had roughly 46% of the largely technological components of the medical home they were trying to build, with the self-directed groups being somewhat ahead. These components ranged from same-day appointments and optimized office design to electronic prescribing, electronic health records, and practice Web sites. By the study's end, the groups had put in place approximately 70% of these components, although facilitated groups implemented more.

The authors of the articles in the Annals of Family Medicine noted that the AAFP project initially promoted an early version of the medical home, which put a heavy emphasis on digital technology. As the concept of the medical home evolved, the AAFP and its TransformMed subsidiary redesigned the NDP midstream to give more weight to less tangible primary care virtues.

"They were trying to test things that were changing," said Michael Barr, MD, vice president of practice advocacy and improvement for the American College of Physicians. "They did a nice job adapting."

Patients Felt Slightly Less at Home in Their Medical Homes

In the words of the authors, "the jury is still out" on whether the NDP model of the medical home improves the quality of patient care. Preliminary results, though, offer some encouragement. Adopting components of the medical home was associated with better patient access, more preventive care, and a higher percentage of chronically ill patients receiving recommended treatments and assessments. In addition, both groups posted roughly a 5% gain on the scorecard of the Ambulatory Care Quality Alliance for managing chronic disease — keeping HbA1c levels under control and blood pressure at target, for example.

However, how patients rated their medical-home experience was disappointing. Both facilitated and self-directed groups nudged up 2% in terms of patient empowerment and self-rated health status, but when it came to access to care, care coordination, comprehensive care, and service relationship satisfaction, both groups dipped slightly.

The authors of an article on patient outcomes speculate that the patient ratings may have decreased because the intense effort to implement digital technology such as electronic health records "may have temporarily distracted attention from interpersonal aspects of care." Likewise, the hard work of building a medical home may have simply left physicians and staff too tired to improve the patient's experience once he or she stepped inside.

New Medicare Pilot Project Adds Medical-Home Sweetener

The 36 practices in the NPD did not receive extra compensation from payers for their efforts to be a medical home. Instead, they continued to get paid on a fee-for-service basis. Dr. O'Malley of the Center for Studying Health System Change views this compensation arrangement as a major handicap.

"Given that primary care doctors are already overwhelmed and underpaid, expecting them to transform their practices without additional funding is unrealistic," said Dr. O'Malley.

The authors of the summary article reached that same conclusion and recommended that third-party payers turn to arrangements such as monthly capitation payments to make medical homes worthwhile for physicians. "Expecting practices to front the cost of transformation with the hope of more appropriate reimbursement in the future is unlikely to succeed," they write.

Dr. O'Malley and others note that private health insurers and public payers such as state Medicaid programs have already rolled out medical-home pilots that reward physicians for care coordination and other medical chores that go unpaid in the fee-for-service world (for a comprehensive list of initiatives, visit the Patient-Centered Primary Care Collaborative Web site). And just last week, Medicare invited states to apply for the first of 3 medical-home demonstration projects that will combine fee-for-service payments with a medical-home sweetener, which could take the form of monthly capitation payments, add-ons to usual fees, or pay-for-performance incentives. Medicaid and private payers also will participate with Medicare in this project.

Another Demonstration Project Put Up Good Numbers

The authors who evaluated the AAFP medical home project in the Annals of Family Medicine concluded that physicians probably need more than 2 years to get up to speed in this new form of medical practice. Dr. Barr of the American College of Physicians counters that under the right conditions, 2 years may be feasible.

"Demonstration projects show that when physicians have support, they can move through the changes quickly," Dr. Barr told Medscape Medical News.

He points to the success achieved by a medical-home project sponsored by Seattle-based Group Health Cooperative, a nonprofit healthcare system. An article in the May issue of Health Affairs reports that at the 2-year mark, the organization's experiment improved clinical-quality scores, reduced emergency department visits and hospitalizations, reduced staff burnout, boosted patient satisfaction, and saved about $10 per patient per month.

Dr. Barr acknowledges that Group Health Cooperative is a "mature health system" with the kind of built-in support that medical practices in the AAFP demonstration project generally lacked.

"You need systemic change for the medical home to flourish," he said.


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