Wednesday, September 2, 2009

Group Health Cooperative Study Says the Patient Centered Medical Home (PCMH) Did Not Reduce Healthcare Costs

If Group Health Cooperative (GHC) can’t do it, nobody can.

The following is a quote from a published study on the Patient Centered Medical Home (PCMH) that just appeared in the American Journal of Managed Care:

‘Totaling costs across all components of care, we found no statistically significant overall cost differences between the PCMH and other clinics.

That’s right. In this 12 month prospective, comparative, pre-post study that compared economic, clinic and other outcomes from a single PCMH clinic versus 19 control clinics, the PCMH did not save any money.

The study quite instructive on how extensive a PCMH redesign of a primary care clinic can be. A single metropolitan Seattle primary care practice was converted to a PCMH by a) reducing the physician panel from an average of 2327 to 1800 patients, b) expanding appointment times from 20 to 30 minutes, c) increasing physician support staffing, d) starting team huddles, e) instituting pre-visit outreach and chart reviews, f) issuing patient-centered quality deficiency reports, g) starting e-mail and telephone encounters (as an alternative or complement to in-person visits) and h) using on team-based rapid process improvement. Participating physicians were exempted from RVU-based adjustments. Last but not least, the most dreaded of interventions known to healthcare providers was also used: workshops. Whats' more, there were two of them.

After going through all that trouble, did the PCMH save money? The answer is no.

One year later, per member per year (PMPY) costs for the PCMH clinic was $6089 versus $6107 in the control clinics. While there was a $17 difference, it wasn’t statistically significant.

Emergency room costs were statistically significantly lower for the PCMH ($238 vs. $292), but primary care costs were statistically significantly higher for PCMH ($582 vs. $566). Specialty care costs were higher too, but failed to achieve statistical significance.

A host of other outcomes including visit types and numbers, patient and provider satisfaction (continuity for the patients and ‘burnout’ for the provider staff) and composite HEDIS measures were also studied. The detail is mind-numbing but can be summarized by saying that the PCMH performed better when it came to quality.

The Disease Management Care Blog isn't convinced that this is enough to push the DMCB into the mainstream of patient primary care or elevate it as a candidate for healthcare reform. That's because of questionable:

Not only was this Group Health Cooperative, but GHC chose its best clinic. If the best of the best couldn't save money, how likely is it that any of the other pilots will save money? How likely is it that GHC's experience could be replicated in other settings?

Quality: While health care quality is an important factor in the healthcare debate, it remains to be seen how the benefits described in this paper will 'play' in the market place. If there is no change in health care costs, some purchasers may ask: 'why bother?' Doctors having to go through the redesign (and those awful workshops) may also ask: why bother?'

Cost savings: While ER costs declined, there was no meaningful reduction in speciality health care costs and primary care costs increased.

Given the relentless increase in cost inflation, the DMCB doubts stakeholders, the Congressional Budget Office or reform advocates will be favorably impressed.


Bradley Dean Stephan said...

I don't believe a one-year study offers an adequate timeframe to demonstrate cost savings (or losses) derived from preventive or chronic disease management care services.

Jaan Sidorov said...

Brad makes a good point.

On the other hand, the substitution of lower cost primary care for high cost ER care should be observable within a reasonably short period of time. This paper specifically addressed that and it appears to have been a wash.

There's a bigger problem too. Health provider and health insurers' budgets are set from year to year and last one year. Not only will we have to re-tool the delivery of health care services, but will we have to blow up Revenue vs. Expense, Cash Flow and Balance Sheets?

Unfortunately, primary care and medical home systems may need to figure out how to deliver the PCMH on a cheaper basis.

Liz said...

As has already been noted, one year is pretty short term to rate results, when you consider how long it takes to implement PCMH. And one has to wonder whether or not those poor health care providers who had the 'dreaded workshops' inflicted upon them were actually included when setting the goal of short-term cost savings.