The Patient Centered Medical Home, Medicare's Comprehensive Primary Care Intiative and Cost Neutrality

Like this, but with snow

Oh my, he was really angry.

Back when the teenage Population Health Blog was living in New York, our family had a small garden tractor that was outfitted with a snowplow. After a particularly heavy snowfall, the PHB's father assigned the son the task of clearing the driveway. When the obliging PHB ran out of space to push the snow, its solution was to eschew use of a shovel and ram piles of snow outward by repeatedly backing up and accelerating forward in 4th gear. Teenage cries of "ramming speed!" seemed like a good idea at the time, but it really mangled the metal struts that held the plow to the front end of the tractor.

In economic terms, any savings the father achieved in outsourcing the snow removal was chewed up by hours of do-it-yourself blacksmithing that weekend. The driveway may have been cleared, but to the PHB father, the entire transaction ultimately ended up being a cost neutral bust.

Which brings CMS' Comprehensive Primary Care ("CPC") Initiative to mind. Thanks to the just-concluded Medical Home Summit, the PHB got to hear one of the authors of a CPC deep-dive analysis speak to the initiative's first-year findings.

 The entire report can be found here.

Very briefly, by October of 2012, CMS got Medicaid and 29 commercial health insurers to agree to ALL align and have everyone - including Medicare - to pay participating primary care sites a fee for Patient Centered Medical Home (PCMH) style care management.

 The rationale for this arrangement was to spare the clinics from having to offer the PCMH to only some of their patients. By imposing a "critical mass of payers" all patients had equal access to the same benefit.  That meant that practices wouldn't have to deal with the variations of different payer-dependent work flows and payment structures.

More than 500 practices (with an average of 4.4 providers) serving more than 2.5 million patients in 7 Medicare regions agreed to participate. In order to do that, the practices had to demonstrate that they had met meaningful-use criteria for their electronic health records (EHRs), had been officially recognized as a PCMH and had experience in quality improvement.

Once they were in the CPC, they were not only paid additional care management fees by CMS, but received quarterly feedback reports and technical assistance in achieving CMS mandated "milestones" (they can be found on page 84)  Over the course of the first year, practices received a median of $226,000 in care management fees.

At the end of one year, compared to propensity-matched non-CPC practices, CMS averaged $20 per beneficiary per month in care management fees.  They saved $14 per beneficiary per month in claims expense.  Compared to the non-participating sites, that $6 in additional cost did not achieve statistical significance.  Because the confidence intervals crossed $0, the conclusion was that CPC was cost neutral (the results can be found on page 120).  Some of the regions had statistically significant savings, while other regions had statistically significant losses.

The PHB's take:

Good thing the PHB father isn't in charge. 

This isn't the transformative PCMH break-through, and if CMS is looking to bend the cost curve, these one year results suggest Ms. Burwell et al are going to have to look elsewhere.

That being said, it's possible that years 2, 3 and 4 will show savings.  Even if that's true, the PHB wishes CMS and the health system "good luck" in being able to execute anything outside of fiscal year blocks of time.  We'll see.

The good news? The PHB suspects that the participating primary care sites ended up in the black.  They had already absorbed the costs of their EHRs and becoming PCMHs prior to the start of the initiative, so most of their $226,000 probably flowed right to their bottom lines.

As an aside, some of the $14 PBPM savings were attributed to a reduction in 30-day readmissions.  As the PHB understands it, CMS already has a methodology to claw that cost back from the health care system.  If that's true, the PCMH readmission savings are being double counted.

Image from Wikipedia