Healthcare News & Insights

Medical homes: Better, cost-effective care or waste of time?

dr-rush-limbaugh-examines-stan-leeDo federally funded health centers deliver better, more efficient care? Do they save money? A new government report offers some answers. 

You could say that a $57 million experiment wasn’t nearly as successful as the Department of Health and Human Services (HHS) thought it would be, according to a Kaiser Health News (KHN) report.

In fact, the experiment, which coordinated treatment for high-risk Medicare patients in hundreds of communities, was a bit of a bust.

Medical homes study

The Affordable Care Act (ACA) created a lab to test new ways to improve care and save money. It was given $10 million over 10 years. And when the trial ended last fall, 69% of the clinics that hadn’t opted out obtained full accreditation as “medical homes” – primary care practices that coordinate care across the vast expanse of specialists, hospitals and emergency rooms.

Sounds pretty promising, right?

Except for the fact that HHS had hoped for 90% to do it.

In addition to attaining accreditation, other goals of the experiment were to cut unnecessary hospital visits and lower costs – both of which were also a bust, according to the report conducted by RAND Corp.

In fact, when compared with the results of the centers that weren’t in the experiment, the admissions and emergency room care went up in centers in the study. And the same was found for expenses.

HHS had been considering expanding the demonstration by three years, but the ACA requires HHS to stop demonstrations that don’t improve care or cut costs. So in October 2014 the study came to an end.

Results weren’t shocking

To some experts, the results weren’t surprising.

Reason: The project directed extra funds to the community health centers.

These centers were nonprofit clinics that got federal funds because they mainly treated and cared for the poor. And the demonstration likely identified more patients with chronic conditions who weren’t receiving medical care. Therefore, treatment and costs would rise because these patients were sicker.

Dr. Katherine Kahn, who led the RAND evaluation, said since the clinics were created to care for more indigent people, “it’s not even entirely clear that one should expect lower costs initially.”

Don’t discount medical homes

It’s true, medical homes have been touted as a solution to the U.S. disconnected health system, which has been reported as wasting 30% of its spending on unnecessary treatments, fraud and excessive administrative tasks.

But don’t count them out due to the RAND report, cautioned healthcare reform specialists.

“It would be a mistake to say we can conclude that the medical home model does not work,” said Dr. Marshall Chin, a professor at the University of Chicago medical school, in the KHN article. Dr. Chin reviewed drafts of the RAND study.

Most of the medical homes that did qualify, didn’t become certified until very late in the study. So in some experts’ eyes, the medical home model wasn’t tested in depth because becoming one – which requires patient-tracking software, referral protocols and a lot of training – was more difficult and took a lot longer than expected.

“No one study should define the value [of medical homes],” Amy Simmons Farber, spokeswoman for the National Association of Community Health Centers, said in the KHN article.

These centers struggled to file reports and participate in conference calls for the experiment while conducting their normal jobs of caring for patients and trying to get reimbursed by insurance companies.

Another argument against the study is that the “extra” money from HHS amounted to a median of $26,000 a year per clinic, which experts say isn’t nearly enough to make a difference. Especially when you consider there were 500 outpatient centers in the study. The feeling is HHS should have focused that money on fewer clinics.

Plus, this experiment didn’t share savings with the providers – if it had, providers would have had a financial incentive to change their referral patterns.

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