Medical Home Program in Pennsylvania Cuts Healthcare Costs for Complex Medicaid Patients

An initiative that provided Pennsylvania Medicaid patients with a primary care “medical home” reduced the costs of their care by up to $4100 per year and decreased the number of their physician visits and hospitalizations, according to a new analysis by researchers at the Perelman School of Medicine, University of Pennsylvania.

The study, was published online in the Journal of General Internal Medicine and was led by Karin V. Rhodes, MD, a faculty member in Penn Medicine’s departments of emergency medicine and psychiatry at the time of the study. Rhodes said their findings underscore the importance of medical homes for the highest-risk patient, and she noted that medical home programs can achieve significant cost savings even in the first year of the program.

A medical home, as defined by the Patient-Centered Primary Care Collaborative (PCPCC), is a model or philosophy of primary care that is patient-centered, comprehensive, team-based, coordinated, accessible, and focused on quality and safety. (Visit https://www.pcpcc.org/about/medical-home for more information on the medical home philosophy from PCPCC.)

The researchers analyzed claims from Pennsylvania Medicaid patients who were considered complex—patients with both a chronic illness and psychiatric or substance abuse condition. The claims occurred from 2008 to 2011 among Medicaid patients who were treated at regular primary care physicians’ offices and primary care practices that took part in the Pennsylvania Chronic Care Initiative (CCI). The CCI primary care offices became so-called medical homes for patients, providing team-based primary care, patient education, behavioral health support, and chronic care coordination in a single location. The claims were drawn from 96 CCI practices and 60 non-CCI practices (practices not part of the CCI) in Pennsylvania. In addition to the $4145 cost savings per year among medical home (CCI) patients, CCI patients were 15% less likely to use the emergency department for care, 41% less likely to have psychiatric hospitalization, and experienced a 55 relative decrease in medical hospitalizations.

The researchers said the $4145-per-patient yearly cost savings were driven largely by a $3521.15 savings in inpatient medical costs, in addition to relative savings in outpatient psychiatric ($21.54) and substance abuse service costs ($16.42) compared with the non-CCI group.

The researchers note that they did not measure quality of care and thus cannot make conclusions about the overall cost-effectiveness or long-term effects of the CCI.

“The results show that programs striving to increase value should focus their efforts on the highest-risk cohort of patients, who are most likely to benefit from intensive care coordination,” said senior author Paul Crits-Cristoph, PhD, professor of psychology in psychiatry and director of Penn’s Center for Psychotherapy Research.

Reference

Pennsylvania’s medical home initiative: reductions in healthcare utilization and cost among Medicaid patients with medical and psychiatric comorbidities [published online June 25, 2016]. J Gen Intern Med.