I recently led a discussion with the leadership of a primary care network about patient-centered medical homes (PCMHs) and care transformation. PCMH practices have attributes that enable them to increase quality of care, reduce costs, and manage health of populations by being “patient-centered” (eg, providing easier access to care through extended hours) and elevating the primary care clinician’s role as an ongoing coordinator of care.
That may sound like “normal operations” for many primary care practices, and one of the criticisms of PCMH designation is that it can just be a checklist rather than substantive transformation. That is why to be considered “successful,” PCMH practices must also be assessable with clinical and financial metrics.
Pilots and demonstrations of PCMH practices have found that in the process of improving quality and reducing costs, not all types of care are reduced. For example, the number of primary care visits and spending on prescription medicines both increased, while ED visits and total costs were reduced. That shouldn’t be surprising since people with complicated chronic conditions like fragile diabetes, CHF, or COPD are a significant portion of the very expensive patients in most adult populations, and they do better clinically and require less costly care if they see their PCPs more often, their care is carefully monitored, and they take their medications appropriately.
PCMH concepts are not new. In discussing them with the primary care leaders, I reviewed the history of PCMH starting with the American Academy of Pediatrics’ 1960s concept of “medical homes,” through primary care being a focal point for healthcare “reform” in the 1990s and the National Commission for Quality Assurance (NCQA) certification criteria that they developed in the mid-2000s.
Most recently, the importance of primary care was highlighted in the National Academy of Medicine’s 2021 report Implementing High-Quality Primary Care: Rebuilding the Foundation of Health Care, which began with this positive statement:
High-quality primary care is the foundation of a high-functioning health care system and is critical for achieving healthcare’s quadruple aim (enhancing patient experience, improving population health, reducing costs, and improving the health care team experience). High-quality primary care provides comprehensive person-centered, relationship-based care that considers the needs and preferences of individuals, families, and communities.
Financial incentives for PCMH practices started in the mid-2000s with demonstrations and pilots from private payers as a way to leverage their health dollars to improve care. And the Centers for Medicare & Medicaid Services (CMS) Innovation Center (created in 2010) incorporated PCMH into various payment models, leading to potential alignment of both funding sources. For example, the regional transformation initiative I supported in southwest Ohio in the early 2010s capitalized on both CMS demonstration projects and bonus payments from private payers for PCMH certification and other milestones.
Finding the Right Financial Incentives
Not pursuing PCMH certification (or embracing the concepts) is often due to a mismatch between the goals of a PCMH-certified practice and the reimbursement environment in the region — which seems to be the case for the primary care network I was talking with recently.
In other words, to achieve meaningful metrics — and prevent PCMH certification from just being a website badge — there needs to be connections to external and internal financial incentives. The specifics of those incentives are typically determined by local situations in parallel with broader health “reform” and payer initiatives. Those incentives generally progress through levels of increasing capabilities, metrics and financial risk, with individual practices often participating in more than one:
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Pay-for-coordination, where the PCMH practice is capable of doing effective care coordination;
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Pay-for-reporting, which involves reporting on specific metrics (such as A1c for all people with diabetes in the practice);
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Pay-for-performance, which ties such metrics as A1c below a certain level and ED use to additional financial incentives; and
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Risk sharing, which involves the practice potentially benefiting financially by achieving certain goals (such as total cost of care), but also being at some financial risk if the goals are not met.
For any of those steps to be implemented, not only do the metrics need to be agreed upon, but the practice (and others) need to be able to collect and analyze data for both reporting and determining if the goals are met. There are also data challenges for attributing patients to the correct primary care practices and conducting risk adjustment so that a practice with a healthier patient population doesn’t benefit while other practices are disadvantaged. Those are two key reasons why health information technology capabilities for payers and practices (eg, EHRs) are critical for making those types of arrangements work.
The network for the primary care clinicians I was talking with recently do not seem to have many productive financial arrangements incentivizing them to establish PCMH attributes that improve quality and reduce unnecessary care or costs. (I suspect there may also be data problems with their external partners.) That is one reason why the few PCMH-certified practices in the network are not seen as successful, which moving forward may be an impediment to progress if there is a cultural attitude of “we’ve done that and it didn’t work.”
Will COVID Drive More Healthcare Collaboration?
Despite challenges such as those, the COVID-19 pandemic may generate opportunities for many care organizations. Specifically, if businesses in the region focus on their health benefit costs (again) and realize the importance of community health for their businesses, they could be more engaged with ensuring the health of their current and future workforce and families. This type of interest by businesses could be done directly through their insurance benefits plans (and the companies that administer those benefits), or collaboratively with local clinicians, healthcare organizations, and others — which was the process I helped facilitate in southwest Ohio.
If the stars do align and clinicians, businesses, and payers collaborate to improve care and reduce costs (and strengthen the region’s public health capabilities), primary care clinicians are going to be increasingly looked upon as vital care coordinators for their patients. This will require that reimbursement (and direct compensation) are tied to that coordination, along with clinical and economic metrics.
Similarly, specialists are going to need to have closer collaborative relationships with primary care clinicians because they are going to be jointly responsible for outcomes. And finally, the information capabilities for clinicians, healthcare organizations, and payers will all need to be able to generate data rapidly enough to gauge progress toward the metrics that had been agreed upon, and which are the basis for financial accountability.
Although the spread of delivery models (like PCMHs) and associated financial reimbursement practices (like pay-for-performance and risk sharing) have not reached all parts of the US evenly, they are continuing to spread, and payers, employers, and others are expanding them for economic, public health, and business reasons.
What this means for clinicians who are not engaged with such patient-centered, team-focused care models (and associated payment arrangements) is that they may find themselves being squeezed into them — or choosing other, more limited options, such as concierge practices. The alternative to being squeezed by outsiders is for them to embrace the changes and make them work for their benefit, and the benefit of their patients and their communities.
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About Dr Michael D. Miller
For more than 30 years, Michael D. Miller, MD has been working with large and small companies, government organizations, and patient advocates to improve access and affordability for treatments and innovations. His work has spanned many clinical, scientific, and policy areas, including autoimmune diseases, behavioral health, cancer, cell/gene therapies, diabetes, patents, reimbursements, and vaccines. He graduated from Williams College and Yale Medical School, has served on several nonprofit boards, and has spoken across the country on critical healthcare issues.
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