Rethinking Hospital Care – Health Systems Adopting the Medical Home Model


With Medicare soon releasing a final rule on reducing hospital readmissions, hospitals need to strengthen their efforts in this endeavor. Hospitals with the highest rates of readmissions can face the harshest penalties, with the Centers for Medicare and Medicaid Services (CMS) cutting 3% of their reimbursements.

A much conversed about topic to help reduce hospital readmissions has been the Accountable Care Organization. However, with start up fees higher than previously expected and a list of complications, health systems are adopting an accountability approach. The end result is similar to that of an ACO, to help control costs while increasing quality. Health systems will be held responsible for the quality of care they provide to their patients

2 Ways The Patient Centered Medical Home Can Assist.

Patient Centered Medical Home (PCMH):

The PCMH is geared around primary-care physicians keeping sickly patients out of the hospital. By providing help at home, physicians can help curb readmissions while providing quality one-on-one time with patients. A study by Group Health Cooperative found that after one year medical home patient visits to emergency rooms decreased by 29%, the rate of hospitalizations dropped by 11% and the medical home had 6% fewer in-person visits. While there are up front costs for implementation, the enhanced quality makes financial gains a reality.

Items to Remember:

  • The PCMH is a team approach so ensure effective communication between patient, primary-care physician, and the team the physician communicates with in order to properly manage the patient’s well being.
  • The PCMH reduces physician burnout as they spend more time with patients who desperately need their services.

Look to Massachusetts:

As the precursor to national health reform, Massachusetts’s health reform, enacted in 2006, has lead to some new developments with accountable care techniques. While the vast majority of Medicare enrollees based in western Massachusetts are fee-for-service based, Mercy Hospital sought to develop a Medicare Advantage plan around the PCMH.

There are currently 6,000 members enrolled in the program and after three years costs in 2009 were around 13% lower than those on the mainstream fee-for-service Medicare. The bulk of this savings, 50%, came from reduced inpatient days.

Items to Remember:

  • Do not jump straight into this accountable care approach. By acting to early you might miss out on volume-based returns while acting too late could lead to a more prepared competition.
  • Analyze local market conditions, the speed at which commercial payers want to move forward, and when incentives are deployed.



2 Responses to “Rethinking Hospital Care – Health Systems Adopting the Medical Home Model”

  1. Mark Nolte says:

    Great article .Agree with this article.

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