PCHM’s do not reduce overall costs

Is bending the cost curve possible with an innovative strategy like the patient-centered medical home?

As implementation of the Patient Protection and Affordable Care Act (ACA) gains traction, novel care such as and Patient Centered Medical Homes (PCMHs) are emerging as instruments of potential costs savings. PCMHs aim to reduce costs and improve care by coordinating medical and preventive care to a specified panel of patients and, in return, receive s in accordance with patient risk and outcomes.

In this study, economists examined changes in costs during the first two years of a primary care practice transformation and payment reform initiative begun in 2009 by a not-for-profit network health plan in upstate New York. The authors performed a retrospective review of medical and pharmacy claims data for two groups. The treatment group consisted of 11,686 individuals in a voluntary pilot project of three primary care practices (14 physicians). The treatment group consisted of 84% private pay, 8% Medicaid, and 8% Medicare clients, 55% women, and averaged 42.7 years old. The control group was comprised of 217,276 individuals from 1,122 primary care practices. The control group consisted of 74% private pay, 18% Medicaid, and 8% Medicare clients, 55% women, and averaged 36.0 years old.

Adjusting for fractional-year eligibility, the authors examined changes in spending between the two groups. Average costs increased by $442 from 2008 to 2010 for controls vs. $386 (i.e. $56 less growth) for those in the PCMH pilot. An additional analysis where all patients initially assigned to the PCMH remained grouped together reveled an approximately $200-$300 annual cost savings; however these findings were not statistically significant.

There were some significant savings in subsets of care such as emergency care (-11%, p=0.01 at year 1), evaluation and management (-3.4%; p=0.00 at year 1 and -6.5%, p=0.00 at year 2), and tests (-16.5%, p=0.02 at year 2).

Commentary

The authors of this study champion PCMHs suggesting that the “effects are large, and patterns of suggested savings in inpatient services and selected outpatient services are plausible.” The data, however, caution making such an optimistic conclusion.

First, the study suffers from selection bias. The treatment group – 3 voluntary PCMH practices – were compared to a conscripted group obtained via retrospective assignment. That bias should favor the PCMH pilots; yet they produced no significant savings overall. Second, there were notable differences in payer mix between the groups. The control had a notably larger Medicaid population. Third, there was no information concerning the socioeconomic status, health status, geographic distribution, or levels of care available to patients. It is impossible to discern if this study compared apples to apples, apples to oranges, or fruit to cars.

If we were to endorse that PCMHs generate cost savings, this study did not provide adequate information to establish that fact. While we should embrace innovative methods to improve the quality of health care and reduce costs (which may not be simultaneously possible), adoption of such systems should be evidence-driven.

Vats, S. et al. Med Care. 2013; 51: 964-969.

by

Laura Grubb, MD, MPH

Dr. Grubb joined Policy Prescriptions® in 2013. She obtained her medical degree from George Washington University. Her pediatrics training occurred at the Naval Medical Center in San Diego and the University of Texas Health Sciences Center in Houston. She practices adolescent medicine.