Perspectives in Primary Care

Impact of PatientCentered Medical Homes on Cost and Quality of Health Care: Michigan’s Experience

The United States health care system is undergoing a major transformation in response to concerns that in its current form the system is unsustainable. Health care costs continue to rise, health care is often fragmented and quality is frequently not reflected in patient care outcomes. There is a demand for increased transparency and a need for improved integration across and between health care systems. Patients expect a positive health care experience at a reasonable cost. Primary care providers are seeking ways to improve the health of their patients while managing their costs. Employers, as purchasers of health insurance, are seeking affordable health care for their employees and families.

The Institute for Healthcare Improvement (IHI) developed a framework identifying three strategies that need to be addressed in order to build a sustainable health care system.

  • Improving the patient experience of care, which includes quality and satisfaction
  • Improving the health of populations
  • Reducing the per capita cost of health care.

Redesigning primary care services and structures was one of the strategies that IHI believed would lead to improvement. The Patient-Centered Medical Home (PCMH) model emerged as one of the approaches that experts believed would lead to improvements in quality, experience and cost. As noted in Michigan Paving the Way for Medical Homes, the first in a series of briefings on primary care issued by the Michigan Primary Care Consortium, early data suggested that the PCMH model did have a positive effect on the cost and quality of health care services. As medial homes mature there is growing evidence that the PCMH model leads to a reduction in health care costs, unnecessary utilization of services, improvements in population health and preventive services, increased access to primary care and growing satisfaction among patients and clinicians. A study by Khanna et al showed that quality improvement and cost reduction are often not evident until the 3rd year of PCMH recognition.

This paper will explore further the effect the PCMH model has had on cost and quality in physician organizations and independent practices in Michigan as well as the impact primary care system transformation has had on employers. 

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