STRATEGIES FOR HEALTH PLANS

IN A SHIFTING MARKET

SUPPORTING THE PATIENT-

CENTERED MEDICAL HOME

Contributors:
Richard Lachiver, MD, MPH
Medical Director, Provider Integration; Solutions

Maureen Tressel-Lewis,
Director, Provider Integration; Solutions
GAME CHANGERS
Strategies for Health Plans
in a Shifting Market

The conversation is moving for health plans—

beyond the longstanding challenge of reigning
in healthcare costs to the impacts of health
reform.

• To quality measures with new significance.

• To changing customer expectations.

• To new competitive markets.

Healthways has a 30-year history meeting the

needs of health plan customers. We partner
with many industry innovators. Our experts at
the forefront of health plan innovation see high
potential for strong advantage in a few game-
changing strategies.

We invite you to consider

our perspective.
SUPPORTING THE PATIENT-CENTERED MEDICAL HOME

OVERVIEW
The Patient-Centered Medical Home (PCMH) is an evolving concept that aims to improve cost and efficiency
through an integrated and holistic approach to patient care. While payment reform is usually inherent in
PCMH, many health plans have come to realize that they need more than a reimbursement strategy to
truly transform and improve. Health plans that provide substantive support to engage physicians and
transform practices to the PCMH have the potential to achieve cost savings, improve quality, increase
member and provider satisfaction, and elevate population-wide engagement in health and well-being
improvement through the patient/physician relationship. Working with customers on medical home
initiatives and reviewing marketplace successes, Healthways has identified five guidelines for highly
effective health plan support of the PCMH.

OPPORTUNITY
Many health plans have historically pursued provider Payment – appropriately recognizing the added value
network strategy and healthcare services strategy in to patients of a PCMH
a relatively independent way. More recently, plans are
forging connections between these two areas. The
Patient-Centered Medical Home (PCMH) is part of this
trend. The seven “Joint Principles of the PCMH” define
the model’s core components:1

A recently published analysis of seven of the

They include:
Personal physician – providing first contact,
continuous, and comprehensive care for each patient
as part of an ongoing physician/patient relationship
Physician directed medical practice – a team of
individuals (sometimes known as the care team),
led by the personal physician, who collectively take
responsibility for ongoing patient care
Whole person orientation – providing for all the
patient’s healthcare needs or appropriately arranging
care with other qualified professionals
nation’s largest and most successful medical
home demonstrations showed annual
reductions in patient hospitalization ranging
from 6 to 40%. Most programs reported
reductions in ER visits, from 7 to 29%.2
Other analyses of program cost savings found a
$1.50 return for every $1 invested (Group Health), a
7% savings in total medical costs (Geisinger), and an
estimated statewide program savings in one year of
more than $150 million (North Carolina).3

Coordinated and/or integrated care – across the
healthcare system and patient’s community
Quality and safety – hallmarks of the medical home
Enhanced access to care – expanded hours, new
communication options, open scheduling, and other
approaches
A Healthways review of 16 medical home market
demonstrations noted a variety of other positive
impacts:
• Improved HEDIS scores, including diabetes and
coronary artery disease care quality
• Increased well visits, depression screening, and
vaccination rates

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SUPPORTING THE PATIENT-CENTERED MEDICAL HOME
• Increased physician, staff and patient satisfaction
• Improved patient access and reduced wait times
• Reductions in lost work time for participants in an
employer-sponsored demonstration
In designing programs to support
implementation of the PCMH, health plans
should consider the following five guidelines
to maximize outcomes.
1. Financial incentives are necessary but not
sufficient
Financial incentives have been called out as a core,
value-generating feature of successful medical
homes.4 Clearly, for providers to move from episode-
based care to preventive and proactive patient care,
reimbursement strategies must be developed and
implemented to support practice change. Overall,
the goal should be to shift from funding high-
acuity, reactionary care to supporting proactive and
holistic care, while being mindful to keep physician
reimbursement “whole.”
In its primary care medical home model, one leading
health plan reimburses providers for voluntary
participation in three ways:
• An overall increase in fee schedule
• New fees for specific care planning activities
• Incentive payments based on measures of patient
engagement, quality care, and aggregate costs
Another major plan is holding fee schedules fixed and
offering physicians who commit to establishing and
operating a PCMH:
• A monthly fee per member which increases with
the sophistication of the medical home itself
2
• A pay-for-quality program that provides physicians
additional compensation for meeting overall health
plan quality goals
Some health plans are exploring the possibility
of creating or contracting with Accountable Care
Organizations (ACOs) to realign payment strategies
toward greater physician responsibility for the
overall cost and quality of care. Reform legislation
authorizes Medicare to begin contracting with ACOs
for the provision of services in 2012. The ACO creates
an environment conducive to the medical home by
establishing a structure for physicians, specialists, and
hospitals to take joint ownership of patient care and
quality and to share in savings achieved. Common
provider goals and purpose are critical for ACO success.
Provider payment models can be viewed on
a continuum, from episodic, “fee-for-service”
compensation to the assumption of full risk by
providers. The choice of models depends on factors
including provider infrastructure and appetite for risk,
the patient population, and overall cost and quality
issues. The highest level of provider accountability is
feasible within an ACO. Yet neither the ACO structure
nor other financial incentives transform physician
practices to medical homes.
2) Effective physician relationships require
engagement and implementation approaches
tailored to change readiness
Physician relationships are at the core of the medical
home and central to the success of health plan
medical home initiatives. Just as member marketing
and communication strategies support member
engagement in health management programs, health
plan medical home initiatives need a comprehensive
approach to physician engagement.
Approaches must be designed to meet physicians
at all stages of change readiness:
“Independent” providers – little interest in change
or the medical home
“Cautious” providers – interested in the PCMH
but uncertain about their level of commitment
“Collaborative, interdependent”providers – fully
on board with the concept and ready and willing
to engage
Communication strategies should be developed to
reflect and accommodate the physician’s perspective
and emphasize physician and practice benefits.
Beyond money, physicians and practices are pressed
for time. About 1/3 of all primary care physicians
are the only doctors in their practices. Nearly three-
quarters of physicians work in practices with five
or fewer doctors.5 Physicians will be interested in
resources that save time and raise practice quality and
patient satisfaction. Conversely, any interventions that
create additional work for practices will be met with
contempt and hostility.
Implementation should also reflect physician
readiness. The changes in PCMH are significant. A
gradual process helps practices evolve toward a more
sophisticated PCMH over time.
Engagement and implementation plans that consider
and use the social network connections among
physicians and practices can strengthen adoption of
the PCMH.
Provider mapping technologies can reveal important
patterns of health influence and opportunities to
improve outcomes:
• Identifying physicians who play central roles in their
networks
Well-being is bigger than
Health Management.
• Detecting information flow breakdowns and
isolated providers
• Strengthening the efficiency and effectiveness
of engagement strategies and communication
channels
• Leveraging peer support and influence to change
behavior
3) Partners can help health plans augment
provider capabilities in key areas
Many health plans have turned to trusted partners
in health management to support medical home
initiatives. A major Blue Cross Blue Shield plan
announced a 10-year agreement with Healthways
in January 2011 that includes joint work to further
the development and implementation of the plan’s
statewide medical home initiative. This length of
commitment recognizes that transition to a PCMH
model will take time, and a long-term relationship
is essential to support the gradual deepening of
infrastructure and relationships necessary to fully
realize the promise of the medical home.
Health plans should seek out partners and programs
that save physician time and augment practice
capabilities in key areas relevant to the medical home
model.
Population analysis and identification. Providing the
sophisticated analytical tools to help providers view
their patients from a total population perspective and
to identify patients who can most benefit from care
coordination services.
Financial Community
Social Physical
Emotional
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SUPPORTING THE PATIENT-CENTERED MEDICAL HOME
Care coordination. Providing qualified staff resources
to facilitate “before” and “after” aspects of patient
visits and admissions, working with physicians to
take a longitudinal view of patient care and providing
another informed point of contact for patient access
to an integrated care team of resources.
Behavior change and coaching support. Connecting
patients through physician referral to programs that
reduce identified risks, improve the management of
chronic conditions, and lower the likelihood of future
complications and costs.
Patient engagement. Bringing strategies to attract and
maintain patient interest in preventive activities.
4) A well-being perspective advances practices
farther
Many early implementations of the medical home
concept focused on patients with chronic disease and
on helping physicians develop care plans and improve
care coordination across providers. Supporting
practices in this area can help them meet minimum
medical home standards.
Provider support that fosters a shift in thinking,
from chronic care to patient well-being, moves
practices much farther ahead of the curve. Well-
being looks beyond physical health to include social
and emotional influences on healthcare needs and
productivity. Putting well-being in the physician’s
sphere of influence can significantly enhance physician
effectiveness in counseling patients as well as patient
satisfaction.
For example, NCQA medical home criteria include
providing a comprehensive health assessment. An
assessment that evaluates well-being can expand
patient and physician understanding of the factors
that influence health risks and care and improve the
quality and value of discussions.
Being better informed about patient health habits
and challenges enables physicians to better advise
patients on strategies to reduce risks and minimize
medical episodes. Having the ability to directly refer
patients to tobacco cessation, health coaching, and
other well-being support extends physician reach
and effectiveness. Physician financial incentives
4
could ultimately be tied to assessment measures of
well-being.
One leading health plan, partnering with Healthways
to deliver a network-wide primary care medical
home model, has added incentives for patients to the
equation. Those who access care through their primary
care physician and take steps to live healthier lifestyles
are eligible for financial rewards. Such a model helps
empower the physician and shift the focus to patient
well-being.
5) Locality matters
Cost-effectively serving the needs of most patients
requires care teams that go beyond the single
physician or practice, but the PCMH revolves around
the personal, local physician.
Care coordination and other services should be
delivered to and through physicians in a way that
supports this personal connection and reflects an
understanding of the community:
• Healthcare facilities and access
• Public programs and services
• Community resources for healthy living
Successful medical home models have put full-time
care coordinators within physician offices and within
community-based centers serving multiple practices,
based on patient volume and financial constraints.
Virtual technologies can improve the efficiency and
viability of delivering some value-added services
across practices of any size. Healthways professionals,
working onsite as integrated members of primary care
teams, are providing care coordination services across
one health plan’s entire book of business.
For example, physicians might refer patients to
phone-based or online smoking cessation, medication
adherence, or other behavior change programs and
be informed and involved in patient progress with the
help of local coordination resources. Coordinators that
serve as a conduit or point of contact for physicians
and patients can enhance access to, and engagement
in, patient-specific health support programs.
SUMMARY PERSPECTIVE
Effective, long-term relationships between physicians and patients underlie the medical home model.
For health plans helping physician practices to implement the model, relationships are equally central. It
takes time to build physician awareness and engagement, to adequately support the many elements of
the PCMH, and to transform the longstanding focus on episodic and critical care.

• Financial incentives that support the physician’s role

Elements for success in any
medical home initiative include:
• Physician engagement and implementation approaches
that reflect different levels of readiness to change
• Partners and programs that save physician time and
augment capabilities in key areas, including population
analysis, care coordination, and patient engagement

• Information and tools that shift the perspective from

chronic care to well-being

• Locally relevant support that fosters seamless physician

and patient access to a broad spectrum of integrated
resources

REFERENCES
1
Joint Principles of the Patient-Centered Medical Home, American Academy of Family Physicians (AAFP), American Academy of
Pediatrics (AAP), American College of Physicians (ACP), American Osteopathic Association (AOA), March 2007.
2
Fields, D., Leshen, E., Patel, K., “Driving Quality Gains and Cost Savings Through Adoption of Medical Homes,” Health Affairs 29,
no. 5 (2010): 819–26.
3
Patient-Centered Medical Home, AHA Research Synthesis Report, American Hospital Association Committee on Research,
September 2010.
4
Fields, D., Leshen, E., Patel, K., “Driving Quality Gains and Cost Savings Through Adoption of Medical Homes,” Health Affairs 29,
no. 5 (2010): 819–26.
5
“Characteristics of Office-Based Physicians and Their Practices: United States, 2003-04,” U.S. Department of Health and Human
Services, Centers for Disease Control and Prevention, National Center for Health Statistics, Series 13, No. 164, January 2007.

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Copyright © 2011 Healthways, Inc. All rights reserved.