Five Concepts that Could Transform Primary Care and Healthcare Overall

March 13, 2014

Primary-care transformation is not just about meeting standards, it requires a fundamental change focused on reducing cost and utilization.

A three-year study of about 120,000 patients in over 50 Pennsylvania practices, half Patient-Centered Medical Homes (PCMH) and half traditional, found that there was little difference in quality, utilization or cost. The study recently appeared in JAMA.

The National Committee for Quality Assurance (NCQA), which provides recognition to practices that have transformed into medical homes, shot back a day later saying, “The study is based on outdated NCQA PCMH standards and contradicts several other studies that have shown improvement in cost, quality, access and patient experience.”

We believe that the researchers that conducted the study are not only wrong in their overly simplistic conclusions; they are having the wrong conversation entirely.

The problem with the NCQA PCMH program is that in order to start, it had to create standards for a program before there was any quantitative evidence on what worked or what didn’t work. Essentially, practices that sought to achieve recognition were seeking to meet standards that were never tested or proven to be effective. The result is a PCMH model that is internally focused, rather than coordinating the overall care of patients as they navigate the healthcare system, exacerbating fragmentation instead of easing it.  

Why is this important? Because primary care only controls about 5 percent of the spending. A 40 percent improvement in PCMH over traditional medicine is only a 2 percent overall cost reduction.

Primary-care transformation is not just about meeting standards, it requires a fundamental change focused on reducing utilization and the unit costs of high-cost medical services. Reducing utilization is about the application of evidence-based medicine and the long-term optimization of the health status of populations. Unit cost reduction is about concentrating referrals to the lowest-cost providers of service. To do that you need organization, alignment, communication, measurement, and a reimbursement system that aligns with the necessary future state, not yesterday’s business models.

Individual PCMH practices cannot revolutionize healthcare, but as a building block for a horizontal network of transformed primary care, they can become Galileo’s lever and move the healthcare world.

What’s the secret sauce?

• It takes a team. Coordinating care is not just making appointments. It’s about engagement, and navigation. Care cannot be managed by software systems any more than a hammer can build a house. It takes committed professionals working together with the patients themselves. After all, it is “patient centered.”

• It requires a focus on waste and redundancy. Incentivizing primary care to meet internal metrics without empowering it to manage the entire continuum of care leaves $800 billion in annual waste from redundant testing, discordant motivations, and enforced fragmentation virtually untouched.

• It requires recognition that data is not information. EHRs that can’t talk to each other are as archaic as paper charts, only more difficult to use. Transforming data into usable, actionable information and making it available to the entire treatment team is still years away for most due to selfish proprietary thinking. EHRs cannot integrate clinical data with social and demographic data to intelligently stratify disease and manage resources to reduce risk were there are opportunities. This should be considered true meaningful use.

• It requires accountability. Obamacare’s Accountable Care Organization (ACO) initiatives have encouraged putting the wrong entities in charge. Hospitals have to be vendors to physician led treatment teams, not their owners. Soaring rhetoric and noble public policy cannot change fiscal reality. Hospitals cannot survive without patient flow, and successful ACOs reduce it.

• It requires an understanding that insurance is not healthcare. Obamacare’s “affordable” premiums with soaring deductibles shift costs and take us back to “major medical” (catastrophic insurance) creating financial barriers towards long-term health status improvement. Further, this creates a looming crisis of acuity for the next administration, not to mention the human cost, which seems to be lost in its entirety among government planners.