ACOs can help medical homes succeed

New research suggests that accountable care organizations should make payments to patient-centered medical homes or take other steps to support them financially, since their goals are similarly transformative.

Medical homes' approach to providing primary care is a necessary component of ACOs' efforts, said Samuel Edwards, MD, lead author of a recent paper in The Journal of General Internal Medicine and a fellow at Harvard Medical School.

"Accountable care organizations will need to invest in high-functioning primary care in order to succeed in their contracts," Edwards said. "So we're trying to think about the optimal way for accountable care organizations to build and support that primary care infrastructure."

At this point, ACOs are organized in different ways. Some have integrated primary care practices and pay physicians by salary, while in other cases ACOs have looser links to practices and physicians are still paid on a fee-for-service basis. If ACOs "don't have the ability to change the way physicians are paid, it's hard for them to motivate physicians to change the way they work," Edwards said.

ACOs could make payments to PCMHs as a way to assist in the transformation of primary care, the paper suggests, although it notes that mandating such payments could interfere with ACOs' efforts to develop their own strategies. 

ACOs could also work to support the PCMH model within their organizations by hiring primary care physicians and dedicating more resources to urgent care, as well as providing those physicians with resources such as practice coaching, healthcare IT and a care coordination infrastructure. Or ACOs could revamp the way they measure physicians' performance to encourage the adoption of PCMH principles.

Cost vs. benefit

Rob Schreiner, MD, managing director of the healthcare practice at Huron Consulting, said the human and IT resources needed to support more coordinated primary care "cost money, and the money has to come from somewhere." It makes sense for the funding to come from ACOs, which should benefit financially as improved primary care results in changes that cut costs, such as fewer ER visits, Schreiner said.

While some recent studies have called into question the PCMH model's ability to provide savings, Schreiner said confining the analysis to Level 3 PCMHs provides "very strong evidence that you can reduce ER visits and inpatient days by about 20 percent or so."

WellPoint announced back in 2012 that it would pay more to primary care practices that signed on to deliver patient-centered care, he noted. "WellPoint, one of the largest players, believes there is an ROI in lower hospital days, lower cost per member per year," Schreiner said. "It's the private payers that are going to jump on this bandwagon."

The practices the PCMH model and ACOs are trying to encourage are helpful, said Bob Williams, MD, a director at Deloitte Consulting. "But it's important to add those interventions based on the identified needs of the populations being served." 

"The cost of putting all of these interventions in is significant, and there's not a lot of capital in the system right now to support that," Williams said. "Our belief is you need a business case based on the population you're serving to determine if it's worth investing those resources."