Making Margin with the Medical Home

Karen Minich-Pourshadi, for HealthLeaders Media , September 13, 2011
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Along with funds Westshore Family Medicine receives through grants, by meeting the payers’ quality standards, and increasing the number of patient visits per day, the practice also benefits from other resources. It receives Medicare payments for being a hospital facility site, and the level three National Committee on Quality Assurance designation it earned generates an extra $3 per month per member in insurance reimbursement, Brown says.

All told, the added income has taken the practice “from being in the red and having to be supported by the hospital, to consistently being in the black and the hospital benefiting from having us,” Brown says.

While Westshore Family Medical has been able to make margin on the medical home, some finance leaders still wonder how this can translate on a larger scale. “The medical home puts the primary care physician at the crossroads of all the health conversations of that patient, and the physician really needs to be compensated for it,” says Glenning. “If you couple a medical home, an ACO, and an EMR, you are certainly laying the groundwork where you can make a fundamental change in patient outcomes, but if there’s no change in reimbursements, then fundamentally, is anything going to end up differently?”

Glenning believes that for a medical home to thrive on a larger scale calls for a panel approach with physician extenders and advance practice nurses, and health plans would need to reimburse for these practitioners at the same level as the primary care physicians. Better use of the physician extender is a concept that dates back to the 1970s when Roger Barkin, MD, produced an American Journal of Public Health article, “Directions for Statutory Change: The Physician Extender.”

With primary care physician shortages expected to worsen when the PPACA-mandated newly insured arrive, efficient use of physician extenders will be necessary. “The physician is glad to have the help throughout the day, yet the payment system doesn’t create an incentive for the opportunity to use them,” he says. “I don’t believe there is going to be any one strategy that gets us out of the problem we’re in, so we have to have a willingness to experiment and be entrepreneurial. We can’t wait for the perfect pitch and swing before we move.”

Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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