Blue Cross/Blue Shield promotes medical home demonstrations

The concept of a medical home is taking shape in several demonstration projects that include elderly patients with multiple chronic conditions, as well as fewer sick patients who stand to gain from wellness and DM interventions that are led by the patient’s physician. Some of the largest insurers in the country are leading the way in this effort. Blue Cross and Blue Shield Association (BCBS), Chicago, and 27 participating BCBS companies have joined with four major U.S. physician groups, national employers, and consumer groups to examine the medical home model of care in primary care demonstration projects around the country.

Many of these demonstrations are an outgrowth of existing efforts to focus on patients and give the lead to doctors. They were the main subject of discussion at a stakeholders’ meeting in Washington, DC, in early November 2007 about the patient-centered medical home.

“Our providers came to us back in 2004 and said, ‘Disease management belongs to doctors,’ ” says Jon Rice, MD, senior vice president and chief medical officer for BCBS of North Dakota in Fargo, who is organizing a demonstration in his state. “Our doctors said, ‘Give us the seed money, and we will manage patients and demonstrate cost savings.’ ”

Rice says the demonstration is an extension of the initial program that his company started in response to the request from doctors.

“Our program began with a series of stakeholder meetings to help us understand how to better add value to services provided by our physicians,” says Barbara Ann Muller, MD, medical director for Wellmark BCBS of Iowa. “We wanted to find a better way to support the doctor-patient relationship than the current broken and fragmented system.”

The North Dakota model

BCBS of North Dakota covers more than 450,000 members in North Dakota and Minnesota. MeritCare, an integrated clinic and hospital system and the state’s largest group practice provider, with more than 400 physicians, is the leader of this demonstration project. The doctors in this practice conducted an Advanced Medical Home Project beginning in 2005 that enrolled more than 3,000 members with only $20,000 in start-up money, says Rice.

Results for the enhanced diabetes DM services, including nurse education and an electronic medical record to monitor and manage patient needs, were measured using a control group.

The 2005 program resulted in savings of $500 PMPY, with the savings split equally between BCBS and the physician group.

Rice says the new demonstration program began September 2006 and has already enrolled 246 patients. He anticipates that approximately 2,000 members will be enrolled over the two-year course of the demonstration. Based on projected savings similar to the earlier demonstration program, BCBS is paying physicians $175 per enrollee up-front, says Rice.

“Because we already have an electronic health record, we can now focus on putting more people in place to help improve clinical outcomes,” he says.

This includes a nurse educator and chronic care case management nurses. “We felt that we would achieve more improvements by giving the practice money at the start of the program rather than at the end,” says Rice.

When the American College of Physicians first approached BCBS of North Dakota about participating in the patient-centered medical home demonstration project, the insurer wasn’t sold on how it might achieve additional improvements, says Rice. “We were already vertically integrated with our hospital affiliation, and the electronic health record had made our operations much more centralized and patient-centered,” he says. “We decided to focus this next improvement step on improving the relationship between doctors and patients by hiring a nurse who serves as a combination educator and patient facilitator.”

BCBS of North Dakota may expand the program during the course of the demonstration if the outcomes are positive, he says, but the company would likely wait to make this determination until December, when it has at least one year of claims data to review.

Registry helps decrease fragmentation

Two years ago, Wellmark BCBS of Iowa in Des Moines brought together stakeholders for what Muller describes as “frank discussions about the future.”

One of the key concerns raised at these meetings was that PCPs didn’t know what was happening with their patients when they were seen by other doctors, she says.

“Coordination of services was lacking,” says Muller. Physicians also realized that they were providing little to patients in the way of wellness and prevention. This wasn’t a priority during brief office visits.

“From the patient’s perspective, we heard about fears of harm when interacting with the healthcare system and their own doctors based on media reports and government reports,” says Muller.

“There were any number of support services, but they were not being aligned for the sake of the patients, and physicians were not coordinating care for their patients because they lacked information,” Muller adds.

Something had to be done. “After all, who knows the patient better than their own doctor?” she says.

“A true medical home has all of the patient’s information, and that’s the system that we want to achieve,” says Muller. “What we started to do then and will continue in this demonstration is to go back to the drawing board and find ways to improve and prevent illness and disease complications,” she says.

A major key is now in place—a patient registry that is tracking information from 1,200 clinicians. Office nurses now review each patient’s overall care plan and any corresponding services that have or have not been provided when the patient comes for a visit.

“The nurses are highly trained to use decision support tools and assess the implementation of the care plan,” says Muller.

For example, a DM nurse may see that a diabetes patient hasn’t had a foot or eye exam or that a patient with congestive heart failure hasn’t refilled a prescription drug. It also alerts the nurse and doctor to any potential medication interactions.

During the demonstration period, Wellmark is encouraging its participating physician groups to devise their own strategies for quality improvement and the implementation of a patient-centered medical home in their own practice setting, says Muller. “We don’t want to be prescriptive,” she adds. Each practice will choose an area to focus on. For example, one practice is implementing a diabetes DM program, while another is focusing on immunizations.

Wellmark will use the new standards for medical homes developed by the National Committee for Quality Assurance to measure the success of individual efforts.

As part of the demonstration, DM nurses will be on call for patients around the clock. Other new components available to practices are medication management and wellness prevention. “We want to give our physicians something tangible that can improve their practice,” says Muller.

This particular demonstration will not have a practice management fee.

“As demonstrations gain momentum, we will be able to see what works best and make financial commitments in those areas,” Muller says. The issue of pay-for-performance incentives for doctors is a growing dilemma. Should they be based on best practices, HEDIS measures, or actual patient outcomes? Do financial incentives actually affect physician practice behavior?

“Nobody really knows how to structure practice management payments or how to best reward physician practices,” says Muller. “Our doctors haven’t asked us for money. They want to improve their own practices and their patients’ care.”

National summit addresses benefits of patient-centered medical home

At a national summit held in Washington, DC, in early November 2007, several commercial providers—
as well as CMS—expressed support for what is now called the “patient-centered medical home.”

The hallmarks of this concept stand in contrast to Medicare’s premier DM program in the fee-for-service population, Medicare Health Support (MHS). The patient-centered medical home is led by the patient’s physician, who coordinates care for all chronic conditions that a beneficiary may have, and is driven by the goals of achieving improved clinical outcomes and reduced healthcare costs.

CMS is finding that the MHS model lacks integration with physicians, involves more than one physician overseeing multiple chronic conditions, and is facing resistance from hospitals and other providers who do not want to see a decrease in reimbursements for care, according to Linda Magno, director of demonstration projects for CMS.

Magno spoke at the Patient-Centered Call to Action Summit, a meeting sponsored by the Patient Centered Primary Care Collaborative (PCPCC), a coalition representing business leaders, policymakers, and more than 300,000 PCPs. Political leaders, such as former Speaker of the U.S. House of Representatives Newt Gingrich (R-GA) and Congressman Patrick Kennedy (D-RI), also were on hand to promote the medical home model.

Paul Grundy, MD, chair of the PCPCC, explains the new model this way: “The patient-centered medical home concept provides primary and preventive care that is personalized for each patient. It emphasizes the use of health information technology, including electronic health records, to help prevent and manage chronic disease and features consumer conveniences such as same-day scheduling and secure e-mail communications between the provider and patient.” Participants in the collaborative include four professional groups representing physicians (American College of Physicians, American Academy of Family Physicians, American Academy of Pediatrics, and the American Osteopathic Association) as well as business leaders, including Blue Cross Blue Shield Association (BCBS), WellPoint, CIGNA, Humana, Aetna, and UnitedHealthCare.

There are 27 BCBS companies across the United States that will participate in the patient-centered medical home demonstration projects. Some have already enrolled patients in the pilots, which are scheduled to last for a minimum of two years. These companies include Wellmark BCBS of Iowa in Des Moines and BCBS of North Dakota in Fargo.

Two task forces implemented

According to Joe Grundy, a PCPCC staff member, the Collaborative has implemented two working task forces to address future needs. Participation in the biweekly telephone meetings is open to healthcare providers working to implement a medical home, he says. (For more information about how to participate in the Tuesday calls, e-mail

The first task force is working on the development of a series of all patient-centered medical homes. These pilot programs would include commercial and government payers, such as Medicare, as well as large employers, says Grundy.

The second task force is providing technical assistance to state Medicaid programs that want to incorporate the principles of a patient-centered medical home into their health system. The task force is helping states to define the medical home and write service contracts that include a medical home.

Effect of a medical home

Attendees at the Patient Centered Primary Care Collaborative Summit received an “evidence document” outlining the effect of a patient-centered medical home on quality and costs. Research results included the following:

The Center for the Evaluative Clinical Sciences at Dartmouth College studied the effect of a medical home on patients with severe chronic diseases and found the following:

Lower Medicare spending (inpatient, reimbursements, and Part B payments)

Lower resource inputs (hospital beds, ICU beds, total physician labor, primary care labor, and medical specialist labor)

Lower utilization rates (physician visits, days in the ICU, days in the hospital, and patients seeing 10 or more physicians)

Better quality of care (fewer ICU deaths and a higher composite quality score)1

Barbara Starfield, MD, MPH, of Johns Hopkins University in Baltimore, conducted an analysis of studies comparing healthcare in the United States with healthcare in other countries.2 She concluded:

Adults with a PCP had 33% lower costs of care and were 19% less likely to die from the conditions than those who received care from a specialist (adjusting for health and geographic characteristics)

PCPs are associated with improved health outcomes for patients with cancer, heart disease, stroke, life expectancy, and self-rated care

In England and the United States, the availability of primary care is associated with a 3%–10% decrease in mortality

Researchers from RAND and the University of California Berkeley evaluated 4,000 patients who were managed clinically in a medical home model for diabetes, congestive heart failure, asthma, and depression. The researchers found that:

Patients with diabetes had significant reductions in cardiovascular risk

Congestive heart failure patients had 35% fewer hospital days

Asthma and diabetes patients were more likely to receive appropriate therapy3


1. “Variation Among States in the Management of Severe Chronic Illness.” Dartmouth Atlas of Health Care 2006.

2. Starfield B, Shi L, and Macinko J, et al. “Improving Chronic Illness Care: Translating Evidence into Action.” Health Affairs 2001;20:64-78.

3. A Robert Wood Johnson–funded evaluation of the effectiveness of the chronic care model and the Institute for Healthcare Improvement Breakthrough Series Collaborative in improving clinical outcomes and patient satisfaction with care, accessed June 19, 2007, at




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