The patient-centered medical home could well be a transformative innovation-for some practices now, but for many others only in the long run.by Robert A. Berenson, Terry Hammons, David N. Gans, Stephen Zuckerman, Katie Merrell, William S. Underwood, and Aimee F. Williams ABSTRACT: The "patient-centered medical home" has been promoted as an enhanced model of primary care. Based on a literature review and interviews with practicing physicians, we find that medical home advocates and physicians have somewhat different, although not necessarily inconsistent, expectations of what the medical home should accomplish-from greater responsiveness to the needs of all patients to increased focus on care management for patients with chronic conditions. As the medical home concept is further developed, it will be important to not overemphasize redesign of practices at the expense of patient-centered care, which is the hallmark of excellent primary care. T h e pat i e n t-c e n t e r e d m e d i c a l h o m e (PCMH) is the newest idea being promoted as a transformative health system innovation. Proponents believe that it will improve the quality of and patients' experiences with care and alter the trajectory of inflationary health care spending. 1 The PCMH has been proposed by four primary care physician specialty societies; has been endorsed by a range of purchaser, labor, and consumer organizations, including IBM, Merck and Company, the ERISA Industry Committee, and AARP; and is being tested in demonstrations by major public and private health plans, including Medicare, various Blue Cross and Blue Shield plans, UnitedHealthcare, and Aetna. 2 The medical P r a c t i c e R e d e s i g n H E A LT H A F F A I R S~Vo l u m e 2 7, N u m b e r 5 1 2 1 9

Improved access to preventive care for older African-Americans with diabetes may improve health perception and use of the emergency department. The potential effect on total reimbursement is unclear. Future policy interventions to improve quality of care among Medicare patients with diabetes should especially target African-Americans.

Older diabetic patients of endocrinologists had higher utilization of diabetes-specific process of care measures and had similar functional status despite more diabetic complications. However, they received a more costly style of care than patients of family practitioners and general practitioners. Future work needs to explore the optimal coordination of care of diabetic patients among different health providers.

The private health plans that administer the Medicare drug benefit use various tools to encourage the use of generic drugs in order to lower total drug spending. Higher generic drug use also appears to encourage consumers to continue taking their medications. This study examines how different drug plan benefit and formulary designs influence the selection of generic drugs to treat high cholesterol among Medicare beneficiaries. We found that a low copayment for generic statins is the strongest factor influencing the use of these drugs, and eliminating the copay altogether has an especially large effect. Other tools that have an effect are higher copays and prior authorization or "step therapy" requirements for popular brand-name statins. In this drug class, where generics can be readily substituted for brand-name drugs for most people, adoption of the policies most effective in encouraging generic use could lead to considerable savings for the plans, Medicare, and enrollees. We estimate that every 10 percent increase in the use of generic, rather than brand-name, statins would reduce Medicare costs by about $1 billion annually. Plans could apply the lessons from this analysis and consider a zero copay for use of generic drugs, and Medicare might consider further incentives for plans to use benefit designs that increase such drugs' use.T he costs of medications that are still covered by patents continue to rise faster than medical price inflation.

Despite widespread interest in the medical home model, there has been a lack of careful assessment of alternative methods to pay practices that serve as medical homes. This paper examines four specific payment approaches: enhanced fee-for-service payments for evaluation and management; additional codes for medical home activities within fee-for-service payments; per patient per month medical home payments to augment fee-for-service visit payments; and risk-adjusted, comprehensive per patient per month payments. Payment policies selected will affect both the adoption of the model and its longer-term evaluation. Evaluations of ongoing demonstrations should focus on payment design as well as on care-and cost.T he patient-centered medical home is attracting a great deal of policy attention and will be the focus of new pilot projects in the wake of recently enacted health reform legislation. Yet there has been little consideration of alternative ways to pay for it. The medical home concept has been endorsed by a broad array of stakeholders and is the focus of nearly thirty demonstration projects.1 In the recent health care reform debate, medical homes were variously referred to as a model for organizing care and as a payment approach.