Perspective: Medical home pivotal to addressing healthcare reform, workforce issues

Daniel J. Derksen, MD, is professor and chairman of the public health policy and management section of the Mel and Enid Zuckerman College of Public Health at the University of Arizona. He recently spoke with Medical Economics Editor-in-Chief Lois A. Bowers, MA, about Medicaid expansion, health insurance exchanges, medical homes, and healthcare workforce issues.

Q: The role of medical homes in primary care is increasing. Could you talk about your experience in this area?

A: I spent a year, 2007 to 2008, in Washington, D.C., working for Sen. Jeff Bingaman, the [former] senator from New Mexico, while on a sabbatical from the University of New Mexico as a Robert Wood Johnson Health Policy Fellowship. During my time there, he was the only Democrat on both the Senate health-related committees-the Committee on Finance and the Committee on Health (and its Subcommittee on Health Care), Education, Labor, and Pensions. I worked on several issues that year, one of which was Medicare medical homes legislation. I also worked on health workforce legislation, addressing the question, “If we’re going to cover more people and we’re going to do health reform and give more people health insurance, how do we make sure that we have an adequate workforce and then take care of them and deal with the pent-up demand of an uninsured population?” And of course both of those things are now playing out.

Much of the work I did that year, researching and drafting health workforce provisions, ended up in the Affordable Care Act (ACA) and Title V thanks to Sen. Bingaman.

When I finished that fellowship, I returned to New Mexico and was president of the state medical society. Two of the highest priorities when I was president were reducing the number of uninsured-New Mexico had the second-highest percentage of uninsured of any of the states-and, for those on Medicaid, controlling the rate of cost growth in the Medicaid program. In D.C. I had worked on using the Patient-Centered Medical Home (PCMH) model for a Medicare population. I used some of that work to develop a pilot for a PCMH for Medicaid populations. We got more people who are uninsured enrolled in Medicaid. We succeeded in getting that legislation through the state house and senate and signed by the governor.

Q: How can medical homes address the care needs of the Medicaid population while also decreasing healthcare cost growth for a state?

A: The managed approach looks at how to make the care more patient-centered, how to look at a group of patients who are covered by Medicaid more as a population. These efforts are aided through things such as recognition for the PCMH through the National Committee for Quality Assurance and patient registries in a subset of Medicaid patients who have diabetes or overweight/obese, hypertension, high cholesterol-the things that tend to cause higher costs if they are not managed. So the PCMH is a logical place to start to better manage that care to reduce avoidable hospitalizations, things can be better managed in a primary care setting and reduce that unnecessary or avoidable hospitalization due to complications of these chronic diseases.

Q: You’ve been involved with health insurance exchanges, and New Mexico is planning to have a state-operated exchange. Why do you think the state chose to do that when a lot of states are choosing not to do so, and how do you think that decision is going to benefit the state and its residents?

A: After I finished my year as president of the state medical society, a new governor was elected, and the governor’s senior staff asked whether I would consider being the director of the office of healthcare reform for New Mexico. One of the major initiatives was preparing the state to be ready for ACA implementation-Medicaid expansion, health insurance exchange-but in addition to those issues, we also were focused on inadequate workforce to take care of the newly insured. In New Mexico, 23% of the population is uninsured, and the state has the opportunity to see the highest reduction in percent of uninsured in the country. Potentially, through Medicaid expansion and through health insurance exchanges, 300,000 of the states’ 450,000 uninsured would be covered by those two ACA provisions. In the 8 months I did that work, we were successful in securing a $34 million Center for Medicare and Medicaid Services establishment cooperative agreement to start to work on establishing a state health insurance exchange.

I was very pleased that Gov. Martinez decided to go forward with a state-operating exchange and is planning to expand Medicaid. That really does ensure health coverage for a significant portion of the uninsured population in the state, and it’s quite courageous. There’s an economic incentive to do so, especially starting January 1, 2014, when it’s started, because in the first 3 years, the Medicaid expansion is 100% federal Medicaid assistance percentage, so almost all of the expense is born in the first 3 years by the federal government and then that decreases slowly through 2020, when the assistance decreases to 90%. In New Mexico, for example, it is estimated that the assistance would bring in to hospitals about $1 billion in revenue per year, once fully established. And in addition to the new revenue for the covered through Medicaid expansion, there would be the reduction in the uncompensated care costs for hospitals and the physicians who take care of uninsured and self-pay patients.

In Arizona, an economic analysis estimated that it would bring in $2 billion in new revenue per year to the state, decreasing uninsured by 300,000 for the Medicaid expansion. And it would create 10,000 to 20,000 jobs.

Q: With an expanded Medicaid population and health insurance exchanges, how do you think workforce needs can be addressed, and how do you think doing so will affect current primary care doctors?

A: The Congressional Budget Office estimates a net increase in covered lives of the uninsured of about 30 million. Where will that care be received? 

We know from some of the data that are out there that we have a significant shortage of primary care providers in this country. It’s not just an issue of the numbers of physicians or the number of primary care providers. It’s also the distribution of those providers to rural areas and inner-city underserved areas. States will have to address several challenges to ensure an adequate workforce.

Pre-enrollment for both Medicaid expansion and insurance exchange starts October 1, 2013, and full operation is January 1, 2014. You’re not going to be able to [have] the number of physicians...that you would like to ensure access to care. So what can we do?

That brings us back to team-based care, community-based care through models and strategies as envisioned in the PCMH. A primary care physiciandirected team with nurse practitioners, physician assistants, nutritionists, community health workers, and others manages care. And you have electronic health record tools such as patient registries for your patients with high-cost chronic diseases such as diabetes or hypertension or high cholesterol.

Payers will have strategies for paying for this team-based type of management. So instead of paying a fee every time a service is delivered-the fee-for-service model-they’ll be paying for most care that’s done by physicians a per-member amount that rewards comprehensive, coordinated care across a set of health outcomes.

The challenge for states and for payers is to align incentives and create education programs so that patients can be more in control of their own management and to enable the care we provide to be more patient-centered so that patients can access the information-the laboratory results, the medications-that they need in as easy a manner as possible.

Through provisions of the ACA such as the navigator function, primary care practices will be able to help [the formerly uninsured] get enrolled and provide care and get those patients to the next level of service and the next level of care, and if they need it, refer them to a specialist or for a procedure or for an imaging test or whatever they need, and those things will be covered as well.