Medical homes reduce diabetes costs

May 14, 2014

Patients treated by physicians in designated medical homes reduced overall medical costs by 21% in the first year

Diabetic patients treated by physicians in practices that were designated medical homes had reduced overall medical costs by 21% in the first year compared to diabetic patients treated by physicians in practices that were not medical homes, according to results from a three-year study by Independence Blue Cross (Independence).

This improvement was driven largely by a reduction in inpatient costs, which fell by 44%. In subsequent years, the patients in medical homes had 34% fewer emergency department visits, 18% fewer specialist visits, and outpatient costs dropped by 32%. 

“The study demonstrates the benefits of the adoption of the medical home model in helping to improve quality, reduce gaps in care, and for some populations, such as the chronically ill or diabetics, reduce overall medical costs,” says Somesh Nigam, chief informatics officer, Independence. “In another medical home study, patients treated in medical homes showed marked improvements in important health outcomes, such as improvements in getting their bad cholesterol under adequate control and reductions in the number of patients with poorly controlled diabetes.”

Medical homes are a useful way to improve value in healthcare, however, it is not the only way to raise the quality and lower the cost of healthcare, Nigam says.

“As healthcare continues to evolve, medical homes are likely to form the foundation of accountable care organizations and similar efforts to align clinical and financial incentives to improve value,” he says.

Independence has supported the patient-centered medical home (PCMH) model since its pilot in 2008, and 41% of its network primary care physicians are now recognized as medical homes.

“We believe this model of care is an effective way to organize primary care practices to allow them to concentrate on improving performance,” Nigam says. “The studies were conducted to evaluate how medical homes in our network performed regarding costs and quality compared to practices that had not yet made the transition to this model of care.” 

The study results appear in the Journal of Public Health Management and Practice.

The study from 2008 to 2011 involved nearly 4,000 Independence members: Half were treated by doctors in medical home practices and half were treated in practices that were not medical homes. A difference-in-differences longitudinal research design was used to analyze differences between both PCMH and non-PCMH practices on per-member, per-month costs and utilization. The statistical models controlled for baseline practice and patient-level characteristics through two-step propensity score matching. The regression analysis on program effect further controlled for within-practice variation.