Time to challenge ROI of medical homes

October 1, 2009

Reported outcomes from medical homes must be able to discern between true and preceived cost savings, and North Carolina is an example of what can go wrong

Yet healthcare expenses continue to rise. How can this be? The savings claimed for these initiatives are illusory, but usually all that is lost is the cost of the initiative itself.

Not so with patient-centered medical homes. Medical homes are the first innovation whose cost is high and whose implementation actually can increase costs far beyond the program itself. This is exactly what happened in the Community Care of North Carolina Medicaid medical home program.

REALITY CHECK

No one applied a "plausibility check" to curious findings of savings-findings at odds with common sense:

What could explain the difference between the actual results and the report? Actuaries rely heavily on trend assumptions, changes in which can swing outcomes. A journal article from the actuary indicates that "choice of trend has a large impact on savings." A valid analysis requires an understanding that trend is not a "choice."

A specific level of savings was achieved, and it's up to the evaluator to find it. Reliance on variables that depend on personal choice automatically invalidates any result, as any outcomes-numerate analyst knows.

Meanwhile, if initiatives and access decisions on this scale continue to be considered generally, the entire healthcare sector needs to learn how to analyze reported outcomes more critically in order to distinguish true cost savings from fallacious results.