For Medicare, There's No Place Like Home

The Obama Administration said Medicare will help fund state pilot projects that use primary care doctors and teams of coordinators to manage patient care and reduce costs.  The government will begin soliciting applications this fall and aim to implement the three year initiative early next year.  States that want to get the extra funding from Medicare will have to demonstrate that their programs will actually produce better results with lower health care costs.

All five bills to reform the health care system contain provisions for the widespread use of the medical home model.  The announcement in Washington yesterday by HHS Secretary Sebelius occurred with Republican Governor Jim Douglas of Vermont.  Vermont pioneered the medical home model and now can add Medicare along with Medicaid and three major private health insurers to its Medical Home initiatives.

The Vermont program, launched last year, pays doctors an extra $1.20 to $2.39 per patient per month to coordinate care.  Each physician's practices receive bonuses if a patient's health improves based on certain measurements. 

Based on the success of these early state initiatives, now that Medicare has entered the mix, the goal by HHS is to implement the medical home in states and communities nationwide.   For all this coordination of care to work and for participants to be able to demonstrate the impact of this mode of care delivery on patient's outcomes will require the type and degree of interconnected electronic medical records envisioned by the HITECH (Health Information Technology and Economic Health Act) portion of the Economic Stimulus Law (the American Recovery and Reinvestment Act of 2009 or ARRA).  This Act allocated a total federal outlay of over $36 billion to support the widespread establishment of just such an electronic health information network.

Companies which should benefit from the rapidly increasing spreading of the medical home model include both disease management companies and health IT companies such as:

1.  Healthways;

2.  Alere;

3.  General Electric;

4.  McKesson;

5.  CSC;

6.  IBM;

7.  Microsoft;

8.  Google;

9.  Accenture; and

10. Hewlett Packard

This author consults with leading institutions through GLG