title: Reduced acute inpatient care was largest savings component of Geisinger Health System's patient-centered medical home.
abstract: Early evidence suggests that the patient-centered medical home has the potential to improve patient outcomes while reducing the cost of care. However, it is unclear how this care model achieves such desirable results, particularly its impact on cost. We estimated cost savings associated with Geisinger Health System's patient-centered medical home clinics by examining longitudinal clinic-level claims data from elderly Medicare patients attending the clinics over a ninety-month period (2006 through the first half of 2013). We also used these data to deconstruct savings into its main components (inpatient, outpatient, professional, and prescription drugs). During this period, total costs associated with patient-centered medical home exposure declined by approximately 7.9 percent; the largest source of this savings was acute inpatient care ($34, or 19 percent savings per member per month), which accounts for about 64 percent of the total estimated savings. This finding is further supported by the fact that longer exposure was also associated with lower acute inpatient admission rates. The results of this study suggest that patient-centered medical homes can lead to sustainable, long-term improvements in patient health outcomes and the cost of care.
authors.affiliation: Daniel D. Maeng (ddmaeng@geisinger.edu) is a research investigator for the Center for Health Research at Geisinger Health System, in Danville, Pennsylvania.
authors.forename: Daniel D
authors.initials: DD
authors.lastname: Maeng
authors.affiliation: Nazmul Khan is national advisory manager at PricewaterhouseCoopers, in New York City.
authors.forename: Nazmul
authors.initials: N
authors.lastname: Khan
authors.affiliation: Janet Tomcavage is senior vice president and chief, value-based strategic initiatives, at Geisinger Health System.
authors.forename: Janet
authors.initials: J
authors.lastname: Tomcavage
authors.affiliation: Thomas R. Graf is chief medical officer for population health and longitudinal care service lines at Geisinger Health System.
authors.forename: Thomas R
authors.initials: TR
authors.lastname: Graf
authors.affiliation: Duane E. Davis is a consultant at xG Health Solutions, in Columbia, Maryland. At the time this research was done, Davis was a vice president and chief medical officer at Geisinger Health Plan.
authors.forename: Duane E
authors.initials: DE
authors.lastname: Davis
authors.affiliation: Glenn D. Steele is president and CEO of Geisinger Health System.
authors.forename: Glenn D
authors.initials: GD
authors.lastname: Steele
mesh_terms: D000368:Aged; D000369:Aged, 80 and over; D017046:Cost Savings; D005260:Female; D006760:Hospitalization / Q000191:economics*; D006801:Humans; D008297:Male; D006278:Medicare; D018802:Patient-Centered Care / Q000191:economics*; D011320:Primary Health Care / Q000191:economics; D014481:United States
keywords: Cost of Health Care; Managed Care—Medicare < Managed Care; Organization and Delivery of Care; Primary Care; Quality Of Care