Data on "young" medical homes is still new, but trends looking good

There isn't a lot of data on the cost savings of state medical home initiatives because the state pilots and demonstrations are still new, according to Mary Takach, MPH, RN, the lead researcher on the Washington, DC-based National Academy for State Health Policy's Medical Homes II Consortium project.

Many medical home programs have very comprehensive evaluations underway, says Ms. Takach, but these are not yet complete. Rhode Island is currently evaluating its data in order to report the outcomes later this year, she notes.

"The two-year window of their pilot ended in October 2010, and evaluators are looking at the data now," she says. "Because so many of these initiatives are so young, we don't know if they are meeting cost and quality goals."

However, Ms. Takach adds that several state Medicaid medical home programs have reported trends as part of their annual reports or reports to the state legislature. "This provides some evidence of trends that states are seeing, which might be informative for others to know about," she says.

North Carolina's program has reported data demonstrating the potential for medical homes to cut the rate of spending, says Ms. Takach. The program saved over $231 million in state fiscal years 2005 and 2006, according to a 2007 report prepared by Mercer, a consultant specializing in the analysis of program effectiveness.

"Not only were they able to slow the rate of growth, but they also saw some improvement on health outcomes for asthma, for instance," says Ms. Takach.

Signs are encouraging

While North Carolina and Oklahoma have statewide medical home initiatives in place, says Ms. Takach, others states have implemented smaller demonstrations limited to one region or subpopulation. "In the broad-based programs, there are encouraging signs that this may be a way to tame soaring costs growth in Medicaid," says Ms. Takach. Oklahoma reported a decline in per capita member costs of $29 per patient per year, from 2008 to 2010, she notes.

Still, states may be taking a "wait and see" approach until more comprehensive data is available, says Ms. Takach. "If researchers were to look at this data, I don't know if they would call it robust or evidence of success," she says.

While North Carolina and Oklahoma provide encouraging evidence that reforms can be done in a budget-neutral way and even produce some savings, says Ms. Takach, states may need more convincing that the upfront investment in infrastructure will really pay off.

"Still, the word must be getting out about these promising trends. We are seeing new legislation being passed, despite budget deficits," says Ms. Takach.

Primary care demand

While Oklahoma previously had a very flat enrollment rate of Medicaid providers, says Ms. Takach, 244 additional physicians enrolled after the program was implemented. "Reforming payment and delivery system can attract new providers," she says. "That is something for other states to keep in mind as they face the incredible demand for primary care that will be placed on state Medicaid programs."

Colorado has reported improvement in access to primary care for children, says Ms. Takach, after a statewide medical initiative for children enrolled in the Children's Health Insurance Program was implemented. While only 20% of the state's pediatricians accepted Medicaid patients in 2006, the year the program was rolled out, says Ms. Takach, 96% now accept Medicaid.

"Before the program was rolled out, they had a very hard time finding pediatricians that would accept Medicaid," says Ms. Takach. "That is a good sign that the medical home approach is satisfying physician expectations."

Lowest hanging fruit

When it comes to cost savings from medical homes, Ms. Takach says that the "lowest hanging fruit" is reduced inappropriate utilization of services, including decreased ER use and 30-day readmission rates.

Vermont reported mixed data on its medical home pilot, however, with decreased inpatient costs and ED use in one region and slightly increased costs in another region.1 "It's too early to figure out why costs fell in one area of the state and rose slightly in another area of the state," says Ms. Takach. "It's going to be a 'wait and see,' as they are able to evaluate the data."

Certain expenditures are expected to increase initially with a medical home program, adds Ms. Takach, such as primary care visits and prescription drugs. It's not realistic to expect to see a return on investment in a year or even two years, she says.

"Maybe in three years, you can see some of these transformational changes taking hold," says Ms. Takach. "It is really hard to manage expectations around these programs. It does take time, and that time isn't being given in many cases."

Contact Ms. Takach at (207) 874-6524 or


1. Beilaszka-DuVernay. Vermont's blueprint for medical homes, community health teams, and better health at lower cost. Health Affairs 2011; 30:3383-3386.