PCMH Saves Costs in the VHA

Date: 

07/21/2014

In 2010, the Veterans Health Administration (VHA) began the Patient Aligned Care Teams (PACT), a nationwide initiative “that reorganized care at all [their] primary care clinics in accordance with the patient-centered medical home [PCMH] model.” The goal of PACT is to provide comprehensive, longitudinal, patient-centered primary care by establishing team-based care, increasing access to same-day care, improving care management and coordination, and increasing focus on patient-centeredness. It also builds on efforts to integrate behavioral health and primary care that were started in 2007. A recent study of 11 million primary care patients analyzed PACT data from fiscal years 2003-2012 to monitor changes in health care utilization and cost after implementation. Results show that after 2-1/2 years, PACT caused a slight decrease in hospitalizations for ambulatory care-sensitive conditions and specialty mental health visits, and a slight increase in outpatient primary care visits for patients 65 years and older. These effects avoided $596 billion in costs where $774 billion was initially invested in the initiative. Although there was no positive return on investment and a net loss of $178 million, PACT is still evolving and these trends in utilization and cost avoidance are favorable. Thus, the PCMH model does not pose a huge financial risk for the VHA.

The costs PACT avoided were largely due to the decline in specialty mental health care visits. This reduction may have been enabled by the integration of primary care and mental health. Because mental health care was more accessible in primary care, PACT teams perhaps had less need to refer patients to specialty mental health services. In turn, the increase in primary care visits might have also contributed to these cost savings. Due to counseling of patients with complex chronic conditions by PACT nurse care managers, patients might have been encouraged to shift more of their care from Medicare to the VHA. Although, this trend may have increased visits within the VHA, it nullified costs associated with obtaining care elsewhere. Over time, these factors’ impacts on cost savings will become clearer. Still, savings are expected to remain if other components of PACT become well integrated into primary care. Nonetheless, the VHA’s adoption of the PCMH model has certainly improved the quality of and satisfaction with care.

Read the related article: http://www.ncbi.nlm.nih.gov/pubmed/?term=Patient-Centered+Medical+Home+Initiative+Produced+Modest+Economic+Results+For+Veterans+Health+Administration%2C+2010%E2%80%9312