(Given as testimony on November 19, 2013, to the Iowa Legislature’s Integrated Health Care Models and Multi-Payer Delivery Systems Study Committee)

The Holy Grail of health reform is controlling costs while still providing access and quality. In my mind, the key to finding this Holy Grail is care coordination, forms of which can include patient-centered medical homes (PCMHs) and accountable-care organizations (ACOs). As a former member of the federal Advisory Board for the federal health-care Consumer Operated and Oriented Plan (Co-Op) Program, I helped write recommendations regarding “integrated care,” which was a legal requirement for becoming such a co-op. Our Advisory Board recognized both PCMHs and ACOs as reasonable forms of “integrated care.”

Today and tomorrow, you will hear various explanations and predictions regarding these forms of care coordination. As a member of a 2007 Iowa Legislative Commission regarding health reform, I supported PCMHs; at the end of that effort in 2008, health-care reform law HF 2539 was enacted, recommending that every Iowan become a member of a PCMH and establishing the state Medical Home System Advisory Council. Medicaid also has supported the concept of PCMH with its Health Home provision.

As a practicing family physician, geriatrician, and hospice medical director whose clinic is certified by the National Committee for Quality Assurance as a Level 3 PCMH and who has Medicaid Health Home patients, I have been tasked with discussing the Iowa lay of the land for private-sector PCMHs.

Private-sector primary care can be easily divided between employed physicians of the major hospital systems and the rest, which would include physicians working in multi-specialty clinics, in small groups, as solos, and in affiliation with small hospitals. I shall reserve my remarks for this second group of primary-care physicians.

There is, at times, a palpable tension between PCMH and ACO, which I would like to explore at the end.

For me, PCMH, at it essence, is a team approach to patient care, with the patient, the primary-care physician, and various members of the physician’s clinic all vying to maintain and improve health, physically and emotionally, in a sustainable manner. There are supra-structural requirements, which include electronic medical records with email accessibility, 24-hour nurse call centers, and urgent care for nights and weekends; equally, there are infrastructural requirements, which include open access (which means same-day appointments for sick patients), health coaches, disease registries, patient engagement, and highly trained physicians. I would add that Paul Grundy, godfather of the national PCMH effort, limited the physician role to two key functions: creating healing relationships and dealing with tough diagnostic and therapeutic dilemmas, with most of all other functions being performed by the team. The patient and the PCMH must both be held somewhat accountable for effort and quality.

When PCMHs are done well, as studies from New Hampshire, Pennsylvania, Utah, and upstate New York overwhelmingly have found, quality is improved and savings are obtained. PCMHs can and do reduce emergency-room visits, hospital admissions, hospital re-admissions, imaging studies, and cross-specialty consults. From my experience, PCMHs can improve diabetic control, improve mental-health care, increase connectivity with patients, and increase use of early-detection tests and immunizations. Finally, my health coaches are now certified application counselors (CACs) who, starting on Thursday, will be helping my patients sign up for health insurance on the Exchange. Two salient points come from evaluating these efforts in other states: One, PCMH — that is, care coordination — costs money; it is a work product. Two, the savings have outweighed the costs of care coordination. Iowa was positioned three years ago for a multi-payer PCMH pilot but was denied when Wellmark vetoed it because of its desires to concentrate on an ACO approach. In contrast, the regional co-op (Iowa-Nebraska CoOportunity Health) has chosen to pilot a PCMH project using small physician groups.

To facilitate this pilot, six and soon to be seven rural clinics have joined the Heartland Rural Physician Alliance (HRPA); several other clinics that are either independent or affiliated with a local hospital are also considering joining. The future for PCMH centers on two additional features that I do not have yet: case managers on site for my patients with the most complicated cases and a point-of-service dashboard that would allow me to view a patient’s claims data from the payer at the time of seeing the patient.

ACOs are obviously the rage for health-cost-reform efforts. Wellmark, Medicare, Medicaid, and others in Iowa and throughout the country are engaged or planning for ACO contracting. Through care coordination, the initial goal for ACOs is to receive a portion of shared savings with the ultimate goal being assumption of risk. ACOs in Iowa for these various efforts now include large hospital systems, multi-specialty groups, and pure primary-care groups. For example, HRPA is part of a multi-state, virtual Medicare Shared Savings ACO, with its leadership out of Massachusetts; this Massachusetts effort does offer that point-of-service dashboard to its primary-care providers.

The tension between PCMHs and ACOs lies, one, in the division of work to accomplish care coordination and, as always, the division of monies; and two, in the assumption of risk.

Five major questions can be entertained:

1. How will the cost of PCMH care coordination be acknowledged and maintained in a shared-savings model?
2. When risk assumption becomes the baseline contracting principle, will the same dangers that affected HMOs return?
3. Can primary-care groups assume risk? Will they want to?
4. If the vast majority of savings (after the costs of care coordination are accounted for) can be realized by primary-care physicians using PCMHs, why would primary care want to divide that proportion of shared savings with hospitals and specialists?
5. Most importantly, when shared savings are fully realized, how will the total cost of care be computed?

For state legislators, the following questions are key:

1. Will the large hospital systems be fair to rural, county health care?
2. Will there be room for independent physician groups in a Medicaid regional ACO model?

My recommendations:

1. Allow the free market to play out.
2. Guard health care in rural areas.
3. Make sure small physician groups that meet criteria be allowed to participate in future Medicaid.
4. Emphasize care coordination and realistically negotiate risk throughout all parties — providers, payers, and patients.
5. Recognize behavioral health as a major key to health reform.