A SMARTER OPERATIONAn ordinary day for Anderson, but extraordinary in the context of U.S. medicine. Unlike most primary-care doctors, Anderson and his team take ample time to counsel patients, guide them through lifestyle changes, and monitor chronic conditions with frequent checkups. He has helped patients avoid heart attacks, diabetes, and unnecessary surgeries by focusing on prevention and disease monitoring. He does all this while seeing 30 to 35 patients a day, compared with 20 to 25 for most practices. And he accepts Medicare. "This is what I always wanted to do," says the 56-year-old Anderson, who converted to a medical home five years ago. "I'm seeing far more patients and delivering the best care I've ever done." Anderson has three full-time nurses on staff and one part-timer, where most doctors have one or two. The nurses spend much of their time updating patient records, a job that once ate up hours a week on Anderson's schedule. "The history-taking just kills the doctor's time. I don't have to do any of that," Anderson says. It helps that he has an electronic medical-records system, found in only 17% of doctors' offices. Anderson also belongs to a group of 300 specialists and primary-care doctors, all on the same computer network, making it easier to consult with any doctor a patient may need. Anderson's nurses spend about 30 minutes with each patient on each visit, working through a long list of questions, assessing new health problems, and reviewing old ones. The nurses also discuss preventive measures and treatment options. Once Anderson takes over, he can spend the visit addressing a specific complaint and warding off future crises. To make sure he hasn't missed anything, he has a nurse sit in with him and the patient during the exam, pointing out details in the medical record that a busy doctor could easily overlook. As sensible as this routine may sound, it goes against the grain of most primary-care practices. Medicare and other insurers pay doctors on a fee-for-service basis that rewards quantity of care over quality. There are no reimbursements for discussing diabetes management with a patient, say, or talking over a case with a specialist. "The main hurdle to getting the medical home accepted more widely is the lack of compensation for cognitive work," says Harvard Business professor Clayton M. Christensen, co-author of The Innovator's Prescription: A Disruptive Solution for Health Care. IBM's Grundy is campaigning to change all that. There is some self-interest here, as IBM sells the electronic health-record systems that are a must for well-run medical homes. But Grundy, the son of missionaries who fought AIDS in Africa, also argues for social responsibility. He worries about the on-site clinics that many companies are establishing in an effort to control their health costs. "That's just opting out," he says. "We need to transform the system if we don't want two-tiered health care." IBM is working with several pilot medical-home projects around the country. The furthest along was started by Community Care of North Carolina almost six years ago, with 870,000 Medicaid recipients and 97,000 children enrolled. CCNC pays primary-care physicians in the experiment a premium of only $2.50 per patient per month to emphasize preventive, coordinated care. Yet a study by Mercer Human Resources Consulting Group (MMC) estimates the state saved $161 million on health-care costs in 2006 as a result. North Carolina aside, it is tough for many doctors to focus on coordinated care when there is no mechanism to pay them for their time. A nationwide switch to medical homes is also constrained by an extreme shortage of primary-care physicians, again because of the economics. Medicare reimburses primary care at a lower rate than any other specialty, so only 17% of medical graduates choose to enter the field. Anderson insists it is possible to set up a profitable medical home with current reimbursements, but only by increasing patient volume. In fact, he made the switch strictly for economic reasons. "Even though I was working 50 to 60 hours a week, I wasn't able to pay my bills, and one of my nurses was going to quit," he says. "I had to increase my patient load." A few years earlier he had heard a lecture about a Kentucky doctor who was able to see 50 patients a day after converting to a medical home. The efficiencies came from relying on a team approach, where nurses take on a lot of the record-keeping once left to the doctor. Trying the same model, Anderson hired an additional nurse, added some 15 patients a day, and was able to increase his annual billings by $200,000, to $620,000. He personally earns $240,000 and works 45 hours a week. Medical-home enthusiasts are lobbying for a change in primary-care reimbursements in any health-care bill that emerges from Congress, with a payment structure that rewards collaboration and prevention. They have a friend in Senator Max Baucus (D-Mont.), a key player in the health-care reform effort. As he points out: "Watching over a patient's full medical history... is a quality measure and a cost-control measure."
Business Exchange: Read, save, and add content on BW's new Web 2.0 topic networkSide Effects of "Medical Homes"
Last December the Center for Studying Health System Change (HSC), a nonpartisan policy research group in Washington, posted a detailed report on its Web site titled Making Medical Homes Work: Moving from Concept to Practice. While explaining the merits of this idea, the authors also spotlight some challenges. For example, primary-care doctors responsible for making the concept work might have to negotiate service agreements and exchange information with upwards of 200 other physicians attending to their patients.
To read more about medical homes and other ideas for health-care reform, go to http://bx.businessweek.com/us-healthcare-system/reference/