News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
Sign In
One Outcome is Fewer Hospital Inpatient Admissions, Resulting in Lower Costs and Increased Doctors’ Income 

Early evidence indicates that patient-centered medical homes (PCMH) may be great for patients and beneficial to primary-care physicians and insurers—but not as favorable for hospitals because of reduced inpatient admissions. The good news for pathologist and clinical laboratory is a medical home program appears to improve utilization of medical laboratory tests.


The basic idea behind the concept to the medical home is to centralize care around a primary-care physician. This primary-care physician manages an integrated team of acute, chronic, preventative, and end-of-life specialists so as to provide patients with personalized care. Data from the first medical home pilot projects indicates that one outcome of a medical home programs is that fewer patients need hospital in-patient care.

In fact, according to several pilot projects, the increased doctor income and lower costs reported by medical homes directly correlates with fewer emergency department (ED) visits, fewer hospitalizations and fewer ambulatory admissions at the closest hospitals.

For example, Blue Cross Blue Shield of South Carolina and Summerville-based Palmetto Primary Care Physicians recently released the results of their medical home pilot that followed 809 diabetic patients at 22 sites and with 55 providers. The results showed that Palmetto Primary Care Physicians had “10.7% fewer hospitalizations, 36.3% fewer inpatient hospital days, and 32.2% fewer emergency visits.” And, of course, the potential testing also did not take place and therefore the income not earned.

As a result, many hospitals are turning their hospital-owned practices into medical homes, and purchasing existing medical home practices, in an effort to recover the lost income. But it’s not going well.

“There are hospital systems who are very interested in getting their primary-care physicians established as medical homes,” said Clayton Harbeck, Executive Vice President for MedSynergies, a technology, revenue-management and management services consultancy in a recent article for Modern Healthcare. “But if the window is not closed, it’s closing rapidly.”

Hospitals Out in the Cold
Pathologists and clinical laboratory managers need to pay attention to the care model that comprises the medical home concept. Medical homes have been around since the 1960s. But recent healthcare reform has heightened interest in the healthcare model.
In the Patient Protection and Affordable Care Act (PPACA), Section 3502 (“Establishing community health teams to support the patient-centered medical home”) specifically directs the Secretary of Health and Human Services (HHS) to “provide grants to or enter into contracts with ‘eligible entities’ to establish community-based interdisciplinary, inter-professional teams (‘health teams’). The health teams will support primary-care providers in the entity’s hospital service area in the creation of ‘medical homes.’ The grants will provide capitated payments to providers.”


PPACA further defines the medical home program, stating “The primary-care teams eligible for capitated payments may include medical specialists, nurses, pharmacists, nutritionists, dieticians, social workers, behavioral and mental health providers, doctors of chiropractic medicine, licensed complementary and alternative medicine practitioners and physician assistants.”

The term “medical home” as defined by this legislation is quite similar to the principles laid out by the PCMH. But the rest of the healthcare continuum—payers, physician’s practices and specialist groups—do so well with the medical home model, there’s no incentive to assist hospitals to join the group. In fact, hospitals’ focus on becoming accountable-care organizations (ACO) fuels resistance from parts of healthcare.

“The concepts of Accountable-Care Organizations and the Patient-Centered Medical Home are in lockstep with each other, “wrote Terry McGeeney, M.D., MBA, President and CEO of TransforMED, in a column on the TransforMED website, “The Patient-Centered Medical Home is patient-centered care based around a core set of principles to improve quality and safety, financial and clinical outcomes, physician and staff satisfaction, and patient engagement, while also lowering the total cost of care. PCMH is about improving outcomes—producing results not volume. Accountable Care is also about outcomes and improving quality while lowering costs. Accountable Care by its very name implies accountability and responsibility for both costs and care delivered.

McGeeney, however, goes on to state, “There’s valid concern in the physician world,” “that if the accountable care organizations are hospital systems, then the value of primary care and the principles of PCMH might be lost or at least severely diluted.”

Specific Roles Hospitals in a PCMH

A report by the American Hospital Association (AHA) titled “Patient-centered Medical Home: AHA Research Synthesis Report,” states, “The definition and structure of most PCMH initiatives do not include a unique role for hospitals. However hospitals can participate in the PCMH model in a supportive, complementary role to primary-care practices, in the following ways: 

  • “Convene physicians,
  • “Offer capital and IT infrastructure,
  • “Offer staff resources and other functionalities,
  • “Serve as a catalyst and offer management expertise,
  • “Serve as an administrator of bundled payment,

“Hospitals looking to participate in a PCMH can get started with the following recommended steps:

  • “Assess current organizational capabilities and resources,
  • “Identify opportunities in the community for partnership.”

Hospitals and clinical laboratories face challenges as the healthcare industry moves to models like ACOs and PCMHs. Fortunately, clinical laboratory outreach programs should perform well under such conditions.

“The PCMH model offers significant promise as a method of both improving the patient experience and reducing cost,” states the AHA report. “Hospitals face the challenge of not having a defined role in the PCMH model. Still, researchers believe that hospitals will begin a migration to embrace the PCMH model in coming years as a natural extension of clinical IT investments and increasing care coordination.”

The AHA report later states, “Hospitals looking to participate in the PCMH model will likely assume a supportive, complementary role to primary care practices. Successful implementation of a PCMH will however require significant investments on the part of primary care practices and other providers. Hospitals could play a key role in inspiring the practice leadership and personnel, taking pressure off them so they can engage in transformation, and helping them overcome inertia.”

Along with ACOs, medical homes are expected to play a major role in the federal government’s effort to reform the American healthcare system. For that reason, pathologists and clinical laboratory managers should track the implementation of both ACOs and medical homes. Medical laboratories will be required to support the clinical needs of these emerging models of healthcare.

Related Information:

Medical Home Wiki

Party Crashers (Modern Healthcare)

The Patient-Centered Medical Home and the Accountable-Care Organization

Patient-centered Medical Home: AHA Research Synthesis Report

Compilation of Patient Protection and Affordable Care Act