Health Risks in Medical Homes and their Effects on Emergency Department and Inpatient Expenditures: a Focus on Patient-Centered Primary Care Homes in Oregon

The fragmented approaches to delivering health care services in the United States, along with the associated structural inefficiencies and unsustainable increases in health care costs affecting all payers, compel the need for reform. Various federal and state-level delivery system reform models have emerged in response. The Medical Home (MH) is one of such reform models. In 2004 a national initiative entitled “The Future for Family Medicine Project” identified the lack of emphasis on comprehensive primary care, especially for chronic care patients, and proposed the introduction of MHs to improve comprehensive primary care delivery for every patient. Oregon’s MH variant, the Patient-Centered Primary Care Home (PCPCH), was introduced in 2009 as part of a state-wide health reform initiative ushered in by the passage of House Bill 2009 to promote the Triple Aim. Since 2011, over 600 primary care clinics have been recognized as PCPCHs. Proponents of the model argued that it will help improve comprehensive primary care services upstream and reduce inappropriate utilization of Emergency Department (ED) and Inpatient (IP) care and expenditures downstream. Evidence on the model’s application to reduce ED and IP utilization and expenditures have so far been mixed (Friedberg et al., 2014; Jackson & Williams, 2015; Baseman et al., 2016). Based on growing interests in the effects of the model’s application to provide care for different types of patients, this research was designed to evaluate the policy effects of the application of PCPCHs, with a focus on PCPCHs that treat greater proportions of chronic care patients, to answer the following questions: HEALTH RISKS IN MEDICAL HOMES AND THEIR EFFECTS ii (1) What is the average chronic disease burden of PCPCHs, and how does their average chronic disease burden compare to the communities PCPCHs are in pre-post PCPCH recognition? (2) How do primary care expenditures change based on the chronic disease burden of PCPCHs? (3) Do PCPCHs that engage more high chronic disease burden patients have more reductions in ED and IP expenditures? For this research, a chronic disease burden measure was developed from 10 markers of chronic conditions. This measure was then used to stratify PCPCH clinics and their comparators into high and low chronic disease burden clinics. The research was designed as a natural experiment, utilizing difference-in-difference methods to measure outcome differences pre-post PCPCH policy implementation and comparing outcome differences between PCPCHs and their control groups. The unit of analysis was PCPCH clinics. The theoretical perspectives that informed this research were Risk Selection and Complex Adaptive Systems (CAS). Data from Oregon’s All Payer All Claims (APAC) data system, which included 16 quarters of claims and eligibility data from fourth quarter 2010 to third quarter 2014, as well as PCPCH attestation data on 525 clinics were utilized for this research. The results suggest that the chronic disease burden for PCPCHs was significantly lower than their comparator groups before clinics recognition as PCPCHs, but the chronic disease burden did not change after clinics recognition as PCPCHs. Average primary care expenditures did not change after PCPCH HEALTH RISKS IN MEDICAL HOMES AND THEIR EFFECTS iii recognition. Average ED and average IP expenditures for high chronic disease burden PCPCHs did not change but rather decreased significantly for low chronic disease burden PCPCHs. The results imply that the distribution of chronic disease burden in PCPCHs is important and related to ED and IP expenditures, but in a different direction than expected. The results also suggest that focusing on low chronic disease burden patients in PCPCHs could help reduce ED and IP expenditures in the short and medium terms. Policies to engage a broader mix of chronic disease burden patients in PCPCHs could help increase savings from ED and IP utilization. The results also suggest the need for more research to improve current understanding of how PCPCHs are impacting health care trajectories in the current delivery system environment. HEALTH RISKS IN MEDICAL HOMES AND THEIR EFFECTS iv