Accountable care organizations, the patient-centered medical home, and health care reform: What does it all mean?


Medical care in the United States is plagued by extremely high costs, poor quality, and fragmented delivery. In response, new concepts of integrated health care delivery have developed, including patient-centered medical homes and accountable care organizations (ACOs). This article reviews these concepts and includes a detailed discussion of the Centers for Medicare and Medicaid Services’ ACO and Shared Savings Proposed Rule.

Medical homes lower costs, improve quality

Integrated delivery system models such as patient-centered medical homes have demonstrated cost-savings while improving quality of care.8,9 Reducing hospital admissions and visits to the emergency department shows the greatest cost-savings in these models. Several projects have shown significant cost-savings10:

The Group Health Cooperative of Puget Sound reduced total costs by $10 per member per month (from $498 to $488, P = 0.76), with a 16% reduction in hospital admissions (P < .001) and a 29% reduction in emergency department visits (P < .001).

The Geisinger Health System Proven-Health Navigator in Pennsylvania reduced readmissions by 18% (P < .01). They also had a 7% reduction in total costs per member per month relative to a matched control group also in the Geisinger system but not in a medical home, although this difference did not reach statistical significance. Private payer demonstration projects of patient-centered medical homes have also shown cost-savings.

Blue Cross Blue Shield of South Carolina randomized patients to participate in either a patient-centered medical home or their standard system. The patient-centered medical home group had 36% fewer hospital days, 12.4% fewer emergency department visits, and a 6.5% reduction in total medical and pharmacy costs compared with controls.

Finally, the use of chronic care coordinators in a patient-centered medical home has been shown to be cost-effective and can lower the overall cost of care despite the investment to hire them. Johns Hopkins Guided Care program demonstrated a 24% reduction in hospital days, 15% fewer emergency department visits, and a 37% reduction in days in a skilled nursing facility. The annual net Medicare savings was $75,000 per coordinator nurse hired.

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