Oregon PCMH Saved 240 Million But Spent Over 250 Million

The latest headlines spout 250 million saved for Oregon in the movement to Primary Care Medical Home. Claims of savings often fail to consider the additional costs of an intervention or the supplemental government or foundation funding required. Based on $105,000 additional cost per primary care physician per year the following table demonstrates $250 million to 1 billion dollars more in cost for primary care medical home across Oregon. It is important to consider not just the savings, but also the higher costs of new models.

Specifics are not given but the impact of the primary care medical home can be estimated across the number of clinics that could participate and the doctors per clinic over a 2 or 3 year period. The number of doctors may be small compared to actual. The high and low levels are shown along with a possible average cost. If studies involved less than 2 years they should not have gained print.

The limitations in new studies with new measurements as measured and analyzed and reported by personnel in agencies that need to demonstrate improvements are many.

Oregon Also Demonstrates Little Change in Costs in Other Studies

We do know more from Oregon in areas such as Medicaid because of the randomization experiment. We know that Medicaid costs for emergency room care have not gone down. The cost savings predicted have not been demonstrated in this area.

The limitations of of managed care or managed cost are many. 

The Congressional Budget Office indicated that the cost of these programs was about as much as was saved. The lessons are many such as patients and patient factors set consumption

 The limitations of comprehensive efforts are many. 

Robert Wood Johnson spent 300 million over 10 years in the best ways that their sites and leaders could thing of to change clinics and physicians toward quality focus and the result was little or no change across population health and quality measures.
  • Higher cost and no change is the opposite of value. 
  • Improvements in the controls and likely overall, were as great (or as limited) as in sites with interventions
My estimates of the primary care medical home obtained from studies in 2 other states could be off. Oregon could be spending less. Or Oregon could be spending more in time, talent, and treasure to do much more while accomplishing less.

All states should be working in a comprehensive way to improve basic care. The Oregon effort is admirable. But it is still clinical intervention and dollars spent in low yield clinical intervention areas - dollars that might be better spent for housing, nutrition, legal aid, child development, early education, transportation, healthier environments, behavior change, jobs, and other social determinant and people factor changes.

Health care is about changing people - not changing practices. Health care leaders, innovators, and designers need to remember this most of all.

The limitations of the claims regarding interventions are many.

Which intervention resulted in improvements in cost or quality? How can savings in a comprehensive effort be assigned to as smaller portion such as Primary Care Medical Home? Why do headlines exaggerated the various claims?
The limitations of the primary care medical home are many. 

There are impacts in the clinical areas, in the local/Social Determinant areas, and on the clinician/team areas.

Clinical Impact
  • Increased cost of delivery
  • Continued need to train due to turnover of clinicians and team members
  • Diversion of funds from team members to PCMH expenses with the potential to impact higher turnover and greater costs of recruitment and retention
  • What happens when supplemental funds for PCMH run out?
  • Incentives were paid from funding that was taken away and almost everyone recovered the funding that was taken away - minus cost of administration.
 Local/Social Determinant People Factor Impact
  • Social Determinant/Local Impact - Dollars shipped from local to outside for training, certification, software, practice management consultants
  • Losses of local jobs and cash flow 
  • Clinic viability may be impacted by higher cost of delivery
Clinician/Team Impact
  • Rapid change is stressful
  • Can outside advisors comprehend local situations, populations, team issues?
  • Emphasis increased upon quality measures, certification
  • How do we meet the higher volume of patients and the increasing complexity without more team members?
  • What about our raises and improvements in benefits such that my take-home pay increases rather than decreases (especially in sites with lower viability)?
  • Investing in us vs investing in them concerns


Most Visited Early Blogs


Three Dimensions of Non-Primary Care vs Zero Growth in Primary Care  

Finance-me-cratic Constants in the Bureaucratic Universe  

Meeting Primary Care Needs in the Last Half of the 21st Century 

Exploring the Health Consequences of Disease Focus  


Of all the forms of inequality, injustice in health care is the most shocking and inhumane.
Martin Luther King, Jr. 

Robert C. Bowman, M.D.        Robert.Bowman@DignityHealth.org

The blogs represent the opinion of the blogger alone.
Copyright 2016



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