The Impact of Alternative Payment in Chronically Ill and Older Patients in the Patient-centered Medical Home

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Patient-centered medical home (PCMH) has gained prominence as a promising model to encourage improved primary care delivery. There is a paucity of studies that evaluate the impact of payment models in the PCMH.


We sought to examine whether coupling coordinated, team-based care transformation plan with a novel reimbursement model affects outcomes related to expenditures and utilization.

Research Design:

Interrupted time-series model with a difference-in-differences approach to assess differences between intervention and control groups, across time periods attributable to PCMH transformation and/or payment change.


Although results were modest and mixed overall, PCMH with payment reform is associated with a reduction of $1.04 (P=0.0347) per member per month (PMPM) in pharmacy expenditures. Patients with hypertension, hyperlipidemia, diabetes, and coronary atherosclerosis enrolled in PCMH without payment reform experienced reductions in emergency department visits of 2.16 (P<0.0001), 2.42 (P<0.0001), 3.98 (P<0.0001), and 3.61 (P<0.0001) per 1000 per month. Modest increases in inpatient admission were seen among these patients in PCMH either with or without payment reform. Patients 65 and older enrolled in PMCH without payment reform experienced reductions in pharmacy expenditures $2.35 (P=0.0077) PMPM with a parallel reduction in pharmacy standardized cost of $2.81 (P=0.0174) PMPM indicative of a reduction in the intensity of drug utilization.


We conclude that PCMH implementation coupled with an innovative payment arrangement generated mixed results with modest improvements with respect to pharmacy expenditures, but no overall financial improvement. However, we did see improvement within specific groups, especially older patients and those with chronic conditions.

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