In a patient-centered medical home (PCMH), clinicians work together in a team to provide patients with coordinated, comprehensive, and continuous care. One method of reimbursing medical homes for the care they provide is “bundled payments”—lump sums that cover all primary care services needed by patients in a given year. Previous studies indicate that the combination of PCMHs and bundled payments holds promise for saving money and improving the quality of primary care.
Commonwealth Fund–supported researchers examined claims and eligibility data from 2008 through 2010 for some 10,000 patients in three upstate New York physician practices taking part in a pilot PCMH project using bundled payments. Patients in the practices were covered by a variety of public and private insurers using a range of benefit designs. Compared with a control group of non-PCMH practices reimbursed on a fee-for-service basis, the pilot practices had 6 percent to 8 percent lower health care spending, with the largest differences in emergency department (11%) and laboratory (16.5%) spending.
As shown in the demonstration, it is possible for patient-centered medical homes to achieve reduced health care spending by emphasizing prevention and coordinated care and changing provider incentives through the use of bundled payments.