Federal and state governments play a significant role in strengthening the delivery of primary care; current efforts, however, have disproportionally been focused on large or multispecialty practices. This report examines the roles states are playing to reorganize the delivery of primary and chronic care to produce more efficient and effective care for patients and providers, particularly in small practices. Through short case studies developed via interviews with state officials and physicians in Colorado, Michigan, North Carolina, Oklahoma, Pennsylvania, and Vermont, the authors highlight several state-based initiatives that seek to create high-performing health systems by targeting local and regional strengths. Additionally, the authors identify five themes critical to enacting strategic delivery system reforms: leadership and the convening of stakeholders, payment incentives, support for infrastructure, information feedback and monitoring, and certification and recognition.



Although most of the debate preceding the passage of the Affordable Care Act in March 2010 was focused on improving access to care, it is widely agreed that without equal attention to reforms that address cost and quality, the United States is destined to continue its path of uncontrolled, spiraling costs and poor overall performance. The issues are complex, and there is no silver bullet or panacea to solve the problems. This paper examines the roles states are playing to reorganize the delivery of primary and chronic care to produce more efficient and effective care for patients and providers, with an emphasis on small practices. The paper includes short case studies highlighting the diversity of work in Colorado, Michigan, North Carolina, Oklahoma, Pennsylvania, and Vermont, as evidence of effective policies and strategies being used to transform and link practices to improve primary and chronic care.

Federal and state governments have important roles to play in facilitating or establishing the primary care foundation, which is the backbone of an organized delivery system. There have been a number of recent initiatives to strengthen the delivery of primary care, but activity has disproportionately been focused on larger, multispecialty practices. Spreading change to smaller practices remains a challenge.

The state policy levers and actions highlighted in this study emphasize the following five strategic themes that will be crucial in affecting change. These are:

  • Leadership and convening: bringing public and private payers and stakeholders together and brokering multipayer agreements;
  • Payment incentives: using a variety of strategies to pay primary care providers for key elements infrequently reimbursed by other payers and to reward outcomes;
  • Support for infrastructure: shared services to create a team-based approach, state-supported and organized learning, and information exchange;
  • Information feedback and monitoring: data collection and reporting on process and outcomes; and
  • Certification and recognition: meeting characteristics deemed necessary for optimal primary care using the certification of external organizations (such as the National Committee for Quality Assurance) or through state-conducted audits to ensure compliance.

Leaders in the case study states recognized that primary care practice behavior would not change unless payment changed. Findings also indicated that states pursued changes to emphasize more coordinated care across a range of chronic conditions rather than single conditions. The state-based initiatives highlighted in this report are evidence that states are working to create high-performing health systems using approaches and policy strategies that play to local and regional strengths and differences. The states vary greatly in their economic, social, and geographic environments. Highlights of the key features used by states include:

  • Pennsylvania and Vermont had high-profile support of the governor (and in Vermont, the legislature) in directing efforts toward chronic care management and controlling costs.
  • In Michigan and Oklahoma, state agencies asserted their influence to convene public and private entities in jointly planning for statewide primary care practice transformation.
  • States utilize a variety of payment incentives to reimburse primary care providers for key elements infrequently reimbursed by other payers. One region in Pennsylvania uses a shared-savings model to pay providers for desired outcomes, while Michigan leverages managed care contracts to support elements of medical homes. Oklahoma learned that its former partial capitation payment did not directly support medical home principles and changed to a strategy using fee-for-service plus per-member per-month care coordination payments based on certification tiers, patient characteristics, and transition payments to help support practices during the first year.
  • States provide support to practices to build the infrastructure for patient-centered care within the primary care setting and across the care continuum. Colorado funds community-based medical home navigators to help practices connect patients to community resources. Regional networks in North Carolina directly hire care coordinators to work within practices.
  • States can help practices by setting targets for excellence and quality through process and outcomes measurement and reporting. All of the study states produce reports on a number of measures to enhance clinical processes and population management.
  • States regulate or certify practices to ensure they meet the components for optimal primary care. In Oklahoma, providers self select an appropriate medical home level based on three predefined tiers. Pennsylvania ties payment to National Committee for Quality Assurance accreditation and other state-based criteria.
  • States are supporting small practices by providing financial incentives and education. In North Carolina, each network organizes a quarterly meeting; care managers disseminate information from these meetings if providers are unable to attend.

Moving forward, both federal and state policies will play a significant role in strengthening the delivery of primary care. Several provisions in the Affordable Care Act create noteworthy opportunities for primary care in the development of workforce, payment, and practice innovation. Many states will have expanded opportunities to continue experimenting with alternative payment and delivery structures to strengthen primary care and develop the needed infrastructure and workforce. These efforts may benefit from the growing knowledge base developed by the innovative demonstrations and broad-based initiatives under way in the leading states. Finally, the promise of
Medicare’s participation looms as a potential significant accelerator in the next few years. For example, Medicare’s participation in multipayer medical home payment schemes would greatly enhance states’ ability to spread innovations, and its participation would also encourage private carriers to participate.

States can have a significant impact on strengthening primary and chronic care delivery through numerous actions to transform and link small practices. This report illustrates that states can lead the way in delivery system reform and share lessons among each other and with the rest of the nation.


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