Reducing Long-Term Cost by Transforming Primary Care: Evidence From Geisinger's Medical Home Model

Objectives: To estimate cost savings associated with ProvenHealth Navigator (PHN), which is an advanced model of patient-centered medical homes (PCMHs) developed by Geisinger Health System, and determine whether those savings increase over time.

Study Design: A retrospective claims data analysis of 43 primary care clinics that were converted into PHN sites between 2006 and 2010. The study population included Geisinger Health Plan’s Medicare Advantage plan enrollees who were 65 years or older treated in these clinics (26,303 unique members).

Methods: Two patient-level multivariate regression models (with and without interaction effects between prescription drug coverage and PHN exposure) with member fixed effects were used to estimate the effect of members’ exposure to PHN on per-member per-month total cost, controlling for member risk, seasonality, yearly trend, and a set of baseline clinic characteristics.

Results: In both models, a longer period of PHN exposure was signifi cantly associated with a lower total cost. The total cumulative cost savings over the study period was 7.1% (95% confi dence interval [CI] 2.6-11.6) using the model with the prescription drug coverage interaction effects and 4.3% (95% CI 0.4-8.3) using the model without the interaction effects. Corresponding return on investment was 1.7 (95% CI 0.3-3.0) and 1.0 (95% Cl –0.1 to 2.0), respectively.

Conclusions: Our finding suggests that PCMHs can lead to significant and sustainable cost savings over time.