In the last few years, private health buyers, insurance companies and many medical societies have pushed hard for adoption of the patient-centered medical home, an approach to improving population health that relies on a single primary care physician to coordinate patient care across a team of specialists and other caregivers.

The major holdout on the team, however, was government.

That's no longer the case. Both federal agencies and states have recently thrown their considerable weight"both as buyers and providers of care"behind the medical home, betting that the concept can help reach the Holy Grail of healthcare: better patient outcomes at a lower cost.

Currently, there are 27 multi-stakeholder pilot projects in 18 states evaluating the benefits of patient-centered medical homes. As of early May with the passage of legislation in Mississippi, more than 40 states have signed laws that address some aspect of the medical home, including the use of medical homes for Medicaid patients.

And in early June, Medicare announced that it was accepting applications from states that want to participate in the Multi-payer Advanced Primary Care Practice Demonstration. The project will assess the performance of the medical home"sometimes called "advanced primary care" "when it involves patients covered by Medicare, Medicaid and private insurance companies.

Why this new level of enthusiasm for what has so far been mostly an academic exercise? Observers say the sudden shift is the result of a perfect storm of tougher economic realities, demographics and a band of hearty legislators.

"This is a fast moving train that everyone is jumping on right now," says Matthew Quinn, a special expert in health IT for the federal Agency for Health Research and Quality, which is conducting numerous research studies on the efficacy of medical homes. "And one reason is that the medical home is a concept that glues together a combination of things going on right now in the healthcare environment."

Meaningful use

The big levers moving medical home development are, not surprisingly, the recent passage of two major pieces of federal healthcare legislation: the national healthcare reform law and last year's Health Information Technology for Economic and Clinical Health (Hi- Tech) Act. The latter provides incentives for physicians to migrate to electronic health records and other health IT tools.

Dr. Paul Grundy, president of the Patient-Centered Primary Care Collaborative (PCPCC), a non-profit coalition of major employers, consumer groups and patient quality organizations, says the medical home model enables physicians to achieve meaningful use of health IT required for provider incentive payments under the Hi-Tech Act.

These include improved quality, improved safety, care coordination, improved access and decreased costs. "A patient-centered medical home equals meaningful use and meaningful use equals the medical home," Grundy says.

Meanwhile, national healthcare reform legislation gave the Health and Human Services Department funding to conduct comprehensive medical home pilots. More importantly, it gave HHS secretary Kathleen Sebelius the ability to pursue a key "change in covenant" between Medicaid and Medicare and providers of care, says Grundy.

The regulation gave the secretary the right to abandon the fee-for-service payment structure normally used by Medicare and Medicaid in favor of a per-patient and bonus incentive payments used in proven medical homes.

"Without going back for congressional approval, the secretary now has an ability to look at these pilots and say, "˜this is a better mousetrap,' and we're going to pay against this versus the way we normally pay," say Grundy. "That's huge power."

Government's stake

Government's interest in the medical home is wide-ranging. The potential to reduce costs while also improving quality is the most obvious one, says Rep. Peggy Lehner, a member of the Ohio House of Representatives who co-sponsored a bill"recently signed into law" establishing training centers for setting up medical homes in the state.

"Medicaid is such a huge portion of every state's budget that it's critical that we include Medicaid payers in the mix," Lehner says. "There's evidence that you can keep people healthier and out of ERs and hospitals regardless of who is paying the bill, but when it is the government that's paying that bill they then begin to sit up and take notice."

Medical homes also hold potential for increasing the number of primary care physicians, say its adherents. A medical home can increase the salaries of these physicians by paying bonuses for improved outcomes, giving them the potential to make substantially more money than a traditional family physician.

"The bottom line is that for the president's healthcare reform measures to work, we absolutely have to have more primary care physicians," Lehner says.

Not risk-free

But heavy government investment in the medical home is not risk-free. There remain "a lot of gaps in evidence," says AHRQ's Quinn. "There's a need for not only solid research in this area, but research that is going to help inform policymakers and, more broadly, those making decisions around the medical home."

Lehner also notes that the medical home is more than the sum of its parts. A threat to its success is the possibility that physician practices will try to cherry-pick aspects that they like. "If the government puts a lot of money into these programs without setting certain requirements and demanding certain outcomes, it could be a real boondoggle," he says.

Nevertheless, many health policymakers mostly see the model's upside, including better patient care, more satisfied medical professionals and more patient participation in their own health management. "There's no risk to the patient," says Dr. Lisa Dulsky Watkins, director of the Vermont Blueprint for Health, a state healthcare reform effort that includes a medical home plan.

"The issue is are we spending more money than we would have otherwise? That would be a hard case to make given the extraordinary waste in our current system."