IBM outlines new model for Healthcare

Patient Centered Medical Home Can Change the Way Care is Delivered

ARMONK, N.Y., May 28, 2009 -- IBM (NYSE: IBM) today announced the findings of a major healthcare study that underscores the critical need for a new model of care called the Patient Centered Medical Home (PCMH). The new study, "Patient Centered Medical Home: What, Why and How?," ( identifies the PCMH as a viable foundation for the reform of today's unsustainable healthcare system because it is committed to primary-care based, coordinated, proactive, preventive, acute, chronic, long-term and end-of-life care.

Rising health care costs continue to be a burden on families, businesses and the entire economy and are projected to increase even further. According to the Centers for Medicare and Medicaid Services, national healthcare expenditures -- already the highest in the world -- are expected to grow an average of 6.2 percent per year from 2008 to 2018 and outpace GDP growth. Moreover, it will consume 20.3 percent of GDP by 2018.(1)

Transforming healthcare has never been more important, given the current state of the worldwide economy and the downward pressure exerted on the U.S. healthcare system. Medical home practices nationwide increasingly help address fundamental problems with the healthcare system. They can improve healthcare accessibility, consistency and quality of care for consumers as well as contain rising costs and curb abuse in the system.

According to the IBM study, the broken and disconnected U.S. healthcare system is geared towards treating and rewarding acute, episodic interventions. As a result, the care is reactive rather than preventive -- it supports minimal communication between providers and places little focus on patient education and self-management. Healthcare services have been slow to adopt information-based healthcare delivery, in part due to the lack of tools -- including electronic health records -- that are necessary to provide up-to-date, accessible patient information.

"In order for health information technology to be effective, it must support the needs of patients and the needs of primary care physicians," said Dr. Douglas Henley, Executive Vice President and CEO of the American Academy of Family Physicians. "A smarter health system is one based in comprehensive patient centered primary care which improves patient/physician communication, the coordination and integration of care, and the quality and cost efficiency of care."

While most Americans would prefer to have a personal relationship with a primary care provider (PCP), consumers have expressed growing dissatisfaction with the system in its current state. Patients have reported communications problems with their PCPs including difficulties in scheduling appointments, leading to a lack of quality care. Many PCPs are also dissatisfied because they are confronted with unrealistic demands, insufficient reimbursement, and misaligned incentives. The medical home model improves upon the PCP system and can help raise the quality of care while reducing costs.

TransforMED, a subsidiary of the American Academy of Family Physicians, has produced a video on role of the medical home, which can be accessed here:

Benefits of the Medical Home

The medical home -- an enhanced care model -- provides comprehensive and timely care and payment reform, emphasizing the central role of primary care. At the core of the medical home is preservation of the patient's personal, long-term relationship with a primary care physician. Patients who have a personal physician will incur less healthcare expenditures and lower mortality rates. According to a 2008-2009 Watson Wyatt study, individuals with a physician are more apt to take preventive health care measures and participate in a wellness program. Specifically, respondents who say they have a personal physician are nearly 2.5 times more likely to have had a preventive healthcare screening than those without a physician (76 percent vs. 31 percent). Also, workers with a physician are more likely to have taken a health risk assessment (27 percent vs. 21 percent), have had a biometric screening (20 percent vs. 8 percent) and to have used a weight management program (20 percent vs. 12 percent) than those without a PCP.(2)

Another key component of the medical home is the team approach to care. Under this model, the patient is at the center of the healthcare experience, supported by a team of care givers who are practicing at the "top of their licenses." The physician, nurse, nurse practitioner, patient educator, pharmacist and other care givers all have a role to play in a team-based approach to care with a sense of responsibility for the patient. A PCP-led care team becomes the patient's confidant, coordinator, and advisor for all aspects of healthcare, including prevention and wellness.

Where evidence-based guidelines are available and implemented, often with the support of information technology tools, physicians would be able to deliver more personalized and safer care. Patients benefit from more flexible scheduling and from improved communication channels, such as e-mail, phone, or even computer portals where patients can manage their personal health records, monitor their own issues, and even make appointments.

Medical Homes Do Work

Despite the challenges to transforming the U.S. healthcare system, the medical home's model can be implemented now. Already pilots in several states have demonstrated success in key areas such as improved quality, greater patient compliance and more effective use of healthcare services, such as reductions in unnecessary hospitalizations and use of emergency rooms for primary care.

For example, the Community Care of North Carolina (CCNC) was formed to reduce healthcare costs and increase access and quality of the state's under- and uninsured population which includes coverage for more than 870,000 Medicaid enrollees and 95,000 children. The results of the medical home initiative are positive. A recent study reported that the CCNC produced cost savings of at least $160 million per year.(3) Furthermore, an asthma program reduced hospital admission rates by 40 percent and a diabetes program improved quality of care by 15 percent.(4)

Why We Should Care

The study indicates that all stakeholders -- individual/patient, primary care provider, specialist, nurse, hospital, health plan, employer, pharmaceutical organization, government, society and others -- can benefit from participating in the medical home.

Employers, for example, are able to purchase healthcare base on value and can potentially see cost savings associated with more efficient healthcare. Evidence shows that primary care has the potential to contain costs, improve quality of care and increase employee satisfaction with the medical coverage. Primary care is the site of the most treatments for chronic conditions and has the potential to produce better patient outcomes and reduce the absenteeism and low productivity associated with chronic diseases.(5)

The chart below compares the current healthcare system with the use of medical home care.

"It's a new world - and healthcare organizations are key players in an economy that demands increased value, better outcomes, sustainability and accountability," said Paul Grundy, IBM Global Director of Healthcare Transformation. "A smarter healthcare system can improve the level of care by enhancing doctor-patient communication which is the basis of any healthcare system. It also can place appropriate emphasis on wellness and prevention. It changes everything from how healthcare organizations do business to how they enable providers and patients to better collaborate and innovate."

    Today's Care                        Medical Home Care

    My patients are those who make      Our patients are those who are
    appointments to see me              registered in our medical home

    Care is determined by today's       Care is determined by a proactive
    problem and time available today    plan to meet health needs, with or
                                        without visits

    Care varies by scheduled time and   Care is standardized according to
    memory or skill of the doctor       evidence-based guidelines

    I know I deliver high quality care  We measure our quality and make
    because I'm well trained            rapid changes to improve it

    Patients are responsible for        A prepared team of professionals
    coordinating their own care         coordinates all patients' care

    It's up to the patient to tell us   We track tests and consultations,
    what happened to them               and follow-up after ED and hospital

    Clinic operations center on         An interdisciplinary team works at
    meeting the doctor's needs          the top of our licenses to serve

    Source: Adapted with permission from F. Daniel Duffy, MD, MACP, Senior
    Associate Dean for Academics, University of Oklahoma School of Community

Technology infrastructure

There is a greater need to continue to build out the IT infrastructure to ensure that medical homes are operational in the U.S. The study emphasizes that medical homes should leverage fully functioning, secure interoperable electronic health records with powerful decision support capabilities connected to their own practice management system and other information sources, such as health information exchanges or other providers' systems. Many physicians who participate in medical homes have electronic medial record systems, but they are out of date with limited functionality and interoperability. In addition, information exchanges are still in the early stages in most parts of the country.

In addition, practices may need other IT-related capabilities such as disease registries, e-prescribing, quality reporting, patient portals to facilitate e-visits, online appoint scheduling and other capabilities, or portals to facilitate physician-to-physician communication for care coordination. The study emphasizes that it is important to have a standards-based technology infrastructure to support larger implementations.

The study concludes that, while the medical home is not a "silver bullet," it can provide a workable foundation piece for overall healthcare transformation. However, to succeed on a large scale, PCMH will require significant changes among other key stakeholder, including consumers, clinicians, and health plans, as well as an integrated digital, openly accessible infrastructure to support coordinated care.

IBM Survey Methodology

To continue tracking both end-user consumer behavior and leading industry expert opinions about the medical home, the IBM Institute for Business Value conducted extensive primary and secondary research. This primary research included over 50 interviews of leading business and thought leaders representing consumer groups, clinicians, hospitals, health plans, employers, pharmaceutical organizations, government, medical home initiatives, and other groups from January through May 2009.

About IBM

For more information visit

(1) Sisko, Andrea, Christopher Truffer, Sheila Smith, Sean Keehan, Jonathan Cylus, et al. "Health spending projections through 2018: Recession effects add uncertainty to the outlook." Health Affairs. March/April 2009.

(2) "Closing the Gap," Employees Perspectives on Healthcare, Watson Wyatt Worldwide, 2008/2009

(3) Steiner Beat D., Amy C. Denham, Evan Ashkin, et al. ,"Community Care of North Carolina: improving care through community health networks." Annals of Family Medicine. March 2008

(4) Community Care of North Carolina. "Program Impact,"

(5) R.Z. Goetzel et al. , "Health and Productivity Management: Establishing Key Performance Measures, Benchmarks, and Best Practices," Journal of Occupational and Environmental Medicine 43 no.1 (2001) 10-17.

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