Study Examines Trends in Healthcare Use and Costs after VA's Implementation of Patient-Aligned Care Teams

BACKGROUND:
VA invested nearly $2 billion during fiscal years 2010-2012 in its effort to transform how it delivers healthcare. The centerpiece of this effort is the Patient-Aligned Care Team (PACT) initiative, with the goal of transforming primary care in a manner consistent with the patient-centered medical home (PCMH) model. Started in 2010, PACT involved all VA outpatient primary care clinics, which collectively treat more than five million Veterans annually who receive VA primary care. Before the implementation of PACT, primary care providers worked in large groups that shared nurses and other staff members. Under PACT, each primary care provider became the leader of a team that also includes a registered nurse care manager, a medical assistant, and an administrative clerk. Additional support staff were hired to meet these goals, including 1,271 registered nurse care managers. This study analyzed data for 11 million VA primary care patients treated from FY03 through FY12 to assess how trends in healthcare use and costs changed after the PACT implementation. Using VA administrative data, investigators estimated return on investment by modeling trends for eight categories of VA healthcare, including outpatient encounters, hospitalizations, emergency department (ED) and urgent care visits.

FINDINGS:

• The implementation of the PACT model of care in the VA healthcare system was associated with modest increases in primary care visits – and with modest decreases in both hospitalizations for conditions like heart failure that might be avoided with better ambulatory care, and outpatient visits with mental health specialists.
• It is estimated that these changes avoided $596 million in costs compared to the investment in PACT of $774 million, for a potential net loss of $178 million during the study period. The investment in PACT was overwhelmingly attributed to hiring personnel to staff primary care teams.

LIMITATIONS:

• Previous studies observed reductions in ED and urgent care visits after implementation of the PCMH model of care. Although no reduction in VA ED use was observed, only 111 of 908 sites provide ED care, and the study was not able to measure visits at non-VA EDs.
• The study did not include the effects of PACT on services covered by Medicare for eligible VA beneficiaries, or the effects on services for which VA has limited resources (e.g., mammography, dialysis, and colonoscopy) and, therefore, contracts with external providers.

IMPLICATIONS:

• Although PACT has not generated a positive financial return, it is still maturing and trends in costs and use are favorable. Thus, adopting patient-centered care does not appear to have been a major financial risk for VA.

AUTHOR/FUNDING INFORMATION:
Drs. Hebert, Liu, and Wong are part of HSR&D's Center for Innovation for Veteran-Centered and Value-Driven Care, Seattle, WA. Dr. Wong is supported by an HSR&D Career Development Award.

Hebert P, Liu C-F, Wong E, et al. Patient-Centered Medical Home Initiative Produced Modest Economic Results for the Veterans Health Administration, 2010-2012. Health Affairs. June 1, 2014;33(6):980-87.