Coordinated Care Models in Digital Health

Coordinated care models emphasize the basic relationships between patients and doctors, focusing on the continuum of care. The models reward doctors for the outcome of care instead of pure volume.

The two dominant models are the patient-centered medical home (PCMH) and the accountable care organization (ACO).

The patient-centered medical home model has enjoyed broad market interest since 2007. The Patient-Centered Primary Care Collaborative (PCPCC), founded by major primary care service provider associations in the U.S., is the industry group behind the PCMH initiative. It has aggressively promoted the model through pilot programs, and the results have sparked industry-wide attention.

Broadly speaking, the PCMH model is characterized by physician-directed medical practice, with a whole-person orientation in which care is coordinated and integrated across the healthcare system.

Accountable care organizations also pursue a coordinated care model. In a broader sense, this catchall term describes new approaches in which care is coordinated among different providers along the continuum of care. In a narrower definition, it refers specifically to Medicare’s ACO program in which care providers must be recognized as one of three Medicare ACOs — Pioneer ACO, Advanced Payment ACO or Shared Savings ACO.

PCMH is a private sector initiative; CMS (i.e., the Center for Medicare and Medicaid Services) jumpstarted the ACO market. After passage of the Affordable Care Act in 2010, CMS’s Medicare program began working with healthcare providers nationwide to set up ACOs.

The U.S. Supreme Court’s favorable ruling on ACA in June 2012 and President Obama’s successful reelection later that year have removed the legal and political obstacles to ACOs, prompting an industry rush to form ACO practices.

Qualities of PCMHs and ACOs

PCMH and Medicare ACO share many common attributes, especially on their payment model structures. Both models will also benefit from care providers’ investment in EMR technology and general IT innovations such as cloud services, mobile computing, and data analytics.

The PCPCC actually calls PCMH “foundational to ACOs,” a description with which Parks Associates agrees.

Growth Drivers of Coordinated Care Models

According to PCPCC’s tally, there were more than 70 PCMH pilot programs up and running at the end of 2012.

A search in NCQA’s directory for accredited PCMH practices turns up more than 6,500 qualified physician practices or clinicians nationwide. Given that the first set of NCQA’s PCMH standards was launched in 2008, the speed of acceptance of PCMH by physicians is impressive.

Factors contributing to its fast adoption:

    • The passage of ACA and Medicare’s ACO initiatives have had a “halo” effect on PCMH awareness and perception. As the entire healthcare industry is building various flavors of coordinated care models, more physicians and their practices understand the PCMH concept and embrace its principles.


  • PCPCC and NCQA simplified recognition standards in 2011. As a result, care professionals face lower compliance burdens and view PCMH recognition more favorably.



  • Some physician practices view PCMH as a viable model to allow their businesses to thrive long term. Although there are many doubters of PCMH, some practices view PCMH as the future of care, especially if they face a tough reimbursement situation (for example, due to Medicare/Medicaid spending cuts and the growing bargaining power of private insurers), experience increased workload (people are sicker, and per-physician case load is on the rise), or both. These physicians are more willing to adopt the PCMH model by changing their practice and accepting new payment models.



  • Private payers have accelerated their experiments with various primary care models, including PCMH. Since 2010, large private health plans have taken the lead in adopting PCMH. Interest among insurers has also persuaded care practices to examine and adopt PCMH models.


On the ACO front, the momentum is building as well. Key drivers of Medicare ACOs:

    • The Center for Medicare and Medicaid Services (CMS) laid the groundwork for ACOs during the last decade. CMS has experimented with alternative payment models for almost a decade. Past pilot programs and demonstration projects on bundled payment, physician pay-for-performance, and value-based purchasing models all incorporated some elements of the ACO model. Lessons and experience gained from these projects have helped CMS launch ACO initiatives swiftly.


  • ACA provides a legal basis for ACO implementation and financial support. The law authorizes Congress to fund the Health Innovation Center within CMS’s jurisdiction and allocates resources to incentivize the private sector to commercialize solutions and/or launch new business models. Ample early funding ensured the initial success of Medicare ACO initiative.



  • Care providers recognize the need to work with government to find a solution or risk further reimbursement reduction if choosing the status quo. Most care providers increasingly find Medicare/Medicaid fee-for-service payment less attractive. Potential Medicare payment cuts have also prompted many physician groups to jump at the opportunity to become Medicare ACOs as a risk-hedging bet.


Outlook for Coordinated Care Model Adoption

The number of patients enrolled in either a PCMH or an ACO-recognized physician practice will experience a dramatic increase from 2012 to 2017.

Over 3 million patients received care under a PCMH or ACO model in 2012, and this figure will exceed 130 million patients by 2017, according to Parks Associates’ projections.

PCMHs and ACOs will receive care management fees to care for patients outside of traditional service settings and for their care coordination efforts, and these fees will become new revenue sources for care providers.

Parks Associates estimates that revenues from care management fees for these providers will jump from US$156 million in 2012 to more than $8.8 billion in 2017. Use of telehealth technology to manage patients with chronic conditions will also be much more common in a coordinated care model than it is today.

Harry Wang is director of health and mobile product research at Parks Associates.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories

E-Commerce Times Channels