North Carolina medical home program extended to private, state workers

An established North Carolina Medicaid medical home program will begin coordinating care for hundreds of thousands of state and private employees as soon as this fall.

The new pilot program, called First in Health, is an attempt to extend the cost savings and health improvements achieved by Community Care of North Carolina outside of the state's Medicaid program. Drug manufacturer GlaxoSmithKline, retail pharmacist Kerr Drug and the health plan for North Carolina's state employees will offer Community Care medical homes to workers as an optional enhanced benefit for their existing health coverage.

"It's all carrot. There's no stick in this," said Community Care spokesman Paul J. Mahoney.

CCNC's 14 regional networks provide medical homes for more than 1.1 million Medicaid enrollees, including more than 205,000 elderly, blind and disabled enrollees. Each network serves as a virtual integrated health system, with a medical management committee of local doctors who develop best practices, a medical director and a clinical pharmacist, among others. The networks and participating physicians each receive at least $2.50 per member per month to coordinate care. Both the networks and the physicians receive reports comparing the results of their care to their peers.

CCNC saved the state nearly $1.5 billion in health care costs between 2007 and 2009, according to an analysis by consultant Treo Solutions. That's due in part to reduced hospital admissions and readmissions and improved management of chronic conditions.

GlaxoSmithKline, like many private businesses, has faced 8% to 9% annual health care cost increases for its 10,000 employees, retirees and their dependents, said Jack Bailey, a senior vice president with the drug company.

GlaxoSmithKline also is concerned about unsustainable national health care cost increases. "We need new delivery models like CCNC to work," Bailey said. Unrestrained growth in health care spending could consume the same funding that would pay for the innovations the company is developing. Bailey called Community Care "probably the most advanced medical home program in the country."

Employees will pay no additional costs for care coordination, Bailey said. The company is paying both the $2.50 per member fee and all co-pays. Those upfront costs will be small compared to the $300 million per year the company already spends on health benefits, according to GlaxoSmithKline spokesman Kevin Colgan.

North Carolina has similar motivations for offering medical homes to its 548,000 state employees, retirees and their dependents within the next two years, beginning this fall in seven counties, according to Anne B. Rogers. She's director of integrated health management for the North Carolina State Health Plan for Teachers and State Employees.

The state health plan's wellness and case management coordinator -- ActiveHealth Management -- wanted better state employee participation in these programs, Rogers said. Only about a third of state employees receive active disease management. Fewer still are engaged in case management.

Rogers hopes 75% of state employees -- which include teachers at public schools and colleges -- will sign up for a CCNC medical home. The state is covering the $2.50 per member fees, but it is not waiving patient co-pays.

Kerr Drug plans to offer the medical home benefit to its employees beginning in 2013.

Most of these new medical home participants won't need to find new doctors, because 95% of primary care physicians in North Carolina already participate in CCNC, Mahoney said. New medical home patients should expect to see a lot more follow up if they have an episode of care compared with how it would be handled under their existing health plans. For example, the coordination could include a physical visit by a CCNC care coordinator within 72 hours after a hospital discharge instead of a follow-up telephone call.

CCNC's next big task is including more specialists in its care coordination. "We're trying to have an integrated system of care," said Lanier Cansler, secretary of the North Carolina Dept. of Health and Human Services.