Section 3: Promote Efficient and Effective New Models of Care

(Right Care, Right Person, Right Time, Right Place) 

No one worries about the spiraling cost of U.S. health care more than physicians. Our current health care delivery system does too little to coordinate care for patients with expensive-to-manage chronic conditions. We don’t make the most effective use of allied health practitioners. We are requiring physicians to invest in high-dollar health information technology (HIT) systems without ensuring that the investment translates into better patient care. We are responding to calls to measure a physician’s effectiveness and efficiency but are concerned that the measures are not focusing on the right metrics. The way to save money in health care is not through ill-advised, random rationing of care, but rather through systems that ensure the right professional provides the right care, at the right place, and at the right time.

Promote the patient-centered medical home for every Texan
Consider that the costliest 1 percent of patients in the United States account for more than 20 percent of what the nation spends on health care. They are older patients with cancer, diabetes, heart disease, and other serious chronic conditions. Many have multiple health problems, and their relatives might not be helping with their care. Most have private insurance and are white and female. [25]  


HV2020 Key 

As public and private payers look for ways to lower costs, improve patient outcomes, and ease burdens to access, they are turning to models of care that both increase economic efficiencies and enhance patient care. One of these is the patient-centered medical home (PCMH) model. A PCMH is a primary care physician or physician-led team who ensures that patient care is accessible, coordinated, comprehensive, patient-centered, and culturally relevant. The physician or team directly provide, coordinate, or arrange health care or social support services as indicated by the patient’s individual medical needs and the best available medical evidence. The model uses a team-based approach with the patient’s primary care physician leading the overall coordination of care. Trained teams and well-constructed electronic health records (EHRs) are key to a successful PCMH.

TMA supports the use of the PCMH model in Medicare, Texas Medicaid, and commercial insurance plans. Public and private payers have, increasingly, been looking to this model as a way to reduce fragmented care, lower costs, avoid repetitive and costly procedures, and improve patient outcomes. Given the budget constraints that Texas faces and a growing population with unique health care needs, the PCMH offers the potential for Medicaid cost savings as well as improved patient outcomes and physician and provider satisfaction.

In recent years, numerous states have implemented PCMH initiatives that engage both private and public payers. While each program design was unique and each measured success differently, these initiatives showed improved outcomes and reduced costs. Below are just a few examples of PCMH successes. [26] 

  • In a recent Blue Cross and Blue Shield pilot in Colorado, New Hampshire, and New York, the program showed an 18-percent decrease in acute inpatient admission rates compared with an 18-percent increase in the non-medical home group. Additionally, there was a 15-percent decrease in the rate of emergency department visits, compared with a 4-percent increase in the non-PCMH group. [27] 
  • Oklahoma saw complaints about access to same-day or next-day care decrease from 1,670 in 2007 (the year before PCMH implementation) to 13 in 2009 (the year after implementation). Oklahoma saw a decline in expenses of $29 per patient per year from 2008 to 2010.
  • Inpatient hospital admissions for aged, blind, and disabled Medicaid beneficiaries participating in Community Care of North Carolina decreased 2 percent between 2007 and the middle of fiscal year 2010. Inpatient hospital admissions for the unenrolled beneficiaries increased 31 percent over the same time period. Overall, Community Care of North Carolina saved nearly $1.5 billion in costs between 2007 and 2009.

Promote physician-led team care
Texas has a fast-growing population and needs to work toward a 21st century health care workforce. More than ever, caring for larger panels of patients — particularly in primary care medical homes — will involve the skills of many different practitioners. Central to this concept is that these physician-led teams will utilize a number of health care professionals, each bringing important skill sets and training to patient care. Physicians will continue to provide patient care services, but they also will be called upon to manage the team’s care for larger populations, out of necessity and for essential coordination.

Team care will require cooperation and collaboration among all professionals, with a focus on quality, measureable outcomes, and efficient utilization of resources. It will be essential that the patient receive the right care, at the right time, by the right professional, in the right venue.

The physician is the highest-trained team member. It therefore falls to the physician — as both provider of care and manager of services delivered by others on the team — to supervise, implement science-driven and objective treatment protocols, coordinate the services of other professionals as well as medical specialists, and ultimately remain accountable for each patient’s care.

Integrating the talents of a diverse medical team under physician leadership will be one of the key challenges in the coming decade. Without physician direction, supervision, and management (or if the system evolves to accommodate teams led by practitioners with lesser training), medical care will trend toward even more fractured care, higher-than-necessary utilization, and creeping inefficiencies. This will lead to even higher costs, duplications of services, and lower-quality patient care. These inefficiencies in turn will hamper efforts to improve access to care. 

Support physician-led efforts to document quality and efficiency
The physician-led teams will be the linchpin of our future health care delivery system. Directly and indirectly, physicians will impact both health care quality and costs. Measuring their performance to identify weaknesses that warrant change creates tremendous opportunity to improve health care quality and efficiency. [28] 

Physician performance measurement and improvement may prove a lost opportunity for strengthening the health care system if we do not appropriately address methodological and other shortcomings of existing efforts. Too many government programs and commercial insurance companies, for example, rely on data from claims submitted for payment rather than on a close examination of the care delivered to the patient. All quality improvement programs should adopt a national set of standard, meaningful, evidence-based measures that improve both patient outcomes and patient satisfaction.

The primary goal of any quality program must be to promote safe and effective care across the health care delivery system. Getting the right care to the patient at the right time will reduce overall costs in the long run.  

Fair and ethical quality programs are patient-centered and link evidence-based performance and improvement measures to financial incentives. 

Provide significant investment in health information technology
As in nearly every other sphere of modern life, technology has delivered enormous improvements in medicine. Once-unimaginable diagnostic tools and treatments are now commonplace. HIT has tremendous potential to advance the quality of care, prevent medical errors, and streamline health care delivery systems. Recognizing this potential, the government and employers are pushing physicians and providers to adopt HIT quickly so they can better measure the value they receive for their health care dollar. Physicians themselves, of course, are motivated to provide the best possible care, which in modern times involves the use of various technologies, including HIT.

TMA supports the development of a strong HIT infrastructure in Texas that furthers the quality and cost-effectiveness of patient care and simultaneously protects the privacy and security of patient information. In embracing new applications of technology for patient care and patient-physician communication, appropriate standards need to be developed and maintained to ensure this occurs. For example, a lower standard of care is not justified merely because the patient lives in a remote area and may receive some treatment via telemedicine. 

Electronic Health Records
The American Recovery and Reinvestment Act of 2009 allocated more than $90 million in grants to Texas to improve HIT across the state. The Health Information Technology for Economic and Clinical Health Act authorized incentives of up to $63,750 for physicians participating in Medicare and Medicaid who adopt and meaningfully use EHRs. These incentives are particularly helpful as the technology is very expensive, and physicians — especially in solo and small group practices — frequently cite cost as a major barrier to EHR adoption. [29] The federal government also established four Texas regional extension centers to help primary care physicians select, implement, and achieve meaningful use of EHRs.

About half of office-based physicians use an EHR in their practice. With the recent Medicare and Medicaid incentives, this number is expected to grow to 75 percent by 2018. [30] As HIT use continues to expand, it is vital for Texas to protect patients and their physicians in this evolving environment.

Many times, government agencies and payers put demands on physicians that disrupt workflow. These demands come on top of the already extensive disruptions and intrusions physicians experience.

As physicians decide or are required to move from a paper to an electronic health record, Texas must carefully consider the impact of any new regulatory burdens placed on the physician practice, especially when many of these burdens do nothing to improve care quality.  

For instance, to achieve the goals of “meaningful use,” the federal government requires that physicians have a system that tracks patients’ height, weight, and blood pressure as part of “structured data.” This is required even if the physician practices a specialty where height and weight play little or no role in the medical care they provide to patients. Do patients really want to be weighed at the ophthalmologist when updating their eyeglass prescription? According to the federal government, if a physician “believes that one or two of these vital signs are relevant to their scope of practice, then they must record all three vital signs in order to meet the measure of this objective and successfully demonstrate meaningful use.” Texas should not repeat the mistakes of the federal government.

Texas must recognize that not every medical practice will benefit from an EHR. In fact, it could be disruptive to some and could hurt patient care. Requiring a physician to rely on a system that is counterintuitive to his or her clinical training could result in adverse outcomes for the patient. Even expert users  find that EHRs require more  physician time than  paper records and can interrupt the patient-physician interaction in the exam  room. A sizeable portion of patients are concerned about the security  of their electronic medical records. A July 2012 survey  found “roughly half of Americans still say that they are concerned that their digitized health data could  be lost, damaged, or corrupted.”[31] 

In some cases, EHRs are cost-prohibitive regardless of federal incentives. Not all physicians are eligible for the Medicare or Medicaid EHR incentives. The average EHR purchase cost is about $40,000 per physician,[32]  not including productivity dips that hurt practice revenues. Some medical practices operate on such thin profit margins that the capital investment of an EHR could lead to bankruptcy.  

Health Information Exchange
Health information exchanges (HIE) are designed to help physicians and providers share patient information securely. To promote the electronic exchange of medical information, patients and physicians must be assured that patient data are adequately protected by those who operate the HIE.

Stop potentially preventable hospitalizations
From 2005 to 2009, the Texas Department of State Health Services (DSHS) estimates that Texas spent $32 billion on hospital charges for potentially preventable conditions. For example, a recent University of North Texas study of chronic obstructive pulmonary disease (COPD), which is considered a potentially preventable condition, found that from 2005 to 2008, COPD cost Texas $2.7 billion.

Potentially preventable hospital readmissions cost Texas Medicaid an estimated $105.9 million in fiscal year 2010. This does not include physician services or other care that is related to the readmission. A January 2012 Health and Human Services Commission report found there were about 15,000 hospital readmissions within the Medicaid program in 2010. Of these, 23 percent were for treatment of the same condition as the initial admission, almost 30 percent were for an acute condition that may have had some relationship to the initial admission, and 23 percent were for mental health or substance abuse readmissions based on conditions related to the initial admission. Correspondingly, it appears that just 2 percent were from post-surgical complications. [33]     

Top Five Potentially Preventable Hospitalizations for Adult Residents of Texas (2005-2009)   


Number of Hospitalizations  

Average Hospital Charge  

 Total Hospital Charges  

Congestive Heart Failure




Bacterial Pneumonia




Long-Term Diabetes Complications




Chronic Obstructive Pulmonary Disease




Urinary Tract Infection




Texas Health and Human Services Commission, January 2012 

While these are all potentially preventable readmissions, not all are actually preventable. Many of these costs and associated morbidity are avoidable if patients have access to appropriate outpatient health care and proven preventive services such as vaccinations and obesity reduction. The savings from better management, including both patient compliance and use of evidence-based practices, will yield significant savings to the state and improve patient outcomes.

The main issue in the readmissions lies not in procedural errors but rather in fully resolving the initial medical complaint and creating an effective transition from the hospital to care in the community or a post-acute facility.

Potentially preventable hospitalization conditions include bacterial pneumonia, dehydration, urinary tract infections, congestive heart failure, hypertension, asthma, chronic obstructive pulmonary disease, and complications from diabetes.

Readmission is also more prevalent if the patient has a mental health or substance use disorder. Of the top four Medicaid diagnostic codes for both 2009 and 2010, mental health conditions accounted for the highest number of potentially preventable readmissions.[34]  

DSHS received $2 million from the Texas Legislature in 2011 to design strategies to reduce potentially preventable hospitalizations. DSHS contracted with 16 Texas counties to reduce hospitalizations and/or hospital charges for adult potentially preventable hospitalizations. DSHS already has demonstrated via interventions in Red River, Freestone, and Limestone counties that we can reduce the incidence of hospitalization for certain conditions.

Our state clearly struggles with certain disease conditions. Particular portions of the state clearly struggle more than others. Potentially preventable hospitalizations are a burden to patients and their physicians, facilities, insurers, and taxpayers. This is not solely a government problem, but because of the enormous cost of potentially preventable hospitalizations and their impact on public and private payers, we need a community response.  

Invest in mental health and substance abuse community treatment
Mental illness and substance abuse hurt the Texas economy through lost earning potential, treatment of coexisting conditions, disability payments, homelessness, and incarceration.

Mental illness is a leading cause of disability in the United States. About 13 million adults have a debilitating mental illness each year, and almost half of all adults will be affected by mental illness in their lifetime. Five percent of adults have a serious mental illness.[35]  About one in five children are affected by a mental health disorder with severe impairment in their lifetime.[36]  

More than 8 percent of Texas adults report current depression,[37] and 5.2 percent report serious psychological distress.[38]  In 2009, almost 30 percent of Texas high school students reported they felt sad or hopeless almost every day for at least two weeks.[39]  Suicide is a leading cause of death among Texans under 35 years.[40]  

More than 66,000 Texans were cared for in state-funded substance abuse treatment programs in 2010.[41]  Substance use is common in Texas students (grades 7-12), with 62 percent reporting they had used alcohol and 17.2 reporting inhalant abuse.[42]  Despite significant legislation to curtail drinking and driving, almost 40 percent of Texas driving fatalities are still associated with alcohol use. [43
In 2009, 23 percent of the adult offenders in Texas state prisons, on parole, or on probation were current or former clients of the Texas public mental health system.[44]  A Texan with a serious mental illness is eight times more likely to be in a jail than in a hospital or treatment program, at a cost of $50,000 a year. A person in jail without a mental illness costs the state about $22,000 annually. [45] 

Mental illness is also strongly associated with high-risk behaviors such as alcohol, tobacco, and illicit drug use, and results in conditions such as obesity. U.S. mental health costs were estimated to be $57.5 billion in 2006 including the cost of mental health care and the indirect costs of disability caused by mental illness.[46]  One recent study estimates that Texas state dollars spent on mental health exceed $13 billion each year. [47]  

Mental health treatment costs in the United States totaled almost $9 billion in children in 2006; Medicaid covered more than one-third of these costs.[48]  

Proper care for persons with mental illnesses saves costs associated with the cycle of incarceration, homelessness, and so forth. Assessing the return on investment connected with mental health and substance abuse care is complex because there are many different diagnoses, and the disability caused by each and the treatment plans vary greatly. In 2003, depression cost U.S. employers $44 billion in lost productivity alone. One employee assistance program in California showed a return on investment of $5.17 to $6.47 for every dollar spent on employee assistance for a mental health problem.[49]  

While Texas has recently made significant investments in community mental health services, we still rank 50th in state public mental health funding per capita. [50]  

TMA Recommendations 

  • Advocate for the patient-centered medical home (PCMH) model and financial incentives from both state and private payers. Recognize the significant start-up costs for transforming a typical primary care, fee-for-service practice into a fully functional medical home.

  • Provide financial incentives that many physician practices absolutely will need to implement electronic health records (EHRs) and other health information technology.

  • Support the use of physician-directed medical teams focused on high-quality, evidence-based care; efficient delivery; and improved access. (Right care, Right person, Right time, Right place).

  • Require regulatory agencies to align physician office technology requirements so they minimize the disruption to physician workflow and patient care in the development and use of EHRs and electronic prescribing.

  • Encourage development of EHR systems that utilize a common, open platform that will improve care coordination and limit possible negative impacts to physicians in areas like hospital credentialing.

  • Prohibit a health information exchange (HIE) from inappropriately shifting liability for its own negligent acts to physician HIE participants.

  • Ensure that evidence-based quality-of-care measures are the primary measures used in any health care quality improvement program and that program design supports the patient-physician relationship.

  • Explore collaborative relationships with the federal government that could save Medicare funds by reducing potentially preventable hospitalization conditions while sharing savings with Texas, physicians, health care providers, and local communities.

  • Identify and capture possible savings by reducing potentially preventable hospitalizations for workers and retirees covered by the Teachers Retirement System and the Employee Retirement System.

  • Increase funding for community-based mental health and substance abuse care.


Healthy Vision 2020 



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