ACHRI Researchers Tie Medicaid Cost Savings to Medical Home Program

ACHRI Researchers Tie Medicaid Cost Savings to Medical Home Program

LITTLE ROCK, AR. (March 10, 2011) - A new study by scientists at the Arkansas Children's Hospital Research Institute (ACHRI) and the University of Arkansas for Medical Sciences (UAMS) shows that clinical intervention for children with severe chronic medical conditions through one consistent clinic - a concept known as a "medical home" - can result in significant cost savings for Arkansas Medicaid.

The study, available this month through Archives of Pediatrics and Adolescent Medicine, examined the Medical Home Program at Arkansas Children's Hospital (ACH), which brings together multiple subspecialties to treat children whose cases are deemed medically complex.

These savings included costs of hospital and outpatient visits as well as medications and other related expenses and have resulted in a cost savings of $1,179 per patient per month for the year after the first clinic visit.

For the study, the research team examined the health care costs for 225 Medicaid-eligible pediatric patients enrolled in the Medical Home Program at ACH in Little Rock. The program's Medical Home Clinic provides comprehensive and coordinated care for medically complex children, those with severe chronic medical conditions.

Lead author Patrick H. Casey, MD, co-medical director of ACH's Medical Home Program, and his co-authors noted that improvements in surgical, general medical, and intensive care have increased the survival of low birth-weight children born prematurely with various birth defects, resulting in an increasing number of these children living at home. Many of these children may have an associated chronic neurodevelopmental disability, such as Down syndrome or cerebral palsy, and often require medical equipment including a gastrostomy or tracheostomy tube.

To determine Medicaid cost changes, the research team compared the Medicaid costs 12 months prior to and 12 months after the initial Medical Home Clinic visit by each of 225 patients. With this data, the predicted adjusted annual Medicaid cost for these patients before entering the Medical Home Program was estimated at $12.7 million. After a year's participation in the program, the adjusted annual Medicaid cost for the same group was about $9.5 million. The Medicaid cost savings of nearly $3.2 million results in an annual savings of $14,148 per patient for the first year.

"These results show that this type of program can result in savings while also resulting in better care for the patients and family," said Dr. Casey, Harvey & Bernice Jones Professor of Developmental Pediatrics in the UAMS College of Medicine.

Robert E. Lyle, MD, co-medical director of ACH's Medical Home Program and Neonatal Intensive Care Unit (NICU), said the Medical Home Program initially focused on children less than 2 years of age, especially those who were NICU graduates with complex disorders.

"These children were often requiring multiple trips to several subspecialty clinics and services at ACH. Their families were often frustrated and left on their own to navigate this complicated process of follow-up, and too often appointments and opportunities to provide needed care were missed," said Dr. Lyle, a professor of Pediatrics in the UAMS College of Medicine.

Established in 2006, the Medical Home Program at ACH uses a multidisciplinary approach to address the needs of medically complex children in a central location. During clinic visits, the Medical Home team consisting of a specialty nurse, nutritionist, social worker, speech pathologist, developmental psychologist and physician provide a thorough review and evaluation of the child's medical, nutritional, developmental and psychosocial conditions. Therapy plans and follow-ups are formulated and communicated to the child's primary care provider (PCP) and summarized in the child's individual health plan, a document developed for each patient and provided to the family. The plan is continually updated and available electronically to the PCP and other providers.

In November 2010, the Medical Home Program actively followed 430 patients, including children and adolescents from across the state.

"The opportunity to provide outpatient continuity to some of my long-term NICU patients has been some of the most rewarding work I have ever done," Dr. Lyle said. "The research is very important to help justify funding for the program, and it has opened clinic doors for patients."

"Hospitals that have similar programs or wanting to do this have called about our program and clinical results," says Dr. Casey. In addition to the clinic model, implementing a research component to evaluate results and to justify funding is of interest to other hospitals. "We are working with the National Association of Children's Hospitals and Related Institutions to communicate with federal Medicaid to attempt to identify methods to fund these types of programs located at children's hospitals with state Medicaid support," Dr. Casey said.

The research is available online through the Archives of Pediatrics and Adolescent Medicine and will be printed in the journal's June issue. Research support for the study was provided in part by the Arkansas Biosciences Institute, the major research component of the Tobacco Settlement Proceeds Act of 2000.

While continuing research to evaluate cost effects of the medical home concept, the ACHRI investigators plan to evaluate whether the program improved patients' health status, quality of life and their families' satisfaction with their care.

Arkansas Children's Hospital is the only pediatric medical center in Arkansas and one of the largest in the United States serving children. The campus spans 29 city blocks and houses 316 beds, a staff of approximately 500 physicians, 80 residents in pediatrics and pediatric specialties and more than 4,000 employees. The private, nonprofit healthcare facility boasts an internationally renowned reputation for medical breakthroughs and intensive treatments, unique surgical procedures and forward-thinking medical research - all dedicated to fulfilling our mission of enhancing, sustaining and restoring children's health and development. ACH recently ranked No. 75 on FORTUNE 100 Best Companies to Work For®. For more information, visit

ACHRI provides a research environment on the ACH campus to meet the needs of the UAMS faculty.  Research scientists at ACHRI conduct clinical, basic science, and health services research for the purpose of treating illnesses, preventing disease and improving the health of children everywhere. 

UAMS is the state's only comprehensive academic health center, with colleges of Medicine, Nursing, Pharmacy, Health Related Professions and Public Health; a graduate school; a 540,000-square-foot hospital; a statewide network of regional centers; and six institutes: the Winthrop P. Rockefeller Cancer Institute, the Jackson T. Stephens Spine & Neurosciences Institute, the Myeloma Institute for Research and Therapy, the Harvey & Bernice Jones Eye Institute, the Psychiatric Research Institute and the Donald W. Reynolds Institute on Aging. It is the state's only Level 1 trauma center. UAMS has 2,836 students and 761 medical residents. It is the state's largest public employer with more than 10,000 employees, including nearly 1,150 physicians who provide medical care to patients at UAMS, Arkansas Children's Hospital, the VA Medical Center and UAMS' Area Health Education Centers throughout the state. Visit or

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