Study: Medical Homes Saved North Carolina Nearly $1 Billion

The idea of medical homes — a method of coordinating medical services that relies on primary care physicians to manage patients’ care — has been around for more than 40 years. North Carolina, a leading innovator in the field, has used medical homes to improve care and lower costs in its Medicaid program since 1991.

Now, the federal Affordable Care Act is encouraging all states to experiment with the model by offering to pay for 90 percent of the costs for the first two years. But few studies have identified the savings that can be achieved from this type of program.

This month, a study commissioned by the North Carolina legislature found that Medicaid recipients in a medical home program got better care and consumed significantly fewer state dollars than those who received traditional fee-for-service care. According to the study by actuarial firm Milliman Inc., North Carolina avoided spending $984 million by placing 1.1 million Medicaid enrollees in medical homes between fiscal years 2007 and 2010...