Health Care Homes: not yet where the heart is

Doctors have called on the Federal Government to delay the implementation of the Health Care Homes model from the current starting date of 1 July 2017 by at least three to six months. Here’s why.

United General Practice Australia, which comprises the leading general practice organisations RACGP, AMA, RDAA, GPSA, GPRA, ACRRM and AGPN, has serious concerns regarding capitated funding for chronic disease management and treatment. It may harm patients, and it may undermine GP-led care when funding runs out.

Additional time to plan for the Health Care Home model is required to get the nation’s healthcare system right and properly consider, design, and implement the supporting tools, information and adequate funding mechanisms.

The extended timeline would allow stakeholders time to ensure the instruments and tools being used are appropriate and validated by evidence.

Health Care Homes: the background

A Health Care Home (HCH) is not a place but a partnership between a patient, their GP and the primary care team. Health Care Homes are general practices and Aboriginal Community Controlled Health Services that coordinate the ongoing comprehensive care of patients with chronic and complex conditions.

As part of the 2016-17 Federal Budget, the Government announced the Healthier Medicare: Reform of the Primary Health Care System package. The core element of the package was the staged rollout of Health Care Homes in selected Primary Health Network regions starting in July 2017.

The Government has re-directed $21.3 million from the Practice Incentive Program and is redirecting a further $93 million in MBS funding to support the HCH trial.

HCHs have the potential to drive a fundamental shift in Australia’s health services toward patient-focused health care practices and are a modified version of the Patient-Centred Medical Home (the Medical Home).

The HCH aims to facilitate a partnership between individual patients, their preferred GP, and the extended healthcare team. The model should enable better-targeted and effective coordination of clinical resources to meet patients’ needs.

Patient-centred Medical Homes have been associated with increased access to appropriate care and decreased use of inappropriate services – particularly emergency departments – for patients with chronic and complex conditions.

The clinical team– which may include GPs, nurses, nurse practitioners, Aboriginal health workers, care coordinators, allied health professionals and other medical specialists – collectively provides care for patients.

The HCH aims to meet as many of the patient’s healthcare needs as possible and for collaborating with other health and community services.

In the current proposal Health Care Homes will receive monthly ‘bundled payments’ on a per patient basis, depending on each eligible patient’s level of complexity and need. The payments will be paid to the Health Care Homes, not GPs.

All general practice healthcare associated with the patient’s chronic conditions, previously funded through the MBS, will be funded through the bundled payment. Regular fee-for-service will remain for routine non-chronic disease-related care patients.

Funding for services provided by allied health professionals and specialists, as well as for diagnostic and imaging services are not included in HCH bundled payments and will continue to be funded through the MBS.

Stage one is limited to Medicare-eligible patients with two or more complex or chronic conditions. Patients that fall within three identified tiers will be eligible to enrol in a Health Care Home.

The Department of Health is developing a patient identification tool to be used by HCHs to identify eligible patients as per the tiers. The Department states that the tool will attribute a risk score to each patient, which will determine the level of care required and subsequently the value of quarterly bundled payments that HCH will receive.

Unfortunately details on the eligibility assessment tool have not yet been released, but will likely draw upon information the practice already has on the patient (for example previous hospital admissions, diagnosis, medications, clinical risks), as well as non-clinical information such as demographic and psychosocial factors.

The patient identification process will be the same across all stage-one HCHs, regardless of whether or not they are in rural and remote areas.

The Practice Incentives program (PIP), a key driver of quality care in general practice, is currently undergoing reform. The redesigned PIP program will reportedly introduce a quality improvement incentive to replace the clinical specific incentives in the current PIP and provide a ‘flexible and supportive structure to the HCH implementation’.

Stage one of the implementation is currently set to commence on 1 July 2017 and run for two years until 30 June 2019. It will involve approximately 65,000 patients and up to 200 general practices or Aboriginal Community Controlled Health Services.

Medical Home RACGP
Key elements of the medical home. Source: RACGP

Why doctors have expressed concerns

One of the key recommendations by the Primary Health Care Advisory group was to encourage patients to be engaged in their care (recommendation 3). Although the model was intended to be ‘patient-centred’, the patient somehow seems to have been lost in the discussion around the current model.

For example, it is not clear how the proposed model will encourage better coordination or comprehensiveness of care to improve the patient journey (recommendation 7).

For a long time the RACGP and other professional groups have been actively offering to work with the Government on the development of an appropriate model, but the RACGP and other GP groups were not consulted in this case. The general practice representatives on the Government’s implementation committees are not representing their professional associations and furthermore have had to sign confidentiality agreements so therefore cannot discuss ideas and recommendations with peers or policy development staff.

The Government claims that it is implementing a model based on the RACGP vision. Unfortunately the current Health Care Homes proposal by the Department of Health does not reflect the RACGP’s evidence-based, best practice model of the Medical Home, as outlined in the RACGP Vision for general practice and a sustainable healthcare system.

The RACGP has called for a rigorous trial subject to academic and scientific evaluation, rather than rushing into a phased rollout. The HCH implementation evaluation methodology is still under development. Health policy needs to be evidence-based and the evidence should to be carefully developed – otherwise it will fail patients and the Australian health system.

A correctly designed trial will properly address the challenges facing Australia, strengthen access to the delivery of high-quality care and ensure patients have a stable and ongoing relationship with a general practice.

The proposed model capitates funding for chronic disease management and treatment in general practice. It may harm patients and undermines GP-led care when funding runs out.

This major reform, which is expected to save millions of dollars in hospital care, did not receive additional funding. GP groups are concerned that the federal Government’s Health Care Homes model is inadequately funded and will not improve health outcomes for millions of Australians living with chronic and complex conditions.

An example of concerns

HCHs will be required to have a service or care coordinator for enrolled patients. As funding allocated to the HCH is in fact reallocated funding from PIP and Medicare, there is no additional money available to support this role.

There is presently not enough information available for practices to make an informed business decision about their involvement with the HCH.

Information released by the Government does not provide details on any additional support for e.g. practices in rural and remote areas and no additional funding is being provided for these areas, where there are higher costs and complexity in providing chronic health care.

The original RACGP Medical Home vision includes incentives for practices and GPs to facilitate patient-centered care, for example a complexity loading to support the delivery of patient services in areas of community need.

The RACGP vision also recommends a comprehensiveness loading: GPs and general practices that provide a comprehensive range of services can respond to the needs of the community they serve. Enhancing the comprehensiveness of services provided in the primary health sector will reduce demand for more complex and expensive services in the secondary and tertiary health sectors.

Medical Home model (RACGP)
Table: Activities and infrastructure required to achieve healthcare sustainability according to RACGP. There is a clear distinction between the Government’s HCH funding model and the RACGP Medical Home model. Source: RACGP.

The Department has indicated that payments made to a HCH are also intended to cover after-hours services where they are provided in the practice rooms. Some practices may achieve efficiencies by providing some care for enrolled patients over the phone or electronically.

Each practice will need to determine if the allocated funding in the proposed model is sufficient to provide the additional care required under the HCH model.

The Department has stated that successful HCH applicants will receive a one-off payment of $10,000. The RACGP believes that an appropriately funded HCH trial would require an average of $100,000 per practice per annum, in addition to current funding allocations for chronic disease management items and other MBS items.

As the funding of the HCH by the Federal Government is minimal, additional funding from State Governments and Private Health Funds may be necessary to make the model a success. The federal Government could assist by negotiating such payment levels as part of the HCH.

The RACGP is prepared and ready to work closely with the Federal Government on this major health reform – let’s not miss the opportunity to make Health Care Homes a success.

This article was originally posted on Croaky. Dr Edwin Kruys is vice-president of the Royal Australian College of General Practitioners (RACGP). 

The information in this article is based on public material provided by the Department of Health. Whilst all efforts have been made to ensure the details are accurate, information regarding Health Care Homes is subject to change.
Follow me on Twitter: @EdwinKruysDisclaimer and disclosure notice.

Table: Health Care Home requirements

(Source: Department of Health)

A general practice or Aboriginal Community Controlled Health Service applying to be a Health Care Home must be within one of the ten selected PHN regions and needs to:

  • be accredited and maintain accreditation, or be registered for accreditation, against the RACGP Standards for general practices;
  • participate in, or be prepared to participate in, the Practice Incentives Program (PIP) eHealth Incentive;
  • register and connect to the My Health Record system and contribute to their enrolled patients’ My Health Records;
  • participate in the stage one HCH training program;
  • use the patient identification tool to identify the eligible patient cohort in their practice or service, assess individual patient eligibility and stratify their care needs to one of three complexity tiers according to their level of risk;
  • ensure that all enrolled patients have a My Health Record;
  • contribute up to date clinically relevant information to their patients’ My Health Records;
  • develop, implement and regularly review each enrolled patient’s shared care plan;
  • provide care coordination for enrolled patients;
  • provide care for enrolled patients using a team-based approach;
  • ensure that all team members have roles that utilise their qualifications and allow them to work to their scope of practice;
  • provide enhanced access for enrolled patients through in-hours telephone support, email or video-conferencing, as well as access to after-hours care where clinically appropriate;
  • ensure that all enrolled patients are aware of what to do if they require access to after-hours care;
  • collect data for the evaluation of stage one and for internal quality improvement processes.

11 thoughts on “Health Care Homes: not yet where the heart is

  • Edwin, Thanks for this useful explanation of what is lacking in the government’s Health Care Homes model.

    65,000 patients to be enrolled in 200 practices = 325 patients per practice. This is a lot of patients per practice for a trial scheme – which I understand is not being or no longer being called a trial, but phase 1.

    Two small comments:

    It is worth being careful with the use of the word ‘regular’. Many Australians have adopted the American usage of this word to mean things like ‘standard’ ‘usual’ or ‘common’. It does not mean any of these things. It is about whether there are equal intervals of times between the events being discussed. The government’s Health Care Homes scheme proposes regular monthly payments in arrears. When you said “Regular fee-for-service will remain for routine non-chronic disease-related care patients.” this could lead to some confusion about whether any fee for service Medicare benefits that patients claim will also be paid monthly. I suggest that in future it would be better to say something like: “Existing fee-for-service will remain for routine non-chronic disease-related care patients.”.

    My other small comment is about the word ‘routine’ in your sentence: “”Regular fee-for-service will remain for routine non-chronic disease-related care patients.” What would be considered not to be ‘routine’ care? Would it be better to delete the word ‘routine’?


  • I do not believe this system will work without it being Co-ordinated by a skilled Registered Nurse Div 1. The reason? Nurses (especially e.g. Nurses who are working or who have worked in the community e.g. RDNS) are well used to liaising extensively with the broader ‘team’. They in fact are often the ‘hub of the wheel’. There is a large admin role needed for this project, one based on a knowledge of wholistic care and with a knowledge of medical conditions. Can you honestly see a busy GP, now pretty much trained in short consultation processes, wanting to wade into more admin, more referrals, more overview, more liasion? The GP Management Plans only worked when an experienced RD Div 1 was employment to co-ordinated and ‘manage’ this program. I remember the farcical letter written by a leading GP saying they just didn’t have the time to do chronic care management or to do the GPMP’s – it wasn’t actually their job to ‘do them’ but the writer couldn’t see it was a team effort, led and co-ordinated by an RN Div 1, employed by the practice!

    Can a GP ‘do’ chronic care in a short visit? Clearly not. Do they have the time, the skill, the knowledge and wholistic awareness to oversite the complexities of chronic disease management? An example would be how many GP’s ‘manage’ the full care required by their diabetic patients? Shared care is the way, shared with skilled and experienced RN Div 1 colleagues.

    Having worked as a Practice Nurse, and within RDNS, I have seen so often the inadequacies inherent in chronic disease management when a fully co-ordinated team is not engaged. And to reassure you, this is neither doctor bashing nor an encroachment on a GP’s role, but rather a desire to broaded the potential of patient care.


    • Dear Marion, thanks for your comment. I agree that the health care home will not work without nurses. They are an essential part of general practice and any Medical Home model.

      Of course it’s is not just about nurses, or pharmacists or doctors or anyone else, but about creating the right circumstances so we can work better together as a team. As you say, shared care (or integrated care) is the way.


      • Edwin, I note your recognition of Marion Ryan’s contribution, and of the role of nurses in ‘integrated care’. My comment below was drafted before you made this comment, but added afterwards. I also respect Marion Ryan’s ideas and experience, but I am concerned at (as I describe below) the circumstance where we GPs simply do ‘short consults’ (as that is what Medicare and our budgets demand) to entitle and generate the income needed to cover the cost of a nurse’s periodic global review of a clinical case – in what, at present is a GP Management Plan. Now to be incorporated into Medical Home care, and the capitation fee. Nurses are becoming more comprehensively clinically skilled. We less clinically skilled. If this continues, there will be a ‘cross-over’ in the future.
        I mean no disrespect of Marion Ryan’s contribution. She accurately describes the circumstance.

        Liked by 1 person

      • Edwin, my apologies for my length, but I have developed some actual income statistics. You and your readers may find the following useful. I have developed these from Oliver Frank’s statement at the beginning…

        “65,000 patients to be enrolled in 200 practices = 325 patients per practice. This is a lot of patients per practice for a trial scheme – which I understand is not being or no longer being called a trial, but phase 1.”

        On the government’s own statistics, this means a total technical patient complement is 1625, of which 325 are stratified in three tiers. 10% in tier 1 [=163 patients, average yearly payment $591], 9% in tier 2 [= 146 patients, $1267] and 1% in tier 3 [16 patients, average yearly payment $1795]. One can immediately calculate the years ‘billings’ – by capitation payment – for these 1625 patients. Tier 1, 163 patients $93,333; Tier 2, 146 patients $184,982; Tier 3, 16 patients $28,720.

        The total yearly revenue for patient care of these 325 patients is $307,035.

        At the present common split of GP ‘before tax income’ to practice overheads at 65%/35%, this would provide the GP with almost exactly $200,000. The business would retain $107,000, which would equate to an average of $330 to cover the cost of care for each enrolled patient.

        At present, a before tax income of $250,000 representing 65% of practice earnings equates to yearly gross billings of $385,000. A 5 day working week, for 48 weeks in the year, requires the GP to generate billings of $1600 per day.

        Under the government’s projection, the other 80% of patients represent a complement of 1300 patients. These by and large are healthy (no chronic, complex illness) although a significant proportion will be children. To generate $80,000 from these means an average yearly billing of $62 from each. Slightly less than two bulk-billed consults. But how often do they attend?

        And we are comparing apples and oranges. Considering the government’s expectation that all of the 325 patients (with chronic and complex illnesses) will have their My Health Record updated at each clinical intervention, and that the patient’s GP…

        develop, implement and regularly review each enrolled patient’s shared care plan;

        provide care coordination for enrolled patients;

        provide care for enrolled patients using a team-based approach; [This means clinical committee reviews, each participant being paid for their attendance out of the pool of funding, which means all allied health will be paid for participating in a new role.]

        ensure that all team members have roles that utilise their qualifications and allow them to work to their scope of practice;

        provide enhanced access for enrolled patients through in-hours telephone support, email or video-conferencing, as well as access to after-hours care where clinically appropriate;

        collect data for the evaluation of stage one and for internal quality improvement processes.

        …what is the quantum of these additional costs? At present, one can simply hazard a guess. What will be the government’s response to some clinics’ claiming that since their patient base is substantially ‘retirees’, they have more than 325 patients with complex chronic illnesses on their books, and a greater proportion in tiers 2 and 3? Presumably the government knows its response, but it still has to tell us.

        I would appreciate some checking of and some comments on this analysis.

        Liked by 1 person

  • The plan is that the care for all patients with chronic and complex conditions will be paid by capitation. A specified monthly payment, the quantum determined by ‘stratification’ into three tier levels. In the ‘standard practice’ (of each full time equivalent GP) this equate to 20% of their patient base, 10% at the low [1] tier, 9% at the mid [2] tier, 1% at the high [3] tier. The stratification criteria have not yet been announced – obviously now will not to be announced until after practices have ‘signed up’. (That is insufferable.)
    Patients with any sort or degree of chronic or complex illness will expect to be included. In their eyes (and the government’s eyes) that precludes any practice expectation of a co-payment. No matter how ‘well-off’ they are. It is probable that patients requesting tier 1 classification will constitute substantially more than 10% of the patient base. But from the patient’s perspective, it does not much matter on which tier they lie, as they are then promised all relevant care (and all desired consultation time) by the Medical Home system, even if it goes ‘over budget’.
    It is critically important to the practice budget that patients are escalated into higher tiers wherever possible. Since we do not know the criteria, who will be administratively responsible for deciding the stratification, and what right of appeal GPs, clinics and patients have, we cannot even model the likely outcome. The Health Department has been modelling this for well over 6 months. Those doctors who have been consulted have had to sign confidentiality agreements. The government knows everything. The profession knows nothing. This is utterly wrong.
    The capitation payment must cover all operating expenses, and the remuneration of the doctor and his or her part of the practice nurse expense. Allied health practitioners technically are covered externally, but what and how many services will be covered has not been disclosed. It may be that the number of services will equate with what at present is available under GP and Mental Health Care Plans. But these commonly are inadequate, and patients will expect more, to be paid out of the ‘general practice budget’, since the government will publicly claim that this is more than before, is more than enough, and clinical efficiencies obtained through the ‘Medical Home’ will free up even more funding.
    How individual doctors’ monthly remuneration will be paid out of what remains after these expenses to be paid, will be left to the clinic doctors to squabble over. And squabble they will. I expect that the total quantum, then divvied up, will provide each GP with less than what they were earning before. After the money ‘runs out each’ month, for the rest of the month, the doctors will work ‘pro bono’.
    The ‘My Health Record’ requirement will significantly extend ‘consultation times’ – for all patients, in all consultations. It will need to be open at the beginning of the consultation – to access past and contemporaneous information. But there is the need to maintain a practice record confidential to the clinic, for essential and relevant information that the patient does not want ‘broadcast’. That means two separate pages open on the same monitor. ‘Curating two parallel records at the same time. Having completed the confidential practice record, the doctor will need to consider – in consultation with the patient – what of this information is to be uploaded to the ‘Medicare cloud in the sky’. The time taken to consider, determine and execute this decision is part of the consultation time – no matter how much time the patient then takes to consider their choices. It probably is prudent to print out the final agreed document for the patient to take, get the patient to sign a copy, and scan the signed copy in. That is the only reliable way to subsequently prove that the patient did give consent, and what that consent covered.
    The role of the practice nurse becomes paramount. The role described above by Marion Ryan is actually the role of a ‘nurse practitioner’ who will undertake all the comprehensive care, and stand in for the doctor in the clinical coordination meetings. As she has written: ’…provide care for enrolled patients using a team-based approach…’ ‘…led and co-ordinated by an RN Div 1, employed by the practice.’ The GP will simply have too many consultations, requested by patients, since the GP is now at their ‘beck and call’. Marion Ryan is really very adroit! She calls it exactly as it will be:
    “Can a GP ‘do’ chronic care in a short visit? Clearly not. Do they have the time, the skill, the knowledge and wholistic awareness to oversite [sic] the complexities of chronic disease management?” [She presents this as a rhetorical question, but the answer she sees is patently obvious. This is a ‘put-down’.] As she sees it “An example would be how many GP’s ‘manage’ the full care required by their diabetic patients? Shared care is the way, shared with skilled and experienced RN Div 1 colleagues.”
    It is the nurse practitioners who will become the ‘specialist’ ‘general physicians’ of the new era, and overtake us in expertise and income. And at the present, in the circumstance of ‘capitation’, they will be on secure salaries, paid at their level of expertise.

    General practice needs to consider the clinical roles, practice governance, and the budgeting of capitation with great care, and considerable trepidation. The reality is that we should now be demanding a professional salary, with the government responsible for the budget of each ‘Health Care Home’.

    Liked by 1 person

  • Edwin,

    I think you have been a little conservative with your statement that there is not enough information for practices to make an informed decision. I disagree. I think there is enough information out there now to see that for the vast majority of practices in Australia there is no business case. The only businesses that could take it on under the current model would be the solo doctor or the practice where everyone is employed, which may suit some AMSs.


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