Health Care System "In Pursuit of Excellence" Case Example

Geisinger Health System, Pennsylvania

December 2009

The Organization

Geisinger Health System is an integrated delivery system serving more than two million residents throughout central and northeastern Pennsylvania.  The health system is comprised of nearly 700 employed physicians across 55 clinical practice sites, three acute care hospitals, specialty hospitals and ambulatory surgical campuses, a health plan with over 235,000 members, and a variety of other clinical services and programs ranging from prenatal outreach to community-based care for the elderly.

Geisinger’s mission is “enhancing quality of life through an integrated health service organization based on a balanced program of patient care, education, research and community service.”

The Initiative

In 2006, Geisinger Health System launched its patient-centered medical home initiative.  The concept was designed to deliver value to patients by improving care coordination and optimizing the health status of enrolled individuals.  Geisinger’s comprehensive medical home utilizes additional nurses in primary care offices to coordinate care and interact directly with individual patients with the goal of improving the health of the overall population.  Some of the components include: a Geisinger Health Plan (GHP) funded nurse care coordinator; around-the-clock access to primary and specialty care; predictive analytics to identify patient and population risk trends; virtual care management support; a personal care navigator that promptly responds to consumer inquiries; home-based monitoring of patients; and a focus on proactive, evidence-based care to reduce hospitalizations, promote health, and optimize management of chronic disease.  Since its inception, the medical home concept has expanded from one practice to 35 physician practices.

Five Primary Components of the Medical Home Concept.  When it developed the medical home concept, Geisinger believed it was important to start from “scratch,” reinventing the way care was delivered rather than adding new costs and processes on top of the current overloaded system.  As organizational leaders and physicians worked together to develop a system that would provide more value to patients and a positive return on investment, they determined five basic components central to the medical home:

  1. Patient-centered primary care, such as medication reminders and patient registries.  While this concept is what most people think of when they talk about a “medical home,” it was only the first step in Geisinger’s medical home initiative.
  2. Population management activities that move many of the activities performed by the health plan to primary care offices.  In order to achieve this, primary care offices were assigned one nurse for every 800 Medicare patients for follow-up and to serve as a resource to patients.
  3. Value Care Systems, extending care beyond primary care offices. This component includes determining preferred providers for other care settings, such as ambulatory, hospital and nursing home care, to connect all components of the care continuum.  The Value Care Purchasing concept helps prevent patients from getting “lost” after they leave the physician office and receive care in a different setting.
  4. The implementation of a quality management system to measure patient outcomes, determine the impact of the medical home, and make adjustments when necessary.  Some components of this measurement system were already in place because Geisinger had existing programs focused on primary care improvement.
  5. Additional payments to providers to encourage physician participation and engagement, and support the cost of transitioning into the medical home. 

Developing and Launching the Initiative.  In 2005, the Geisinger board of directors challenged Geisinger’s leaders to focus on innovation, leading to targeted strategies around care coordination and transitions, chronic care optimization and illness prevention, and increased physician engagement.  Primary care leaders had begun initiatives to improve the delivery of chronic disease care using bundled metrics and EMR driven registries and reminder systems to improve reliability of care.  Their goal was to improve the health status of patients with chronic diseases.  Geisinger also understood that its approach to care was still largely provider, not patient, centric.  Geisinger felt if it started from the premise of designing a system of care that would give the patient the best outcomes they could improve both the quality and cost of care.  They also knew that there was an opportunity to improve outcomes significantly by providing more coordinated care.  Concurrently, the Health Plan leadership recognized the need for better outcomes for its Medicare members.  Geisinger asked the question, “How can we redesign our PCP care model to optimize patient heath status and the experience and cost of care?”  Part of the discussion also included developing a business case to determine the expected impact of the changes discussed, as well as process and outcome metrics and leadership accountabilities for moving forward with the concept.

The conversation was based on the understanding that over time, Medicare would have to limit premium payments for Medicare Advantage Plans.  GHP had over 35,000 Medicare Advantage members, so this was a critical business issue.   The organization recognized that by providing outstanding care for patients, it could simultaneously improve their health and experience of care, and reduce the cost of care. 

In 2006, Geisinger Health System leaders began working closely with clinicians to determine next steps for implementing the comprehensive medical home concept.  There was a clear business case for the initiative, but it required an initial “leap of faith” to pay the doctors more money up front with the belief that, in the long-term, the extra payments would result in more value in terms of quality and patient care.  The health system hired a dedicated Director for the initiative, and spent approximately $500,000 in employee and leadership time preparing to launch the initiative.  Geisinger then invested approximately $3.5 million in staffing and other expenses to get 11,000 members enrolled in the initiative; however, since its implementation, the health system has already benefited from cost savings significantly greater than this initial investment.

Physician Involvement.  Physician involvement in the development and implementation of the medical home concept has been critical to success.  When it was still in the development stage, Geisinger leaders began talking with primary care physicians about the need to find new ways to care for Medicare members and Geisinger Health Plan’s willingness to help financially in the transition.  Some physicians were at first skeptical, and many physicians felt that they were already providing the key components of the medical home concept without making any changes.  However, as the discussions deepened and Geisinger leaders demonstrated a clear picture to physicians about their vision and the additional resources physicians would be provided with, the physicians agreed to pilot the concept at several sites.

The addition of highly qualified, competent nurses in primary care offices helped physicians truly integrate the case management concept that had been difficult to do with limited resources in the past.  When the impact of the additional nurses became clear, credibility for the initiative grew.  Once the partnership was deemed beneficial for everyone, the participants began to work together to expand the initiative and an increasing number of physicians became interested in participating.

Use of Electronic Health Records.  All GHS-employed physicians in Geisinger’s medical home initiative have access to the system’s electronic health records (EHR), including physicians, care managers and consumers.  Five non-GHS practices participate in the Medical Home initiative.  Some did not have an EMR at the start of the program.  Consumers’ EHR access includes Internet-based lab results with trending information over time, clinical reminders, self-scheduling, secure email with providers, prescription refills, and educational information.

Referral Network.  As a part of its Value Care Systems  concept, Geisinger Health Plan and primary care providers participating in the medical home initiative maintain a list of “referral providers” for medical home participants.  The referral network includes high-volume and low-cost medical and surgical specialists, imaging facilities, and other ancillary providers.  The clinicians are both Geisinger and non-Geisinger providers and are operationally linked with the primary care practices to enhance patient value and ensure continuity of care.

Physician Financial Incentives.  To encourage physician participation and support the transition to the medical home initiative, Geisinger Health Plan offers practice-based payments to participating physicians in addition to their already agreed-upon fee-for-service rates.  Individual GHS physicians received a monthly stipend to reward them for actively participating in the program, and to recognize them for the expanded scope of their practice.  The practice received a monthly stipend of $5,000 per one-thousand Medicare enrollees.  The additional payments are intended to help finance additional staff, support extended hours, and implement other practice infrastructure changes.

In addition, an incentive pool is established based on the differences between the actual and expected total cost of care for medical home enrollees.  Incentive payments from the pool are conditional upon performance in meeting pre-determined quality indicators, with actual payment amounts based on the percentage of targets met for specific quality metrics.  Incentive payments are split between individual providers and the practice as a whole to encourage team-based care and support.  The practice stipends are netted out of the ultimate incentive payments.

A Focus on Outcomes.  Each medical home practice receives a detailed monthly performance report outlining their quality and efficiency results based on pre-determined measures.  The performance reports are reviewed together with an integrated Geisinger Health Plan practice site team every month to identify trends and opportunities for improvement and develop change management plans to address challenges or deficiencies.

Challenges Encountered When Implementing the Medical Home Concept.  One of the greatest challenges Geisinger Health System encountered was changing the care process in a way that went “against the grain” of traditional forms of care.  Moving beyond patient-centered primary care to a more comprehensive system that included redesigning the approach to care in non-physician office environments required a new way of thinking.  For example, a focus on preventing nursing home readmissions involved new steps for physicians who had historically not been involved in that part of the patient care process.  In addition, population management was a new concept to many providers.  Looking at population reports rather than individual patient reports was a learning experience for participating providers, but gradually the population perspective became better understood and used.

Throughout the implementation process, physicians worked together on the logistics of how to execute the concepts.  The combination of physician willingness to work together, clinical leadership, and the commitment and entrepreneurial focus of both the professional staff and the new clinical staff helped the initiative to be successful.  In addition, the organization’s “permission” and encouragement for clinicians and staff to try new things, learn from their mistakes, and make adjustments has encouraged innovation and resulted in improved processes and outcomes.  Finally, the practices adopted the team care concept of “operating at the top of one’s license.”  Nurses’ aides, LPNs and other office staff were empowered to provide services that in the past were the responsibility of the physician.

Creating a Business Case for the Medical Home Concept.  Although being part of an integrated system is not necessary to implement a comprehensive medical home initiative similar to Geisinger’s medical home, having a payer partner is a critical component of the concept.  The participating stakeholders must have a business case for implementing the initiative, and a hospital system acting on its own without provider payment arrangements and incentives may lack the financial business case for the hospital to pursue the initiative with the rigor necessary.  Partnering with a payer requires all parties to understand that they can provide better care managing patients across the continuum by working together and pooling resources in the most effective way.
Geisinger’s success in implementing its medical home concept in both Geisinger practices, as well as practices  that are not part of the system, demonstrate that being part of a system is not the most critical component to success.  Instead, clear strategic intent, a shared commitment to improving value and maximizing relationships and innovation, and a business case for all the stakeholders involved is essential.


Preliminary data shows a significant improvement in the total cost of care in the Medicare population participating in the medical home initiative, primarily due to improvements in inpatient utilization and readmission rates.  Hospitals are seeing fewer patients because of the decrease in admissions and readmissions, which means that the approach to the way care is delivered has shifted.  Patients report high satisfaction with the program, indicating that they believe they receive better care, are able to avoid going to the hospital when they do not need to, and have support that they had not had in the past.  Having a direct line to a nurse case manager that personally knows the patients and their unique situation not only assures patients but also their family members. 
Based on initial positive results, Geisinger Health System is continuing to expand its medical home concept.  The initiative us currently underway at 30 Geisinger sites and five non-Geisinger practices, covering more than 50,000 Medicare Advantage and fee-for-service Medicare patients and commercial patients.


Prior to implementing the medical home concept, challenges related to transitions of care and other contributors to readmission rates were often overlooked because the system was disjointed, with no one group or organization taking ownership for overall patient care.  The use of medical homes to provide comprehensive, seamless care has had a significant impact not only on cost but also on the quality of care that patients receive when they transition from one provider or facility to another.

Geisinger Health System views the medical home model as core to providing patients with more value, particularly in Medicare patients where there is a significant opportunity to impact the population.  In addition, instituting medical homes has reinforced the concept among employees, physicians and organizational leaders that there is the potential to provide care in a better, more efficient way.  It has encouraged innovation and created a more fertile environment for people to think creatively and make changes in other areas as well, bringing excitement to the organization and helping employees and physicians to feel good about the work they are doing and the impact they have. 

Contact Name: Rick Gilfillan, MD
Title: Consultant to Geisinger Health System
Tel: (202)471-4245



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