Medical Home - Can Cost Savings be Replicated?

I was at an AMA meeting over this weekend, and listened to an interesting presentation on "Advanced Medical Home."   The general idea is to pay local primary care physicians to do real patient management -- and this could alleviate unnecessary hospital admissions, emergency department visits, and adverse outcomes.   The presenters were Paul Grundy, MD of IBM and Don Klitgaard, MD, the physician leader of the Myrtue Medical Clinic in rural Iowa. This clinic has totally reengineered its processes to provide much-improved accessthe coordinating services of a real medical home.  It also adopted an electronic health record.  Quality, patient satisfaction, and cost-effectiveness all appear to be on the rise.  The doctors are happy too!

An employer coalition is supporting this approach -- see this web site for more information.  Some early studies in North Dakota and at Geisinger Clinic in Pennsylvania have shown substantial cost savings.  

My concern is that North Dakota and Central Pennsylvania (and Harlan, Iowa) are rural. There are large distances, and while there is access to excellent medical care, there is much less built-up "medical industrial complex" in these communities. Therefore, any savings from medical home might only be reproducible in other regions if we remove some of their existing medical infrastructure.  These savings, therefore, would not be realized early.  

I fear that employer support for the medical home might not persist if it were only cost-effective (increased quality for a reasonable price) rather than cost-saving.

Paul Grundy's background slides are posted by the CDC on its website