We've mentioned Community Care, North Carolina's innovative Medicaid program for chronic disease management, briefly in the past but today's News and Observer takes a detailed look. Community Care has been shown to save money —and improve the quality of care for Medicaid patients with conditions such as diabetes and asthma. The savings are impressive—$100 million a year, or $2 for every $1 the state spent on the program, which covers 810,000 Medicaid patients in "medical homes" through 14 nonprofit networks around the state.

The patients are monitored closely, so that conditions are kept in check and complications and hospitalizations are minimized. Case managers work with physicians and other providers, hospitals, public health and social service agencies to coordinate comprehensive care and make sure that patients don't fall through the cracks and that transitions—say after a hospital admission—are handled smoothly. Doctors get paid a fee to compensate them for the time-consuming aspects of care coordination and management that are often go not reimbursed.

"What's different about this is that the doctors, the pediatricians, the family physicians are really in charge," Adam Searing, director of the N.C. Justice Center's Health Access Coalition told the newspaper. "Health providers are getting reimbursed for the time they take in providing the care. If the doctor gets some monthly amount, and you have enough patients, that adds up to another person in your office that can handle [case management]."

North Carolina's approach offers many lessons (including the fact that state officials stuck with it during the early years, when it needed some tweaking and experimenting). Other states apparently want to learn; the newspaper reported that at least 32 states had contacted North Carolina to hear more about the system, and North Carolina is working with federal officials to see if they can expand the program to Medicare beneficiaries as well. Private insurers and businesses have also shown growing interest in the medical home approach, and not just for the poor in the Medicaid program. The growing interest is encouraging; medical homes address some of the cost and quality gaps in our system—and can address the needs of millions of Americans with chronic diseases. The concept has bipartisan support and we hope the public and private sector alike press ahead with lots more of these patient-centered models.