But in North Carolina, a novel approach called Community Care may have found a cure. One way Community Care saves money is by keeping up with Medicaid patients who have chronic diseases such as diabetes and asthma. By making sure patients are receiving medicines and other treatment, the program cuts down on costly emergency room visits and unnecessary hospital stays.

An independent analysis shows that the state saved $2 for every dollar it spent on the Community Care system, which treats more than 810,000 Medicaid patients in 14 nonprofit networks around the state. That translates to $100 million a year in savings.

Now the success of Community Care of North Carolina is drawing national attention. The principles that guide it -- monitoring patients closely and emphasizing disease prevention -- could become the foundation for national reforms of Medicaid -- and also Medicare, the program for people 65 and older.

At a forum in Washington on Friday, representatives of the major-party presidential campaigns are booked to discuss the role the North Carolina medical-home model can play in health care reforms. In the medical-home model, patients are assigned to a case manager who helps them navigate the health care system.

"North Carolina has led on this -- it's had an instrumental role," said Dr. Ted Epperly, president of the American Academy of Family Physicians and moderator of this week's forum.

As Medicaid and Medicare costs spike -- last year's tab topped $500 billion nationally -- representatives from Community Care of North Carolina have answered requests from 32 other states to talk about the system.

Paul Harrison, executive director of Community Care of Wake and Johnston Counties, one of the system's networks, said he gets constant requests for information.

"We have people flying out to Maine and Connecticut to speak about this program in the next few weeks -- and that's just us," Harrison said.

A quiet success

Supporters call Community Care of North Carolina a quiet success that has gained attention across the political spectrum during its decade of existence. U.S. Sen. Richard Burr joined Sen. Dick Durbin, an Illinois Democrat, in sponsoring medical-home legislation in the Congress last year.

"He thinks it's worked well in North Carolina and that it's an excellent piece of an overall health care plan," Burr spokesman Chris Walker said Friday. "He's hoping to encourage other states to adopt something like this."

And Lt. Gov. Beverly Perdue, a Democrat running for governor, said Wednesday the medical-home model is "the most magnificent thing happening in America."

The medical-home system, also called "patient-centered care," gives patients a case manager. The manager works with doctors, other professionals, public health agencies, public hospitals, social service agencies and community health centers to take on all the patients' health care needs. Doctors get help with time-consuming, uncompensated general care and a management fee to subsidize extra costs.

Case managers often arrange transportation, follow up with patients who visited an emergency room for non-emergency care, send reminders about flu shots and checkups, and provide referrals to social service or public health department programs. For patients, the system smooths over or bridges many of the obstacles to getting seamless care.

North Carolina Medicaid administrators, notably former director Dr. Allen Dobson, developed the program in the late 1990s through an agreement between Medicaid and the state office Office of Rural Health and Community Care. The current economic crisis puts a premium on its efficiency in health care, said Tom Vitaglione, senior fellow for health and safety at Action for Children North Carolina.

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