Cost of Transformation among Primary Care Practices Participating in a Medical Home Pilot

Martsolf, Grant R.; Kandrack, Ryan; Gabbay, Robert A.; Friedberg, Mark W.

doi:10.1007/s11606-015-3553-6

Cited by 25 publications

(43 citation statements)

References 19 publications

(20 reference statements)

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“…To provide optimistic financial sustainability estimates for PCMHs, we did not include highly variable up-front costs of transformation in our base-case simulation, 39 only the costs to maintain PCMH functions after transformation. Furthermore, we defined the minimum criteria to match the standards accepted for PCMH financing by payers responding to a previous national PCMH survey, 4 which included basic (level 1) PCMH standards for accreditation by the National Committee for Quality Assurance (NCQA) and accreditation by other major agencies, including the Utilization Review Accreditation Commission and the Joint Commission.…”

Section: Pcmh Simulationmentioning

confidence: 99%

Effects of New Funding Models for Patient-Centered Medical Homes on Primary Care Practice Finances and Services: Results of a Microsimulation Model

Basu

Phillips

Song

et al. 2016

The Annals of Family Medicine

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PURPOSEWe assess the financial implications for primary care practices of participating in patient-centered medical home (PCMH) funding initiatives. METHODSWe estimated practices' changes in net revenue under 3 PCMH funding initiatives: increased fee-for-service (FFS) payments, traditional FFS with additional per-member-per-month (PMPM) payments, or traditional FFS with PMPM and pay-for-performance (P4P) payments. Net revenue estimates were based on a validated microsimulation model utilizing national practice surveys. Simulated practices reflecting the national range of practice size, location, and patient population were examined under several potential changes in clinical services: investments in patient tracking, communications, and quality improvement; increased support staff; altered visit templates to accommodate longer visits, telephone visits or electronic visits; and extended service delivery hours. RESULTSUnder the status quo of traditional FFS payments, clinics operate near their maximum estimated possible net revenue levels, suggesting they respond strongly to existing financial incentives. Practices gained substantial additional net annual revenue per full-time physician under PMPM or PMPM plus P4P payments ($113,300 per year, 95% CI, $28,500 to $198,200) but not under increased FFS payments (-$53,500, 95% CI, -$69,700 to -$37,200), after accounting for costs of meeting PCMH funding requirements. Expanding services beyond minimum required levels decreased net revenue, because traditional FFS revenues decreased.CONCLUSIONS PCMH funding through PMPM payments could substantially improve practice finances but will not offer sufficient financial incentives to expand services beyond minimum requirements for PCMH funding. Ann Fam Med 2016;14:404-414. doi: 10.1370/afm.1960 INTRODUCTIONA s of 2014 at least 114 distinct initiatives from state, federal, and private payers funded primary care clinics to offer services as patient-centered medical homes (PCMHs)-practices delivering comprehensive care for most health problems; coordinating care among multiple clinicians; and achieving heightened standards for accessibility, quality, and safety. [1][2][3][4] These initiatives, which now involve at least 21 million patients in the United States, 4 intend to improve access and quality while delivering population-based care at lower cost. [1][2][3] To do so amidst workforce constraints, practices face challenges, including adopting process improvement techniques and electronic registries for care management, expanding care teams, offering patients longer in-person visits and access to electronic or telephone visits, and extending night and/or weekend business hours to enhance care access. 1,[5][6][7][8] According to recent national surveys, 3 major payment strategies have dominated PCMH initiatives: increased fee-for-service (FFS) payments, traditional FFS payments with additional per-member-per-month (PMPM) payments, and Sanjay Basu, MD, PhD 1,2 Russell S. Phillips, MD 2,3 Zirui Song, MD, PhD 2,4 Bru...

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Section: Pcmh Simulationmentioning

confidence: 99%

Effects of New Funding Models for Patient-Centered Medical Homes on Primary Care Practice Finances and Services: Results of a Microsimulation Model

Basu

Phillips

Song

et al. 2016

The Annals of Family Medicine

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“…8 In this issue of JGIM, Martsolf and colleagues from RAND and Harvard provide important insights into the costs associated with implementing medical homes. 15 They report on the initial transformation and ongoing operational costs associated with implementing medical homes at 12 primary care practices participating in the Pennsylvania Chronic Care Initiative (PACCI), a statewide multi-payer medical home pilot program including both commercial and Medicaid managed care plans. The costs of medical home transformation were determined by conducting semi-structured interviews with practice managers and other practice representatives to identify the structural and functional changes directly related to medical home transformation, and then calculating the costs corresponding with the changes.…”

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confidence: 99%

“…15 One-time start-up costs to transform to medical home practice ranged from $7,694 to $117,810, with a median of $30,991, while ongoing annual operating costs ranged from Published online April 11, 2016 $83,829 to $346,683, with a median of $147,573. These equated to per clinician median start-up and annual ongoing costs of $9,814 and $64,768, respectively, and per patient start-up and ongoing costs of $8 and $30, respectively.…”

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confidence: 99%

“…Martsolf et al found that hiring care managers to help coordinate care was the single greatest ongoing cost associated with the medical home. 15 Knowing how much the various infrastructure elements cost, and then linking them to clinical outcomes, is necessary to determine how the model affects health care value, as well to fashion appropriate financial assistance mechanisms and payment policies that will facilitate successful transformation and sustain the ongoing operation of medical homes.…”

mentioning

confidence: 99%

“…While quality and utilization outcomes achieved by PCMHs have produced divergent and conflicting results, the results are more consistent when comparing fully implemented medical homes to traditional primary care practices, instead of comparing participants and non-participants in practices striving to become medical homes. 15 The divergent outcomes may result, at least in part, from medical home intervention participants simply being unable to afford the costs of fully transforming to a medical home, and therefore never being able to achieve the desired outcomes.…”

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confidence: 99%

See 2 more Smart Citations

Understanding the Costs of Patient-Centered Medical Homes

Kizer

2016

J GEN INTERN MED

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Comparing costs of a senior wellness care redesign in group and independent physician practices of an accountable care organization

Bustamante

Martínez

Rich³

et al. 2018

Health Planning & Management

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Primary care redesign for older adult patients is currently ongoing in countries with aging populations. One of the main challenges of this type of transformations is how to estimate implementation costs in different types of health care delivery organizations. This study compares start-up and incremental expenses of implementing a primary care redesign across 2 organization types: integrated group (n = 31) practices and independent practice association (IPA) sites (n = 213). Administrators involved with implementing the redesign completed a cost capture template to quantifying expenses. The potential impact of measurement error, recollection bias, and implementation models across sites and geographic regions was examined in sensitivity analyses. Marginal start-up and incremental expenses were higher for Group sites ($122-$328) compared to IPA sites ($31-$227). Group and IPA sites, however, implemented the redesign with different intensities. According to our analyses, if IPA sites implemented the redesign with the same intensity as Group sites, marginal costs would have been $5 to $13 higher for IPA sites than for Group sites. This study shows how a flexible approach to estimate the cost of a wellness care redesign is needed when the intensity of the transformation differs across 2 different types of health care organizations.

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Cost of Transformation among Primary Care Practices Participating in a Medical Home Pilot

Cited by 25 publications

References 19 publications

Effects of New Funding Models for Patient-Centered Medical Homes on Primary Care Practice Finances and Services: Results of a Microsimulation Model

Effects of New Funding Models for Patient-Centered Medical Homes on Primary Care Practice Finances and Services: Results of a Microsimulation Model

Understanding the Costs of Patient-Centered Medical Homes

Comparing costs of a senior wellness care redesign in group and independent physician practices of an accountable care organization

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