Costs of Transforming Established Primary Care Practices to Patient-Centered Medical Homes (PCMHs)

Abstract

Background:The patient-centered medical home (PCMH) shows promise for improving care and reducing costs. We sought to reduce the uncertainty regarding the time and cost of PCMH transformation by quantifying the direct costs of transforming 57 practices in a medical group to National Committee for Quality Assurance (NCQA)-recognized Level III PCMHs.Methods: We conducted structured interviews with corporate leaders, and with physicians, practice administrators, and office managers from a representative sample of practices regarding time spent on PCMH transformation and NCQA application, and related purchases. We then developed and sent a survey to all primary care practices (practice-level response rate: initial recognition-44.6%, renewal-35.7%). Direct costs were estimated as time spent multiplied by average hourly wage for the relevant job category, plus observed expenditures.

Practice Expenses Associated with Comprehensive Primary Care Capabilities

“…In this section, we review the methods used by eight studies that attempted to measure costs that practices incurred in delivering comprehensive primary care capabilities (Zuckerman et al, 2009;Nocon et al, 2012;Patel et al, 2013;Magill et al, 2015;Halladay et al, 2016;Martsolf et al, 2016;Shao et al, 2016;Fleming et al, 2017). To identify these eight studies, we used a directed reference mining approach.…”

“…The eight studies focused on the costs that practices incurred either by (1) becoming a PCMH and/or applying for PCMH recognition or (2) developing and maintaining comprehensive capabilities within the context of PCMH. Two studies estimated the costs of applying for National Committee for Quality Assurance (NCQA) Level 3 medical home recognition (Halladay et al, 2016;Fleming et al, 2017). The remaining studies focused on estimating the costs of developing and maintaining capabilities consistent with the PCMH model (Magill et al, 2015;Martsolf et al, 2016).…”

“…Four studies estimated startup costs associated with adopting comprehensive primary care capabilities (Halladay et al, 2016;Martsolf et al, 2016;Shao et al, 2016;Fleming et al, 2017). The researchers typically conceptualized startup costs as one-time purchases or activities, such as the development of new processes, that were necessary to begin a transformation or intervention.…”

In This Issue: Opiates, Tobacco, Social Determinants of Health, Social Accountability for Non-Profit Hospitals, More on PCMH, and Clinical Topics

“…Fleming et al 7 found substantial costs for individual practices to attain or renew National Committee for Quality Assurance Level III recognition, even when those practices are supported centrally through a large medical group's corporation and with a common electronic health record. The total incremental cost for initial recognition between the corporation and individual practice was estimated at around $43,000 per 5-physician practice.…”

Differences in Diabetes Care With and Without Certification as a Medical Home

“…The most widely used recognition for what constitutes a PCMH is the process established by the National Committee for Quality Assurance (NCQA). [8][9][10][11] Minnesota was one of the first states to implement its own vol-untary certification process for primary care practices in 2010, based on demonstration that a practice met 5 standards (criteria) after thorough review 12 : (1) continuous access and communications with patients and family; (2) an electronically searchable registry to identify care gaps and manage services; (3) care coordination for patient-and family-centered care; (4) care plans that involve patients with chronic or complex conditions; and (5) continuous improvement in patient satisfaction, outcomes, and cost-effectiveness.…”