Cost of Sustaining a Patient Centered Medical Home Michael K Magill, M.D.; David Ehrenberger, M.D.; Debra L Scammon, Ph.D.; Julie Day, M.D.; Lisa H Gren, Ph.D; Jaewhan Kim, Ph.D.; Rhonda Sides, CPA Thank you to Andreu Reall, MBA/MHA (cand.), and Tatiana Allen, CCRP for assistance with data collection and analysis This project was supported by grant number 1R03HS22620 from the Agency for Healthcare Research and Quality. The content is solely the responsibility of the authors and does not necessarily represent the official views of the Agency for Healthcare Research and Quality

Practices are transforming to Patient Centered Medical Homes (PCMHs), making it important to identify ongoing costs to maintain the new services provided

“The Triple Aim” Improve Health Improve Experience

To understand the cost structure associated with on-going maintenance of PCMH services in small- and medium-sized primary care practices. Study Aim

Study Groups Colorado 8 Multispecialty Primary Care Practices Utah 5 FQHCs 7 Family Practices

Methodology Design:Mixed methods case series Setting:Primary care practices differ by: »NCQA PCMH Recognition »Ownership »Payer mix »Patient demographics and health status Interviews:Practice and network leadership Outcomes:Multiple Measures »Time »Personnel costs »Staffing

Four study stages 1.Develop PCMH Cost Tool 2. Collect data (facilitated) 3. Analyze data 4.Disseminate lessons learned

Practice Characteristics

Medical Home Models FeatureNCQA PCMH 2011Care by Design TM Experience Access and Continuity Plan & Manage Care Self Care Support Measure & Improve Performance Appropriate Access Care Team Planned Care Health Manage Populations Appropriate Access Care Team Planned Care Cost Track/Coordinate Care Appropriate Access Care Team Planned Care

PCMH Cost Dimensions Tool Modeled on NCQA PCMH Standards Identifies specific ongoing costs associated with each of the NCQA PCMH dimensions Resources and systems not found in traditional, high performing primary care practices

Basic Primary Care and EMR Functions Not Included in PCMH Cost Data Tool Culturally and Linguistically Appropriate Services Electronic system for Patient Information Electronic system for Structured Clinical Data Comprehensive Health Assessment Use of Electronic Prescribing

PCMH Cost Dimensions Tool Pilot tested at 3 NCQA PCMH Level III practices Three views: – Costs (line item) – Staffing – PCMH Functions

PCMH Worksheet #1: Cost

Worksheet #2: Staff

Worksheet #3: PCMH Function

The Data

*new practice outlier excluded from UT mean cost per encounter

*PMPM normalized to 2000 panel

Data not adjusted for: Consumer Price Index Practice Characteristics Patient Population

Rank Order Standards (w/ highest cost Elements) Cost/FTE Provider per month 13. Plan and Manage Care $2,943 Pre-visit planning/huddles, care management, medication reconciliation 21. Enhance Access and Continuity $2,340 After hours, same day access, urgent care 35. Track and Coordinate Care $1,222 Referral and test tracking, follow-up, care/transitions coordination 46. Measure and Improve Performance $916 Measure, report performance (chronic, acute, util); implement CQI, MFI 54. Provide Self Care Support and Community Resources $848 Support self care processes (self management, activation, education) 62. ID and Manage Populations $470 Comp health assess, proactive outreach, data/registries for pop mnmt

Total Cost per Provider/Year = $104,866

Limitations Qualitative assessment of PCMH functions Study practices have spectrum of PCMH functionality; none is the “idealized PCMH office practice” The marginal costs of PCMH maintenance do not define the business case (change management, ROI) Estimated panel size: –2000 patients/FTE physician Not addressed: –Cost of implementation –Opportunity costs –Outcomes: ROI, quality, satisfaction

Main Findings Marginal costs to maintain PCMH are consistent across various practice settings: ~$35/encounter, ~$100,000/yr/FTE clinician Modest “management fees” (~$4 PMPM covering an entire panel) roughly offset most marginal costs This study’s cost data do not reflect the cost of full PCMH implementation or those of future PCMH constructs (2014 and beyond)

Conclusions PCMH functions require –additional time from existing staff –addition of personnel with new and broader responsibilities This results in substantial costs that are unsustainable in current fee-for-service environment Therefore … Payment reform to offset marginal costs of PCMH maintenance is critical for primary care practices to sustain medical home services.

Future research should examine… Costs of PCMH relative to associated revenue and opportunity costs The relationship of PCMH costs to quality, total cost of care, provider, staff, and patient experience Cost variation by practice type and by staffing model to identify the most efficient practice model(s)

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