Study Estimates Costs of Becoming a Patient-Centered Medical Home

AHRQ-funded researchers exploring the costs of becoming a patient-centered medical home (PCMH) estimated that a Texas medical group with 57 primary care practices paid about $2.5 million to secure the designation. PCMHs have shown promise for improving care and reducing costs. The National Committee for Quality Assurance (NCQA) designates PCMHs as those that meet criteria in areas such as team-based care, population management, care coordination and performance measurement. Researchers used surveys and interviews to estimate HealthTexas' NCQA designation costs, which averaged approximately $43,000 per practice. While acknowledging that cost estimates could not be generalized to other medical groups, researchers concluded the benefits of becoming a PCMH should be weighed against mixed evidence regarding impacts on quality and costs of care. Access the abstract of the article, published in the Journal of the American Board of Family Medicine. For more information, access Estimating the Costs of Primary Care Transformation: A Practical Guide and Synthesis Report, an AHRQ report based on the experiences of 15 grantees that sought to understand how much it costs for primary care practices to become PCMHs.

2017 Jul-Aug;30(4):460-471. doi: 10.3122/jabfm.2017.04.170039.

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

Fleming NS1, da Graca B2, Ogola GO2, Culler SD2, Austin J2, McConnell P2, McCorkle R2, Aponte P2, Massey M2, Fullerton C2.

Author information

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.

RESULTS:

We estimated HealthTexas' corporate costs for initial NCQA recognition (2010-2012) at $1,508,503; for renewal (2014-2016), $346,617; the Care Coordination resource costs an additional ongoing $390,790/year. A hypothetical 5-physician HealthTexas practice spent another estimated 239.5 hours ($10,669) obtaining, and 110.5 hours ($4,957) renewing, recognition.

CONCLUSION:

Centralized PCMH support reduces the burden on practices; however, overall time and cost remains substantial, and should be weighed against the mixed evidence regarding PCMH's impact on quality and costs of care.

KEYWORDS:

Health Expenditures; Health Policy; Incentive Reimbursement; Medical Home; Patient-Centered Care; Practice Management; Primary Health Care; Surveys and Questionnaires