The purpose of this study is to document and analyze the costs associated with the transformation of primary care medical group practices from traditional fee-for-service (FFS) illness-oriented health care to patient-centered population health as envisioned by accountable care organizations (ACO) and total-cost-of- care (TCC) programs being initiated by health insurance plans. Two mid-sized physicians owned clinics will be studied: one serving a rural population and the other a suburban clinic serving a mid-level economic population. Both have commercial, Medicare, and Medicaid patients. These clinics have restructured their patient care process with nurse practitioners and physicians working up to the level of their training, developed care coordination programs for high risk patients, provided quality of care and service utilization data for their physicians, initiated patient activation programs (including prescription drug counseling), and are developing electronic chat rooms for patients with chronic illnesses. In addition to providing a unique opportunity to study an extensive transformation of medical group practice care systems that likely portend the future for all medical practices, these two clinics are unique in that they have had electronic health records for at least five years, they routinely provide quality of care data to the Minnesota Community Measurement program, and they collect financial data in a format designed by the Medical Group Management Association. Consequently, we can obtain data that are far beyond what would otherwise be available given the budget constraints. A mixed method set of case studies will be used to document and analyze the costs associated with the transitions in these practices and to evaluate the organizational impact of those changes including barriers encountered and how those challenges were resolved. Quantitative before, during, and after transition costs, quality-of-care, patient satisfaction, and staffing by types and numbers will be obtained from the practice records and reports. The culture of the practice will be assessed to determine the influence of cultural traits on the transition process. These data will be obtained from the physicians and nurses. Finally, qualitative data will be obtained from a series of interviews with the practice administrators and medical directors, other key administrative personnel, and with at least two physicians and two nurses or medical assistants. Both the direct costs of the program development and implementation and the costs of lost revenue and staff turnover will be evaluated. Costs will be deflated to pre-transition dollars to account for charges in payment rates and inflation. Data will be analyzed using comparison ratios and tables. Some of the data, such as the influence of the practice cultural attributes on the degree of acceptance of change by the physicians, will support more sophisticated statistical analysis. The final product of this research will be publications in applied policy and clinical journals anda document that other group practices can use to guide their transition process as health care reform unfolds.

Public Health Relevance

While primary care medical group practices are increasingly recognizing that they need to reorganize how they provide and manage patient care in response to accountable care organization (ACO) and total-cost- of-care (TCC) initiatives, these transitions are limited by the lack of information about the costs associated with the change and the best way to gain physician commitment to implement the program. This research addresses this need for better information by documenting the costs attributed to transitioning two primary care medical group practices from traditional fee-for-service (FFS) clinics to patient-centered TCC using in-depth case study methods. The organizational factors influencing the transition process and the direct and indirect costs of the transition will be documented and analyzed along with the influence on patient level costs and quality of care.

National Institute of Health (NIH)
Agency for Healthcare Research and Quality (AHRQ)
Small Research Grants (R03)
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Special Emphasis Panel (ZHS1-HSR-O (01))
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Mcnellis, Robert
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Medica Research Institute
United States
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