Background: The patient-centered medical home (PCMH) is a promising model to achieve the """"""""triple aim"""""""" of improving patients'experience of care, improving population health, and reducing per capita health care costs. Insurance companies are encouraging primary care practices to transform to PCMHs through financial incentives or direct contractual requirements. Practices considering the PCMH transformation and recognition process need information regarding the costs they will incur, to weigh these against the anticipated benefits for patient outcomes and the available financial incentives and make a fully informed decision. Objective: To quantify the time, effort, capital, and total direct and indirect costs associated with primary care practices'transformation to and sustained recognition as PCMHs, based on the experience of 60 primary care practices within HealthTexas Provider Network (HTPN), a large ambulatory care medical group practice affiliated with the Baylor Health Care System (BHCS) in North Texas. The practices obtained PCMH recognition from the National Committee for Quality Assurance (NCQA) in 2010-2011.
Aims :
Aim 1 : To estimate the costs of a primary care practice's initial PCMH transformation and application for formal recognition under the 2008 NCQA criteria.
Aim 2 : To estimate the costs of renewing PCMH recognition under the 2011 NCQA criteria for a PCMH initially recognized under the 2008 criteria Methods: Structured interviews will be conducted to obtain data related to: 1) time and effort of activities related to PCMH transformation and application for NCQA recognition;2) additional infrastructure or equipment purchased related to transformation and application for NCQA recognition;and 3) the extent to which practice staff would have been engaged in revenue-generating activities during the time spent on transformation and application activities. Corporate resource leaders, and physicians, midlevel providers, medical assistants, and office managers from a representative sample of 6 HTPN primary care practices will be interviewed. Direct costs will be estimated based on: 1) the time and effort for activities by job category multiplied by the average hourly rate for that job category in the payroll system;and 2) observed expenditures in the general ledger or other financial sources. For physicians, the average wage will be estimated using the reimbursements collected for an average office visit minus non-physician practice expenses, converted to an hourly wage figure, based on data from individual practice records. Indirect costs for the practices will be estimated based on the time and effort of individuals multiplied by the average reimbursements earned by the practice for an average office visit and the individual's percentage of effort going toward reimbursable activities. Significance: Results from the proposed study will inform primary care providers'decisions to invest practice resources in PCMH transformation. Results will also be useful in determining the size and structure of the financial incentives that need to be offered to primary care practices to encourage PCMH transformation.

Public Health Relevance

The patient-centered medical home (PCMH) is a promising model for improving the quality of care patients receive while also reducing waste in the health care system, by improving the coordination of care. Primary care practices are being encouraged to transform to PCMHs through financial incentives and/or direct contract requirements from insurance companies. However, little information is available regarding the time, effort, and monetary outlays required to successfully transform a practice to a PCMH and to obtain recognition as such. Furthermore, it is not known what costs a practice will incur to maintain its PCMH status when the criteria change between the time it was initially recognized and the time when it comes due for renewal. This study will provide data addressing both these questions, based on the experience of the 60 primary care practices in a large medical group practice in North Texas. These practices initially received recognition from the National Committee for Quality Assurance (NCQA) under the 2008 criteria and are now coming due for renewal under the 2011 criteria. These data will have an important impact on health care delivery as they will enable primary care providers to weigh the costs of PCMH transformation against the anticipated benefits for patient clinical outcomes, practice financial outcomes, and the financial incentives available for recognized PCMHs. This will enable them to make informed decisions about how best to invest their resources to provide patients with the highest quality care possible. Study data will also be useful to government and private health care payors seeking to understand the business case for financial incentives to encourage PCMH transformation, and to structure and design these incentives to maximize success.

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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Baylor Research Institute
United States
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