How much does it cost to become a Patient-Centered Medical Home?

A new study by researchers from the University of North Carolina Chapel Hill, Department of Family Medicine and the UNC Gillings School of Public Health Department of Health Policy and Management report the results from one of 15 AHRQ Estimating Costs grants.

This study reports the results from interviews of practice staff. The interviews focused on the costs to prepare the application to become a Patient-Centered Medical Home (PCMH). “The Cost to Successfully Apply for Level 3 Medical Home Recognition” was published in the January-February 2016 issue of the Journal of the American Board of Family Medicine (JABFM).

Jacquie Halladay said, “We are glad to share these results and continue to be encouraged by our colleagues to highlight the practice level costs involved in implementing practice change.”

This study used activity-based costing techniques. Activity-based costing focuses on how long an activity took and who did the work. The practices interviewed that obtained PCMH under the 2011 standards had a mean cost of $13,700 per provider. This result was remarkably consist across the practices which had from 2.5 to 10.5 providers.

The authors note, “our participants acknowledged that several of the newly implemented activities were critical to improving care quality and were thankful that the application process drove their organizations to understand the need to dedicate time and resources to make these advancements”

Valuable activates reported were those that:

• provided enhanced care management services to patients
• “closed the loops” on communications within and between practices
• supported the implementation of evidenced-based care protocols
• engaged patients and families in improving the patient experience

Our participants noted that in North Carolina there were economic incentives from the dominant commercial insurer. These incentives were part of the decision to take the journey to becoming a PCMH. Successful transformation requires significant investments of time and resources. Incentives to support the improvement of care are vital to support changes in primary care.

Dr Halladay added, “We think this kind of work is particularly relevant given the increasing attention on value based purchasing and population management.”

This study made several recommendations regarding the process.

• Streamline the process of documenting each objective while complying with HIPAA regulations.
• Provide modifiable templates for policy documents and job descriptions.

The authors are indebted to practices that are part of the North Carolina Network Consortium for their continued interest and participation in research and quality improvement. This work was supported by the Agency for Healthcare Research and Quality.