PCMH and Operating Costs

The model of care known as the patient-centered medical home (PCMH) is characterized by comprehensive primary care, improvement in quality of care, care management, and improved access to care in a patient-centered environment. Early studies have shown benefits to PCMHs, including improved clinical and organizational outcomes.

Studies on the costs associated with PCMHs have focused on potential savings resulting from a reduction in hospitalization rates and visits to emergency departments. According to researchers, these cost savings accrue to payers and do not have an effect on the finances of the primary care provider. To date, there has been only 1 study designed to estimate the cost effect of the PCMH from the perspective of the primary care provider.

Researchers recently conducted a cross-sectional study of PCMH rating and operating cost in 2009 to determine whether PCMH rating is associated with operating cost among health centers funded by the US Health Resources and Services Administration. They reported the results online in the Journal of the American Medical Association [doi:10.1001/jama.2012.7048].

The researchers noted that the terms health center and grantee refer to organizations that receive grants under the Health Center Programs as authorized under section 330 of the Public Health Service Act, as amended.

Data on PCMH rating were obtained from a national survey of health center administrators conducted by Harris Interactive, on behalf of the Commonwealth Fund. Surveys were sent to executive directors of all health center program grantees with at least 1 community-based primary care site. For grantees with >1 site, the survey asked respondents to provide answers that reflected their largest site.

The survey provided scores from worst to best (0 to 100, respectively) for total PCMH score as well as 6 subscale scores: (1) access/communication; (2) care management; (3) external coordination; (4) patient tracking; (5) test/referral tracking; and (6) quality improvement.

The researchers utilized data from the 2009 Uniform Data System to determine health center cost. This system is a database of information on all health centers funded by the US Health Resources and Services Administration’s Bureau of Primary Health Care. For this analysis, the researchers used 3 cost outcome variables common in healthcare finance: (1) operating cost per physician full-time equivalent; (2) operating cost per patient per month (PPPM); and (3) medical cost per medical visit.

After applying inclusion and exclusion criteria, the analysis included 669 health centers. The mean total PCMH score was 60. The lowest score was 21 and the highest was 90. The mean operating cost per full-time equivalent physician was $1509; mean operating cost PPPM was $51.23; mean medical cost per medical visit was $136.70.

In multivariate models using total PCMH score as the medical home measure, higher total PCMH score was associated with higher operating cost PPPM (P<.001). For the average health center, a total score 10 points higher than the mean was associated with an increase of $2.26 in operating cost PPPM.

In analyses of the subscale scores, a 10-point higher score was associated with a higher operating cost per physician full-time equivalent for patient tracking and quality improvement, and higher operating cost PPPM for patient tracking and quality improvement. A 10-point higher PCMH score was associated with lower operating cost per physician full-time equivalent for access/communication.

In conclusion, the researchers said, “Strong quantitative documentation of the actual practice cost of higher PCMH rating could provide the basis for evidence-based financial incentive structures that would be useful as the healthcare system moves toward more integrated care models such as the accountable care organization. It will only be through effective design and implementation of such financial mechanisms that the PCMH can be sustained,” they added.