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Medical practices delivering PCMH functions face substantial costs

An analysis of practices in two states found significant costs associated with delivering patient-centered medical home functions, according to data published in the Annals of Family Medicine.

Researchers assessed costs involved in maintaining patient-centered medical home (PCMH) functions to provide data on the direct costs to medical practices.

"Identifying costs of maintaining PCMH functions will contribute to effective payment reform and to sustainability of transformation," Michael K. Magill, MD, professor at the department of family and preventive medicine at the University of Utah School of Medicine, and colleagues wrote. "Maintenance and ongoing support of PCMH functions require additional time and new skills, which may be provided by existing staff, additional staff, or both. Adequate compensation for ongoing and substantial incremental costs is critical for practices to sustain PCMH functions."

The researchers developed a PCMH cost dimensions tool based on the National Committee for Quality Assurance PCMH 2011 standards. The tool was provided to the clinic manager and physician or medical home lead in each of the 20 practices evaluated in the study. Authors and research assistants followed up with interviews to complete the tool and confirm responses.

Results showed the average total costs for each full-time equivalent (FTE) physician per month were $9,658 in Colorado and $7,691 in Utah. Average PCMH costs per encounter were $36.68 in Colorado and $32.71 in Utah. Magill and colleagues also said that, assuming a size of 2,000 patients per FTE physician, estimated per member per month costs were $4.83 for Colorado and $3.85 for Utah.

Additionally, the researchers noted that Utah practices reported more medical assistants and fewer physician assistants and nurse practitioners than Colorado practices.

"There are substantial costs associated with the delivery of PCMH functions," Magill and colleagues wrote. "We found that the costs of delivering these functions, most of which are not reimbursable in a [fee-for-service] environment, are approximately $105,000 per FTE clinician annually. Payment reform to offset the marginal costs of PCMH is essential for primary care practices to sustain medical home services." – by Chelsea Frajerman Pardes

Disclosure: The researchers report no relevant financial disclosures.