Good news and bad news: The cost of (partial) Patient-Centered Medical Home implementation

Nov. 11, 2015 / By L. Gordon Moore, MD

Magill and colleagues published a nice analysis of the staffing costs of a Patient-Centered Medical Home (PCMH). Compared to a regular practice that already has an electronic medical record, they looked at the incremental costs associated with meeting NCQA standards for Patient-Centered Medical Home recognition.

The investigators reported incremental costs in three ways:

  • $105,000 per full time primary care physician
  • $3.85-$4.83 PMPM
  • $32.71-$36.68 per encounter

The good news is that these costs are consistent with those found in other studies of PCMH implementation.i

The bad news:

  1. Practices in the study had only partial implementation of PCMH standards, and
  2. Not all PCMH implementation leads to improved population outcomes and reduced costs that might fund the ongoing work.ii

This study can inform policy around population health management. Programs interested in primary care transformation as a means to the Triple Aim might consider $3.85-$4.83 PMPM as a minimum threshold of support, in addition to the costs of administering the program.

There is more good news: Blue Cross Blue Shield of Louisiana announced savings of $25 PMPM for their Quality Blue Primary Care program. According to the external validation of results, these savings are net of program costs. Savings like this make it possible to fund the programs to support transformed care delivery.

L. Gordon Moore, MD, is senior medical director for populations and payment solutions at 3M Health Information Systems.

Documentation compliance tools. Applied to helping physicians focus on what’s important: patient care.  

i Patel, Mitesh S., Martin J. Arron, Thomas A. Sinsky, Eric H. Green, David W. Baker, Judith L. Bowen, and Susan Day. “Estimating the Staffing Infrastructure for a Patient-Centered Medical Home.” The American Journal of Managed Care 19, no. 6 (June 2013): 509–16.

ii Cole, Evan S., Claudia Campbell, Mark L. Diana, Larry Webber, and Richard Culbertson. “Patient-Centered Medical Homes In Louisiana Had Minimal Impact On Medicaid Population’s Use Of Acute Care And Costs.” Health Affairs 34, no. 1 (January 1, 2015): 87–94. doi:10.1377/hlthaff.2014.0582.