A new analysis of federally qualified health centers (FQHCs) published online June 24 in the Journal of the American Medical Association found clinics with higher scores as medical homes also had higher per-patient operating costs.
"We're not saying that the medical home costs too much and we can't do it," said lead author Robert Nocon, MHS, senior health services researcher at the University of Chicago Medicine. "Primary care providers today are being asked to implement a model and improve care in a way that will hopefully benefit patients and hopefully have a lot of good downstream impacts, but in a way that doesn't have downstream financial benefits for them. Instead, we need to build a system that promotes the care that we want to happen."
Patient-centered medical homes (PCMHs) are clinics that seek to provide access to comprehensive, high-quality primary care and case management. Research has shown that shifting patient care to these clinics can decrease healthcare spending by reducing hospitalizations and inappropriate emergency department use.
However, in the current system, most physicians will not benefit from these savings, according to the authors. Indeed, the new analysis suggests that many practices will incur additional expenses for turning a clinic into a true PCMH through spending on additional personnel, technology such as EHRs and quality improvement measures. The authors concluded that financial incentives must be designed to ensure that the PCMH model can be sustained.
The study rated 669 health centers on a 100-point "Safety Net Medical Home Scale" based on the results of a survey assessing PCMH features such as access/communication, patient tracking and quality improvement. For example, the scale measures whether patients can contact their clinician on a timely basis or the providers' ability to secure outside referrals for their patients. Those ratings were then correlated with health center costs using a database maintained by the Health Resources and Services Administration's Bureau of Primary Health Care.
The analysis found that the mean operating cost per patient per month for the clinics was $51.23. The cost of improving 10 points on the PCMH scale—an "operationally meaningful" difference, the authors wrote—would be an additional $2.26 per patient per month for an average health center. For the average patient population per clinic of 18,753 patients, that translates to more than $500,000 in additional costs annually.
While significant, the additional costs of transforming clinics into PCMHs are far outweighed by potential healthcare savings, the authors asserted. A 2010 study of an integrated delivery system utilizing PCMHs found savings of $18 per patient per month from reduced hospitalization and emergency department use.
However, for the majority of the U.S. healthcare system, the financial beneficiaries of increased PCMH utilization are separate from the primary care providers who bear the burden of additional costs.
Some of the models being tested by the Center for Medicare and Medicaid Innovation may remedy this disconnect between the savings and costs of implementing PCMHs, the authors mentioned. “Accountable care organizations, entities that provide both primary and specialty care for their patient population, can bring these costs and savings together under a single budget.
"Another example, the Federally Qualified Health Center Advanced Primary Care Practice Demonstration, pays health centers $6 per Medicare beneficiary per month to implement the PCMH model. Policy changes, such as increasing reimbursement rates for primary care in a PCMH clinic, also would help relieve the financial burden for providers.”
Additional research is required to assess the value of a higher PCMH rating—measuring whether the additional features and costs translate into better health outcomes for patients of these clinics. Other factors besides cost also may influence a clinic's ability to function as a PCMH, including size, geography and financial incentives for practice improvement, the authors concluded.