Patient Centered Medical Home (PCMH)Cost of Sustaining and Transforming

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The patient centered medical home (PCMH) is an important model of care that is focused on improving population health through the primary care setting. While there is evidence on the activities needed to transform a practice into a PCMH, previous research into this new model of care has not focused on cost as an obstacle to transformation. In particular, cost is a barrier for smaller practices that do not have the economies of scale or capital to invest in practice transformation. However, smaller practices serve a large number of patients in the primary care setting. Thus, determining the cost of practice transformation, and allowing small practices to estimate these costs upfront, are critical steps in diffusing the PCMH model. This project has two objectives. Our first aim is to estimate the cost of transforming a small primary care practice into a patient centered medical home. Our second aim is to create a structured tool to provide practices with a way of estimating the costs of transforming themselves into a patient centered medical home. We will utilize the experiences of practices that have already made this transformation in order to achieve these two aims. The practices we analyze are all in southeastern Pennsylvania, and all had some incentives to transform into PCMH. We will supplement the experience of the study population with the experience of a large, academic practice that has transformed itself into a patient centered medical home. Our main deliverables will be a report on the costs of practice transformation and a structured tool describing the activities that practices will want to include in prospective cost analyses. Our cost report will analyze cost on financial bases currently used by practices for financial management. Our tool will take the process that we use to collect cost information, and turn it into a standardized process that other practices can use. We will combine this tool with documentation on how it can be used. The long-term goals related to our project are to transform primary care into a more patient centered activity, and to do so in a cost effective way. Our project will help us reach these goals in three ways. First, it will provide small primary care practices with a range of costs that they can use when assessing the possibility of practice transformation. Second, it will give them a tool based around specific activities that they can use to estimate these costs for their own practices. Third, it will serve as a pilot study, setting up the groundwork for a larger study of the costs of primary care transformation that would answer broader questions about cost effectiveness and the effect of to the health system. These goals are aligned with the overall goal of AHRQ, which is to improve the quality, safety, efficiency, and effectiveness of health care for all Americans. This research will support diffusion of the patient centered medical home, which is a model designed to improve health care. This research is also aligned with the Center for Primary Care with in AHRQ, as it expands the knowledge base for clinical providers and patients and to assure the translation of new knowledge and systems improvement into primary care practice.