Hospital leaders can make the business case for patient-centered medical homes (PCMH) by using recent research from the National Committee for Quality Assurance (NCQA) in Washington, DC.
NCQA reports that PCMH can increase annual revenue — and perhaps a great deal, depending on the payment model. Improvement measures are dependent on a practice’s patient population.1
Milliman prepared the report for NCQA, aiming to help health systems that might be interested in leveraging PCMH to improve quality and reduce costs, says Michael Barr, MD, executive vice president of the NCQA Quality Measurement and Research Group. Payers increasingly are interested in value-based care, and PCMH can be an effective approach, he argues.
“The challenge to date has been that there are so many different models of reimbursement and delivery. The PCMH model is not a one-size-fits-all option,” Barr says. “The question has been how a hospital leader can assess these different options and determine what makes the most sense for their organization. We wanted to look at hypothetical scenarios for how PCMH would affect a practice. The hospital leaders can take that information to make their case.”
The NCQA Patient-Centered Medical Home Recognition program requires practice management processes and patient care quality metrics that address both high-cost chronic care patients and overall patient satisfaction. Currently, about 13,000 primary care physician practices have NCQA recognition.2
Milliman studied several models of PCMH, including the costs of implementing it and the potential benefits. “They found that in all of the different models, there would be an increase in revenue of between 2% and 20% for a hypothetical practice of 10 primary care clinicians and 20,000 unique commercial members,” Barr reports. “In the early days of the PCMH efforts, there was great interest by large employers, health plans, and payers, and they offered incentives to keep it going. Some of those incentives are still around, but this paper shows that even in the absence of those incentives, practices should look closely at this model.”
The report authors note that, aside from being “the right thing to do” for primary care, the PCMH model “provided organizations a clear ‘roadmap’ for primary care transformation. PCMH recognition was particularly helpful for those organizations that had less experience with the concepts of this advanced primary care model prior to recognition.”1
The research should be useful in understanding the potential financial benefits from PCMH, Barr says, which will be helpful for quality professionals who support the approach because of the benefits to patient care. “If a health system is thinking about using a program that has been well studied to help improve the delivery of primary care, this model has not only been shown to improve quality but now we’re seeing in these various models that you can see an increase in revenue above and beyond the cost of implementation,” Barr says. “I see significant growth opportunities for primary care and transforming the way primary care is delivered.”