The Cost of Sustaining a Patient-Centered Medical Home: Experience From 2 States

PURPOSE As medical practices transform to patient-centered medical homes (PCMHs), it is important to identify the ongoing costs of maintaining these "advanced primary care" functions. A key required input is personnel effort. This study's objective was to assess direct personnel costs to practices associated with the staffing necessary to deliver PCMH functions as outlined in the National Committee for Quality Assurance Standards. METHODS We developed a PCMH cost dimensions tool to assess costs associated with activities uniquely required to maintain PCMH functions. We interviewed practice managers, nurse supervisors, and medical directors in 20 varied primary care practices in 2 states, guided by the tool. Outcome measures included categories of staff used to perform various PCMH functions, time and personnel costs, and whether practices were delivering PCMH functions. RESULTS Costs per full-time equivalent primary care clinician associated with PCMH functions varied across practices with an average of $7,691 per month in Utah practices and $9,658 in Colorado practices. PCMH incremental costs per encounter were $32.71 in Utah and $36.68 in Colorado. The average estimated cost per member per month for an assumed panel of 2,000 patients was $3.85 in Utah and $4.83 in Colorado. CONCLUSIONS Identifying costs of maintaining PCMH functions will contribute to effective payment reform and to sustainability of transformation. 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.