A new article published in the Annals of Family Medicine estimates ongoing PCMH costs to be approximately $105,000 per physician FTE per year, in personnel costs only. Data was collected through interviews and staff surveys at 20 primary care practices, 8 owned by an academic institution in Utah, 7 private practices and 5 sites of a Federally Qualified Health Center (FQHC) in Colorado. Only the Colorado practices were recognized by NCQA, while the Utah practices had their own proprietary definition of PCMH. The authors reached their shock and awe inducing figure by adding self-reported increases in time spent by staff on each task listed in the NCQA PCMH 2011 Standards, and then priced this incremental effort based on staff compensation.
Unfortunately, the cost of individual PCMH Elements and Factors is not available, but even in aggregate form, the analysis is perplexing. The average $105,000 per physician per year is not an absolute number. It is the incremental difference, according to the authors, between running a “traditional high-performing” practice and running a PCMH practice. As such, the dollar amounts depend on how one defines the baseline. The article does not provide an exact definition for the “traditional high-performing” primary care practice baseline and this is obviously problematic. The authors mention that not all PCMH Elements were fully implemented in the surveyed practices, but an exact list of implemented functions is not available either.
Basically, we don’t know what the starting point was, and we don’t know what the end point is, but we are told that it takes an outlandish $105,000 worth of work to get from the former to the latter. Outlandish, because any independent solo practice faced with half of those costs would go bankrupt in six months or less, and in spite of that, there are many solo practices recognized by NCQA at the highest possible PCMH level, which is more than the practices in this study have accomplished. Here is a riddle for you: how does a micro practice, with one physician and no staff, sustain the highest levels of PCMH operations when according to this study, one would need to add approximately 2 FTEs to the traditional model?
The answer is that the lump sums presented in this article are meaningless. For example, the highest incremental expenditure for the studied practices, to the tune of $3,000 per physician per month, was attributed to NCQA Standard 3, which deals with providing medical care to patients. There are several items selectively listed by the authors in the description of Standard 3, so let’s assume that those are the tasks that generated incremental effort and costs. The first task on the list is the notorious daily huddle. This is most certainly a new PCMH construct that wasn’t there before. However, would the daily 5 or 10 minutes spent on huddles in a PCMH, not be spent on the same exact tasks peppered throughout the day in a traditional practice? Did the study account for such considerations? We don’t know.
Another item listed for this Standard is implementation of evidence-based guidelines. What does this even mean? Should we presume that traditional high-performing practices are not practicing evidence-based medicine? Were they using magic 8-balls to diagnose and treat patients prior to PCMH implementation? The same can be said for multiple other items, such as medications reconciliation or monitoring patients on high-risk medications or making sure that lab orders are resulted at some point, and a host of other tasks routinely performed in any practice, although in different form and perhaps in a more ad-hoc fashion. Of course, we can only speculate here, since the details behind the $105,000 figure are not available, but these seem to be typical examples of the rampant misconceptions regarding the meaning of PCMH operations.
What sets the NCQA PCMH initiative apart from your run of the mill data collection and reporting programs, such as Meaningful Use, PQRS and even ACO, is that it provides a holistic framework for improving practice operations without being narrowly prescriptive on how to accomplish that. It is a comprehensive tool for the practice to examine its inner workings once every three years and brainstorm on ways to improve its processes. There is nothing in the NCQA PCMH framework that does not occur or should not occur in a modern “high-performing” practice. With the exception of some Meaningful Use measures, I would challenge anyone to point out to even one PCMH factor that cannot, or should not, be implemented in a way that benefits patients and the practice itself. And it all starts with the initial recognition process.
Much has been written about the trials and tribulations of obtaining NCQA PCMH recognition, from the extensive documentation requirements to the onerous costs of labor and expertise. There are two approaches to PCMH recognition that generate these types of complaints, and later on may generate the theoretical $105,000 costs. One approach common in large institutions is to view PCMH as a top down initiative managed and executed by a central office, with little or no input from practice staff, including physicians. The other extreme is the small practice chugging through each PCMH factor, trying its best to generate mountains of screenshots and reports with no particular strategy in mind other than getting enough points to pass the “test”. Both models may get you PCMH recognition, but with much frustration and zero benefits to the practice.
And then there is the right way, which harnesses the PCMH recognition process to benefit the practice and its patients. Forget about “readiness assessments” and “culture change” indoctrination. You were ready and fairly well cultured the day you finished residency. The question you should ask yourself is not whether we do this or that thing, but whether we are doing it well. You may have some pink colored slot on your schedule called same day appointment, but is it where it should be? Is it solving a problem, or is it creating one, or is it there for decoration purposes only? How are you planning to stop the upcoming hemorrhage of patients to non-descript retail clinics and iPhone “doctors”? Should you maybe use this opportunity to revisit your 10 years old scheduling process? This is not about NCQA. This is about dollars and cents for your practice.
How about “implementing evidence-based guidelines”? Should you be deeply offended because someone dares to ask you to implement clinical practice guidelines for a sore throat? Or should you look at this as an opportunity to write some standing orders for your staff, so that you don’t have to go in an out that exam room more than once, and maybe, just maybe, you can squeeze in a couple more minutes with your little patient, and notice that mom seems to be unusually worried and distracted? And maybe you'd want to ask her about it. And maybe that’s what “patient-centered” is all about. And maybe all the administrative PCMH stuff you do, should be purpose built by you to make this possible. And maybe this is not about recognition, but about creating a safe little space where you can be the doctor you always wanted to be.
We don’t know how the PCMH was implemented in the study. We just know that it was implemented to a certain degree. We don’t know if the missing pieces are minute or crucial for practice financial health and patient care. We don’t know if the physicians in these practices were given the opportunity to build their own medical home, or if someone else decided how to shuffle the deck chairs. We don’t know if the subjective incremental effort reported by staff on each factor was offset by reduced effort elsewhere, or if it represents better use of previously underutilized positions. We have no objective numbers for “before and after” payroll expenditures, although those should be rather easy to obtain for large facilities. There is more than enough missing and undisclosed data in this study to render the $105,000 suspect.
Are there ongoing costs for a PCMH practice? No doubt, there are plenty, but these costs are no different than the costs of running a traditional (or non-traditional) high-performing practice, because PCMH is just another name for high-performing practice. Perhaps the most useful conclusion from this paper is that high quality primary care costs more than mediocre or outright irresponsible primary care, and those who decide how much primary care doctors get paid, should bring this largely self-evident fact into account, when defining physician fee schedules and future payment schemes.
[Disclosure: I am the founder of BizMed, a company whose mission is to support the viability of independent medical practice, and to that end it offers free software and tools to reduce administrative complexity in private practice in general, and for PCMH recognition in particular]
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