Surprise, Surprise: The Patient Centered Medical Home Costs Money!

Alt for Norge!

The Disease Management Care Blog is decamping to Norway for a meet-the-family and see-the-sights vacation.  The good news is that Europe is 8 hours ahead, which means the DMCB will know about the Supreme's Thursday decision 8 hours before anyone else.  The bad news is that in the coming days, its posts will become infrequent at best.

In the meantime, check out this just-published JAMA article on the PCMH. 669 primary care centers participated in a Harris survey commissioned by the Commonwealth Fund.  While the "Safety Net Medical Home Scale" was not based on the NCQA, it inquired about the familiar care domains.  The 0 to 100 scale was correlated with financial data from the Uniform Data System reports that reflected the clinics' operating costs.

Unsurprisingly, the authors found that as the medical home score increased, so did the operating costs. Moving from 60 points to 70 points increased the cost per patient per month by $2.26.  While the authors calculated that translated into more than half a million dollars of additional expense for the average clinic, the DMCB notes that kind of expense for an average physician panel of 1500 patients means more than $40,000 per year.

Readers familiar with the cost of disease and population health management will find that $2.26 PMPM statistic very significant because that's in the range of what is charged by many vendors.  What's more, the vendors' charges include a profit margin which was not necessarily included in the clinic's study data.

Conclusions?

The PCMH is not necessarily "cheaper" than outsourced care management.

While the PCMH may (statistically significant proof remains elusive) "save money," it appears they have the same challenge faced by the disease management industry in the early days: savings net of fees doesn't necessarily equal profit or a financial gain for the health insurer or consumer.