One of the challenges we have in healthcare IT is figuring out whether different technologies bring an adequate return on investment. This can be particularly challenging when the expenditure falls to one team’s budget (such as information technology) but the cost savings occurs elsewhere (such as the central scheduling department).
Organizations use a variety of cost transfer mechanisms to try to sort this out, but often the calculations fail to fully represent the true work needed to deploy a new solution, especially on the part of the end users. This becomes even more complicated when the solution is a combination of technical tools and operational changes, such as might be required for a practice to advance through recognition as a Patient-Centered Medical Home.
As we move into value-based care, it will be more important for practices to understand the costs and benefits of new models of care. To be honest, many independent practices are not well equipped to try to figure this out. I was excited to see that NCQA has engaged with Milliman’s actuarial team to offer guidance on how practices can calculate return on investment for that type of clinical transformation project.
The NCQA white paper is publicly available, and even if you’re not knee-deep in one of these projects, it provides background for greater understanding of what it takes to re-engineer a practice. The hypothetic practice in the paper represents a 10-physician primary care practice with approximately 20,000 commercially-insured patients. The model concluded that there would be an increase in revenue, although it varied from 2% to 20% depending on payment models.
Although 2% still represents a positive return on investment, I’m not sure how many practices would be willing to embark on wholesale modification of how they do business for that small of a gain. Many practices pursuing Patient-Centered Medical Home recognition do so for other reasons, including the belief that it’s the right thing to do and/or that they will be able to provide better or higher quality care for their patients.
As with any calculation of this kind, NCQA points out that this is a hypothetical practice and our mileage may vary based on the actual characteristics of our practices. To further the effort, Milliman helped develop guidance for practices to develop a pro forma to calculate their own return on investment data. The guidance is clear on the fact that the numbers will vary based on:
- Practice size and location.
- Payer mix and payer models.
- Medical complexity of the patient population.
- Degree of change needed to practice processes, procedures, and reporting to align with PCMH.
- Ability of the practice to meet quality targets.
- PCMH program rules.
I frequently work with practices that are considering whether they will pursue recognition as a Patient-Centered Medical Home. Often, they jump straight to trying to figure out whether their EHR supports PCMH or whether their technology vendor has programs that will make it easier. Some vendors support a subset of PCMH standards but not others – a host of organizations have developed recognition programs, including HCQA, The Joint Commission, the Accreditation Association for Ambulatory Health Care, and the Utilization Review Accreditation Committee, not to mention other homegrown programs developed by practice networks, health systems, and payers. I find that educating practices on the differences between the different programs is a good first step beyond asking whether the EHR can support it. Often the burdens of a particular program will be a deal-breaker for a practice.
Practices must next consider whether they have the capacity to change, which often translates to whether the physicians have the capacity to change. If physicians are employed, this might be mandated by the organization, but in physician partnerships, it can be daunting if some partners want to move forward but others don’t. It doesn’t matter what the return on investment might be if you can’t get everyone on board. I’ve worked with physicians who aren’t able to delegate and don’t trust their support staff, so that makes the idea of team-based care a non-starter.
The white paper does a nice job listing out the costs during both the investment phase, when it is figuring out how to manage the transformation, and during the maintenance phase, when they’re trying to sustain the change. They include the amount attributable to lost physician visits for the clinical champion along with time spent by a PCMH manager, other clinicians who lose time to huddles and quality improvement activities, care coordinators, etc.
In reality, many practices don’t allocate dedicated time for physicians to work on PCMH or other initiatives. Instead, they expect the team to perform these tasks on top of their usual workload, under the guise of “other duties as assigned.” I suppose under that model the return on investment becomes even greater from a purely monetary standpoint, although the job satisfaction element may be on the decline.
It goes on to note that contractual requirements for PCMH recognition are the strongest ways to drive provider behavior. The authors discuss the issue of multiple contracts with differing payers and the need to try to align those requirements in order to work efficiently and to not have to meet multiple PCMH standards. It provides a good list of questions for CEOs and CFOs to consider when contemplating a move to one of these care models.
Overall, I think the white paper provides an excellent tutorial for practices considering a change. There are definitions of key terms and explanations of the process along with the actual guidance for doing the calculations. Whether you’re on the tech side or the patient-facing side, it’s a nice primer to better understand what your organization might be getting into when they start talking about Patient-Centered Medical Home or other care models such as Comprehensive Primary Care Plus (CPC+) or Primary Care First, which are based on PCMH. Knowledge is power and I will definitely be using this tool as a conversation starter when working with practices who want to embark upon clinical transformation.
Has your organization found success under the Patient-Centered Medical Home Model? Leave a comment or email me.
Email Dr. Jayne.