Optimizing Care: Transitioning to a Patient Centered Medical Home

This issue of IMA Insights explores the benefits and challenges of patient centered medical home pursuit for hospitals and health systems in the age of accountable care organizations. 
United States (US) per capita healthcare expenditures continue to rise. Despite the investment, 50% of US citizens do not undergo the recommended preventive care, 87% receive inadequate healthcare counseling, and 30% report being unable to obtain an appointment the same day or the next day when ill. Healthcare leaders and legislators recognize that correcting these deficits requires that primary care providers (PCPs) assume a pivotal role in optimizing care while managing cost.

A 2012 HealthLeaders Media survey reported that 19% of responding hospital leaders identified an anticipated growth in primary care of greater than 6%, with 39% predicting growth between 1% and 5%. Movement towards accountable care organizations (ACOs) contributes to this perception of potential growth. Successful ACOs require effective care coordination by primary care practices. These perspectives suggest that health system and physician practice executives must embrace new partnerships and care delivery models. A patient centered medical home (PCMH) provides one viable care delivery approach.

In 2007, four physician organizations developed the Joint Principles of the Patient Centered Medical Home. These professional groups identified key PCMH components as accessible, coordinated, integrated care delivered by a physician-led team with a whole-person focus on a foundation of quality and safety. The principles underline the need for payment reform. Subsequently, 18 additional physician organizations endorsed those components. Recently, demonstration projects based on the Accountable Care Act (ACA) and the Center for Medicare and Medicaid Innovation integrated the PCMH concept into primary care practices and ACOs.

More than 60 PCMH demonstration projects exist in approximately one-half of the states and include all major insurers. Insurance carriers recognize PCMH participation with enhanced reimbursement. Some carriers require that practices attain The National Committee for Quality Assurance (NCQA) designation to receive the incremental reimbursement.

While early in their evolution, PCMHs demonstrate positive results. In one analysis, inpatient admission reductions ranged from 5% to 40%, while emergency department visits decreased up to 24%.While PCMHs require incremental practice expense, significant cost avoidance in the partner acute-care institutions may offset these added costs, providing further impetus for integration between health systems and physician practices into ACOs.
Pursuit of PCMH designation or participation in a demonstration project seems reasonable. Undertaking the journey requires preparation, commitment, and patience. Leaders' understanding of the following challenges promotes greater engagement and smoothes the transition to a successful PCMH.

Time Investment

The developmental journey to PCMH requires paradigm shifts. It dictates significant clinical and operational restructuring and entails both incremental change and major process realignment. Depending on the state of practice evolution, its pursuit of PCMH status may necessitate changes in access, medical record, telephone, assessment, tracking, education, consultation, and general care processes. The change magnitude proves challenging and time-intensive. Even the most mature practices experience change fatigue during the transition to a PCMH.

Strengthening practice infrastructure to meet PCMH standards requires time. Effective PCMH implementation requires strong infrastructure in the following key areas: leader engagement, manager acumen, care coordination across the continuum, commitment to quality improvement, and utilization of evidence-based medicine. In addition, PCMHs must integrate with community resources including those specific to mental health and substance abuse.

Information Technology (IT) Capabilities

PCMHs require robust information systems and electronic health records. IT system capabilities need to include: 

In addition to tracking and monitoring capabilities, IT systems must support:

PCMH transition requires engaged physician and organization leaders. Physician leadership and health system administration must embrace the concept and commit financially to practice transformation. Leadership visibility and presence, along with frequent, participative communication prove essential.  

Practice transformation requires physician leadership. Evolution to team based care models prove challenging to practicing physicians who are by nature independent, critical thinkers. Successful PCMHs maximize the contributions of all practice staff and ensure that each member performs to the level allowed by their license, certification, and training. Many providers resist ceding this level of control.

Financial Implications

Participating insurers recognize PCMH practices with augmented reimbursement. Review of 4,707 PCMHs, identified an annual median increase per provider of approximately $23,000 in reimbursement. Reported per-member-per-month (PMPM) payments range from $1.00 PMPM to more than $10.00 PMPM. However, some analyses suggest that associated PCMH expenses require a $16.00 PMPM reimbursement. In addition, providers receive fee-for-service payments and other incentives based on quality or financial outcomes.

PCMH transition requires incremental capital and operating expense including IT upgrades, infrastructure change, augmented staffing, and staff training. Approximately 52% of practices add full-time equivalent (FTE) staff, with smaller practices increasing staff complements more than large practices when based on staff FTEs per provider FTE.

Moving to a PCMH represents a major transformation for physician practices and will position those who make the transition effectively for future success in the ACO era. Ensure a smooth transition by planning comprehensively, understanding revenue and expense implications, maximizing IT capabilities, and re-engaging leaders, physicians, and staff.

Develop a realistic transition plan and timeline

Effective change requires time and exquisite planning. For most practices, transitioning to a PCMH necessitates substantial adjustments to time-worn processes. Critically appraise required process changes. When developing the timeline, be sure to incorporate health system initiatives in which the practice will participate. Since the transition to a PCMH requires considerable process change, be prepared to extend the time allocation up to 150% of the initial projection.

Appraise IT capabilities

Running an effective PCMH requires rigorous IT support. At the outset of PCMH pursuit, assess IT capabilities and determine the fiscal feasibility of needed system upgrades. Practices with insufficient IT capabilities will require additional worked hours, operating costs, and capital expense to meet PCMH expectations.

Ensure physician leader engagement

PCMH evolution requires engaged physician leadership at both the health system and individual practice levels. While leading practice transformation within their practices, physician leaders must embrace redefined team-based care delivery models in which they cede appropriate responsibility to staff. Physicians must champion process change and support staff in adjusting to new responsibilities. Staff will continue to look to physician leaders for overt and covert signs of acceptance of the adopted changes.

Understand revenue and expense implications

PCMH transition requires investment of financial and personnel resources. Identify anticipated incremental fee-for-service, per-member-per-month, and other financial incentives the practice will receive. Consider whether fee-for-service payments are adjusted for panel severity and required medical home services. Remember to adjust for reductions in denied admissions (or re-admissions) and denied Emergency Department visits.

From an expense perspective, in addition to incremental resource requirements, allocate time needed for staff members participating in practice transition and include training time needed to prepare staff for refined roles and team based approaches.

In beginning PCMH transition, consult professional organizations' websites and access the NCQA and The Joint Commission standards. Together, these resources provide a PCMH framework and a guide to transition. Consider engaging an external resource to facilitate practice evolution. The Agency for Healthcare Research and Quality suggests that external resource utilization proves more successful than undertaking practice transformation with internal resources alone.
We are pleased to have the opportunity to provide this information to you. For additional information and dialogue, please contact Marianne Dietrick-Gallagher or Bob Gift at (484) 840-1984.

Best Regards,

Bob Gift

Source: IMA Insight - www.ima-consulting.com