President, Temm & Associates, Inc.

Dissertation Title

Patient-centered medical homes: Analysis of the effects of practice capabilities on costs.

Dissertation Abstract

The purpose of this research was to examine the relationship between Patient-Centered Medical Homes (PCMH) practice capabilities and costs. Complexity science theory was used to develop a theoretical framework to address three primary and twelve secondary hypotheses. Secondary data from a consortium of physician organizations participating in Blue Cross Blue Shield of Michigan's Physician Group Incentive Program and Blue Cross Blue Shield of Michigan's administrative claims data were used to test hypothesized relationships using fixed effects panel regression models.

It was found that higher levels of aggregated PCMH practice capabilities were negatively associated with certain costs, specifically average readmission costs. In addition, it was found that high-touch relationship-centered PCMH practice capabilities were more highly correlated with cost reduction than high-technology capabilities. Furthermore, high levels of certain individual PCMH practice capabilities were negatively associated with certain costs. Specifically, patient-provider partnership capabilities and test result tracking and follow-up capabilities were negatively associated with average emergency room costs. Likewise, patient-provider capabilities and specialist referral process capabilities were negatively associated with average readmission costs. No significant associations were noted between PCMH capabilities and initial admission costs.

Findings from the study are useful to physician practices, physician organizations, payers and policymakers to extend their knowledge of how PCMH practice capabilities are related to costs. Practitioners interested in expanding the PCMH model may also use these findings to evaluate and determine the order of PCMH practice capability implementation. The findings also provide important insights and direction to be explored in future research.