Cost-Utility Analysis of the Patient-Centered Medical Home

Background: The patient-centered medical home (PCMH) is one promising model for delivering high quality, efficient, and equitable primary care. It is associated with reducing racial and ethnic disparities, costs, and overall identified as a model for delivering high quality, person-centered care in primary care settings. Currently no studies have examined the cost-effectiveness of a medical home using a nationally representative sample of adults. Objective: Using the Household Component of the Medical Expenditure Panel Survey (MEPS) 2008 we will 1) estimate the prevalence of having a medical home; 2) estimate and compare healthcare expenditures between adults in a medical home and those without; 3) determine the cost-effectiveness of the medical home. Methods: Based on a previously used definition of the PCMH using MEPS data, PCMH was defined as respondent's access to healthcare meeting five out of seven criteria. Based on these characteristics respondents were characterized as: having usual source of care and a medical home; and having a usual source of care but not a medical home. Total, ambulatory, inpatient, and emergency department costs were estimated separately using a two-part GLM model with gamma distribution and log link and recycled coefficients. Results: The estimated average effect (cost) of the PCMH was consistently higher in all expenditure categories, although the magnitude differed across the categories. This pattern remained when adding chronic disease covariates, although the magnitude of impact of adjusting for these covariates varied slightly. Overall, across all categories the average cost per QALY of providing care in a PCMH versus a usual source of care was consistently under $50,000 per QALY, an unofficial U.S. standard. Average total costs per QALY of providing care was $10,093 when adjusting for demographic characteristics and slightly lower ($9,353) when also adjusting for chronic disease. Office-based and prescription average costs per QALY were approximately $3000 each when adjusting for demographic characteristics. Emergency department average costs per QALY were low at $227 when adjusting for demographic characteristics. Inpatient average costs per QALY were $1,973 when adjusting for demographic characteristics. Implications: Our findings support the spread of the PCMH.