Costs and benefits of transforming primary care practices: a qualitative study of North Carolina's Improving Performance in Practice

Abstract

Primary care organizations must transform care delivery to realize the Institute for Healthcare Improvement's Triple Aim of better healthcare, better health, and lower healthcare costs. However, few studies have considered the financial implications for primary care practices engaged in transformation. In this qualitative, comparative case study, we examine the practice-level personnel and nonpersonnel costs and the benefits involved in transformational change among 12 primary care practices participating in North Carolina's Improving Performance in Practice (IPIP) program. We found average annual opportunity costs of $21,550 ($6,659 per full-time equivalent provider) for maintaining core IPIP activities (e.g., data management, form development and maintenance, meeting attendance). This average represents the cost of a 50% full-time equivalent registered nurse or licensed practical nurse. Practices were able to limit transformation costs by scheduling meetings during relatively slow patient care periods and by leveraging resources such as the assistance of IPIP practice coaches. Still, the costs of practice transformation were not trivial and would have been much higher in the absence of these efforts. Benefits of transformation included opportunities for enhanced revenue through reimbursement incentives and practice growth, improved efficiency and care quality, and maintenance of certification. Given the potentially high costs for some practices, policy makers may need to consider reimbursement and other strategies to help primary care practices manage the costs of practice redesign.