Use of Lower-priced Primary Care Doctors

By December 12, 2016Commentary

How to reduce health spending, the never-ending quest.  Here is another possible direction for those efforts.  Research published in Health Affairs examines the impact of using primary care physicians who charge less.   (HA Article)   The authors examine this from the patient’s and the payer’s perspective, with a slant toward the utility of price transparency efforts that don’t look at cost impacts beyond just the price of primary care services.  Since a primary care physician often controls much of the use of other services–referrals, diagnostic testing, procedures, and prescription drugs–and those other services have patient cost-sharing associated with them, really understanding the cost impacts requires an analysis of the primary care doctor’s use of those other services and the cost of them to the patient and the payer.  Using a commercial database the researchers grouped primary care doctors into three price categories, low, average and high, and identified total costs associated with doctors in each of the tiers.  They assigned patients to a primary care physician based on percent of visits to a particular one.  They tracked total spending in various categories other than primary care, analyzing both utilization and price of these services.

Low-price physicians were only 14% of all primary care doctors, and saw only 8% of patients in the study.  High-price doctors were 21% of all PCPs, and saw 36% of patients.  Patients of lower-cost doctors were generally older and in poorer health.  Prices for almost all of the referred or prescribed services were lower for the lower-priced doctors than for the high-price ones.  Total spending per year was $690, or 8%, less for patients of these lower-cost primary care doctors than for the high-price physicians’ patients.   There was a slightly smaller amount of out-of-pocket payments; most of the benefit of the lower spending accrued to the health plan.  The research suggests that both patients and payers could benefit by price transparency data that shows the total cost associated with use of a particular primary care physician.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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