The effects of medical group practice and physician payment methods on costs of care

Je. Kralewski et al., The effects of medical group practice and physician payment methods on costs of care, HEAL SERV R, 35(3), 2000, pp. 591-613
Citations number
Categorie Soggetti
Public Health & Health Care Science","Health Care Sciences & Services
Journal title
ISSN journal
0017-9124 → ACNP
Year of publication
591 - 613
SICI code
Objective. To assess the effects of payment methods on the costs of care in medical group practices. Data Sources. Eighty-six clinics providing servic es for a Blue Cross managed care program during 1995. The clinics were anal yzed to determine the relationship between payment methods and cost of care . Cost and patient data were obtained from Blue Cross records, and medical group practice clinic data were obtained by a survey of those organizations . Study Design. The effects of clinic and physician payment methods on per me mber per year (PMPY) adjusted patient costs are evaluated using a two-stage regression model. Patient costs are adjusted for differences in payment sc hedules; patient age, gender, and ACG; clinic organizational variables are included as explanatory variables. Data Collection. Patient cost data were extracted from Blue Cross claims fi les, and patient and physician data from their enrollee and provider data b anks. Medical group practice data were obtained by a mailed survey with tel ephone follow-up. Principal Findings. Capitation payment is correlated with lower patient car e costs. When combined with fee-for-service with withhold provisions, this effect is smaller indicating that these two clinic payment methods are not interchangeable. Clinics with more physician compensation based on measures of resource use or based on some share of the net revenue of the clinic ha ve lower patient care costs than those with more compensation related to pr oductivity or based on salary. Salary compensation is strongly associated w ith higher costs. The use of physician profiles and clinical guidelines is associated with lower costs, but referral management systems have no such e ffect. The lower cost clinics are the smaller, multispecialty clinics. Conclusions. This study indicates that payment methods at both the medical group practice and physician levels influence the cost of care. However, th e methods by which that influence is manifest is not dear. Although the org anizational structure of clinics and their use of managed care programs app ear to play a role, this influence is less than expected.