Providing Primary General Medical Care in University Hospitals

Efficiency and Cost

Published In: Annals of Internal Medicine, v. 107, no. 3, Sep. 1987, p. 399-405

by Jacqueline Kosecoff, Robert H. Brook, Arlene Fink, Caren Kamberg, Carol P. Roth, George A. Goldberg, Lawrence S. Linn, Virginia Clark, Joseph P. Newhouse, Thomas L. Delbanco

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Data on efficiency, costs, and profits of 15 internal medicine outpatient group practices in university hospitals were collected for 9 months from interviews, a time-motion study, observations, and reviews of bills. Charges for a follow-up visit were about 25% higher than Medicare's allowable charges, but differed threefold across practices. Physicians spent more than half their allocated patient care or supervision time in other activities and 14% of nursing time was used for direct patient care. Visits to second- and third-year residents cost one half of those to faculty. Faculty supervision of second- and third-year residents was limited; it was, on average, 2 minutes per follow-up visit. Despite these inefficiencies, bad debts, and educational costs, practices appeared to break even financially. We conclude it is financially feasible for university hospitals to provide primary care to disadvantaged populations.

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