The Effects of an Experimental Prepaid Group Practice on Medical Care Utilization and Cost

• Published in: Medical care 1976-05, Vol.14 (5), p.432-449
• Main Authors: Perkoff, Gerald T., Kahn, Lawrence, Haas, Phillip J.
• Format: Article
• Language: English
• Subjects: Adult; Ambulatory Care; Child; Cost control; Costs and Cost Analysis; Deferred expenses; Economics, Hospital; Fees; Fees, Medical; Female; Group medical practices; Group Practice; Health care costs; Health Services - statistics & numerical data; Hospital costs; Hospital utilization rate; Hospitals - statistics & numerical data; Humans; Insurance, Major Medical; Male; Medicine; Missouri; Patient care; Physicians; Primary health care; Private Practice; Prospective Studies; Specialization
• ISSN: 0025-7079; 1537-1948
• DOI: 10.1097/00005650-197605000-00005

Rates of utilization and costs of medical care by a study group in a prepaid group practice, the Medical Care Group of Washington University (MCG), were compared prospectively over a three-year period with those of a demonstrably similar control group cared for by fee-for-service private physicians. MCG enrollees used twice the ambulatory services control enrollees did (p = < 0.01), but used 23 per cent fewer hospital days (p = < 0.01). Cost per diagnostic and therapeutic visit was similar for both groups; MCG preventive visits cost more. Increased numbers of MCG services provided led to increased ambulatory care costs for MCG over controls. Hospital utilization savings did not compensate for these increased costs. Thus prepayment in an organized setting did change hospital and ambulatory care utilization but did not reduce medical care costs. Other changes in medical care besides those which result from a different organization of medical care are discussed which might make control of medical care costs more likely.