The Cost Implications of Academic Group Practice

We evaluated the reorganization of a general medical clinic into several group practices, using equivalent groups of patients and physicians in a randomized controlled trial. The group practice, unlike the traditional clinic, provided decentralized registration, clinic coverage five days a week, and telephone coverage at night and on weekends. Residents worked in small groups with an attending physician, nurse practitioner, and receptionist. All financial activity involving a sample of 2299 patients was followed during the 11-month intervention. The total hospital charges per patient were 26 percent lower for the patients seen in the group practice than for those seen in the traditional clinic (P = 0.003). This difference was primarily attributable to inpatient charges, which were 27 percent lower per patient hospitalized (P = 0.004). The mean length of stay was 8.3 days among group-practice patients and 10.5 days among traditional-clinic patients (P = 0.011). We conclude that organizational changes to improve outpatient access and to integrate inpatient and outpatient services can decrease medical charges. (N Engl J Med 1986; 314:1553–7.), THE cost of medical care at academic centers is reported to be 11 to 33 percent higher than at community medical centers, even when case mix is controlled for.^1,2 This cost differential has been attributed to both fixed costs, such as those of supporting teaching personnel, and variable costs, such as those due to the higher use of ancillary services and longer lengths of stay associated with academic medical centers.^3,4 A number of efforts have been directed at altering the use of ancillary services by house officers in academic centers. A variety of cost-containment strategies, including educational interventions,^5,6 cost feedback….