Variation in Spending Associated With Primary Care Practices

ABSTRACT

Am J Manag Care. 2021;27(7)297-300. https//doi.org/10.37765/ajmc.2021.88557 _____ Takeaway Points Physician practices account for a significant amount of variation in spending. * There is widespread variation in spending associated with physician practices. * This likely reflects variation in utilization and in the prices of care delivered by the practice and the sites they refer to. * Significant savings can be obtained if patients shift from practices associated with high spending to those with low spending. _____ Although the country is making preliminary steps toward recovery, the COVID-19 pandemic has sent the United States into its most significant economic downturn since the Great Depression, which will significantly exacerbate pressure for employers to control health care spending. A large body of literature documents the significant variation in prices within markets, from which it can be inferred that considerable cost-saving opportunities are associated with price shopping.1 Importantly, physician practice prices have not been found to be associated with quality or efficiency metrics.2 The literature on practice style variation suggests that there may also be savings opportunities from identifying physicians with less intensive practice styles.3 For example, physician beliefs about treatment regimens contribute to significant regional differences in physician practice spending.4 Similarly, physician experience is associated with spending, as less experienced primary care physicians (PCPs) and specialists have higher overall costs.5 Much of the practice variation literature focuses on market-level analysis, which masks widespread variation within geography.6,7 For this reason, the National Academy of Medicine has called for greater understanding of variation attributable to physician practice styles.8 We extend the nascent research on this topic using unique data on commercial prices and spending. [...]patient preferences regarding specialist visits are associated with higher specialist utilization, suggesting that other factors besides PCP referrals can play significant roles in care usage.9 Moreover, research has shown that patients are often unwilling to sacrifice time or money to maintain continuity of care with PCPs;such continuity is associated with better outcomes and more cost-effective care.10 However, given that PCPs serve as a first contact and main provider for most individuals, identifying variation in practice spending and prices still provides valuable insight into how best to utilize primary care efficiently. Because we controlled for 3-digit zip code, the quartiles should be interpreted as relative to other practices in their 3-digit zip code.