Comparing the Cost of Caring for Medicare Beneficiaries in Federally Funded Health Centers to Other Care Settings.

OBJECTIVE: To compare total annual costs for Medicare beneficiaries receiving primary care in federally funded health centers (HCs) to Medicare beneficiaries in physician offices and outpatient clinics. DATA SOURCES/STUDY SETTINGS: Part A and B fee-for-service Medicare claims from 14 geographically diverse states. The sample was restricted to beneficiaries residing within primary care service areas (PCSAs) with at least one HC. STUDY
DESIGN: We modeled separately total annual costs, annual primary care costs, and annual nonprimary care costs as a function of patient characteristics and PCSA fixed effects. DATA COLLECTION: Data were obtained from the Centers for Medicare & Medicaid Services. PRINCIPAL
FINDINGS: Total median annual costs (at $2,370) for HC Medicare patients were lower by 10 percent compared to patients in physician offices ($2,667) and by 30 percent compared to patients in outpatient clinics ($3,580). This was due to lower nonprimary care costs in HCs, despite higher primary care costs.
CONCLUSIONS: HCs may offer lower total cost practice style to the Centers for Medicare & Medicaid Services, which administers Medicare. Future research should examine whether these lower costs reflect better management by HC practitioners or more limited access to specialty care by HC patients. © Health Research and Educational Trust.