IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

The Cost of Primary Care Doctors

  • Glied Sherry

    ()

    (Columbia University)

  • Prabhu Ashwin G

    ()

    (Columbia University)

  • Edelman Norman

    ()

    (SUNY Stony Brook)

Registered author(s):

    Research Objective: This study offers a novel approach to workforce planning in the physician market. Rather than projecting the future demand for physician services, a human capital model is used to estimate the societal cost of producing a physician service. The socially optimal workforce is one at which (at optimal practice scale), the societal cost of producing a physician service is equal to the societal benefit obtained from the service.Study Design: Physician human capital consists of two components: the underlying human capital (productivity) of those who become physicians and the job-specific investments (physician training) added to this underlying capital. The value of physicians' underlying human capital is estimated using a regression analysis of the National Longitudinal Sample of Youth (NLSY). For those in the survey who did not go on to become doctors, income over time is modeled as a function of a rich set of variables measured in youth, including family background, educational attainment and a range of high-school level performance tests. This equation is then used to forecast an age-earnings profile for doctors based on the characteristics in youth of those NLSY cohort participants who subsequently became doctors. Next, published estimates are used to measure the total cost (wherever paid) of investments in physician training. Combining these estimates, the social cost per primary care physician provided visit and Medicare relative value unit (RVU) is determined.Principal Findings: Physicians are drawn from the highest performing group of high school students. The earnings of comparable students who do not become doctors and the predicted earnings of would be doctors are substantially above the population mean. The opportunity cost of physician human capital is thus very high. The estimated societal cost per primary care physician visit is substantially higher than the average co-payment. The societal cost per primary care physician provided RVU is generally higher than the current Medicare compensation rate per RVU. The private return to primary care physician training is relatively low, in the range of 7-9%.Conclusions: At current levels of supply, the marginal social costs of primary care visits appear to be equal to or greater than marginal social benefits of many primary care services. In considering expansions of primary care capacity, it may be efficient to increase the use of complementary, lower-skilled practitioners.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.degruyter.com/view/j/fhep.2009.12.1/fhep.2009.12.1.1140/fhep.2009.12.1.1140.xml?format=INT
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by De Gruyter in its journal Forum for Health Economics & Policy.

    Volume (Year): 12 (2009)
    Issue (Month): 1 (August)
    Pages: 1-26

    as
    in new window

    Handle: RePEc:bpj:fhecpo:v:12:y:2009:i:1:n:4
    Contact details of provider: Web page: http://www.degruyter.com

    Order Information: Web: http://www.degruyter.com/view/j/fhep

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:bpj:fhecpo:v:12:y:2009:i:1:n:4. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.