Impact of a Family Medicine Minor Procedure Service on Cost of Care for a Health Plan

Abstract

Background and Objectives: Academic medical centers (AMC) are among some of the most expensive places to provide care. One way to cut costs is by decreasing unnecessary referrals to specialists for procedures that can be provided by well-trained primary care physicians. Our goal is to measure the financial impact of an office-based minor procedure service driven entirely by family physicians. Methods: We examined claims data for procedures performed on patients insured under our AMC’s home-grown accountable care organization-style health plan (Stanford Health Care Alliance [SHCA]). Descriptive statistics was used to compare the volume and cost of procedures performed by family medicine (FM) versus specialty care (SC). We preformed a subanalysis of SC procedures to explore the degree to which consultation and facility fees increased costs for SC. We used mathematical modeling to estimate the impact on cost of care if procedures were shifted from SC to FM and to calculate a return on investment (ROI). Results: Our data set examined 6,974 outpatient procedures performed on SHCA patients from 2016-2018 at a cost of $5,263,720 to SHCA. FM performed 6% of procedures at an average cost of $236 per procedure, while SC performed 94% of procedures at an average cost of $787 per procedure. FM saved money for all 12 types of skin, musculoskeletal, and reproductive procedures assessed; the average saved per procedure was $551. This represents a 70% cost savings. ROI was 2.33; for every $1 spent on FM procedures, SHCA saved $2.33. Conclusion: A family medicine minor procedure service significantly lowered health spending at our AMC.