PUBLIC HEALTH BRIEFS
The Viability of Mid-Level Practitioners In Isolated Rural Communities IRA MOSCOVICE, PHD,
AND
Introduction In the last decade there has been an increasing emphasis on providing equal access to health care for all citizens of the United States.1 2 Rural dwellers have been identified as a population group who experience significant barriers to gaining access to the traditional health care delivery system. The problem becomes more acute for the target population that is more remote from larger communities. One potential solution in which significant investment has been made is the training and use of nonphysician health providers for the delivery of primary health care services. This study examines the attempt of the National Health Service Corps (NHSC) in the Pacific Northwest (Washington, Oregon, Idaho) and Alaska to use non-physician health providers (physician assistants and nurse practitioners) to solve the health care needs of the geographically isolated community. It focuses on an analysis of the financial growth and evolution of this type of practice through which hopefully one can draw some preliminary conclusions about the economic viability of the model.
The Experimental Setting The NHSC in the Northwest The NHSC was created in 1971 to remedy the problem of physician maldistribution in the United States, particularly in rural areas. In its legislative mandate, the NHSC was given the authority to deploy all types of health manpower as a means of redistributing health care services. Very early in its history, the NHSC realized that it was not practical to place solo physicians in towns with fewer than 3,000 people and without hospitals. As a result of the recruiting difficulty for such towns, and in order to experiment with new types of health manpower, the Corps established eight geographically remote mid-level practices in DHEW Region X between the years 1973 and 1975. Each of these communities had fewer than 3,000 people and a rapidly deteriorating or non-existent health care system, with the ex-
Address reprint requests to Ira Moscovice, PhD, Center for Health Services Research, Department of Health Services, SC-37, School of Public Health and Community Medicine, University of Washington, Seattle, WA 98195. Dr. Rosenblatt is with the Department of Family Medicine, School of Medicine, University of Washington. This paper, submitted to the Journal June 20, 1978, was revised and accepted for publication September 5, 1978.
AJPH May, 1979, Vol. 69, No. 5
ROGER ROSENBLATT, MD, MPH
ception of three Alaskan villages that were part of the Community Health Aide Program administered by the Alaska Native Health Service. Each practice was required to submit a monthly statement of operations (MSO) to the NHSC. The MSO was used by the practice and the regional office as the major tool for monitoring the growth of the practice, identifying problem areas, and targeting technical assistance. Growth Patterns of Geographically Isolated Mid-Level Practitioner Clinics The monthly statements of operations were used to collect the data for each practice.* Of the eight remote mid-level practitioner clinics established by the NHSC during 1973-1975, six had complete sets of data on the initial two to three years of practice life and were chosen for this analysis. Table 1 shows the development over time of the key financial characteristics of the remote mid-level practitioner sites in the Pacific Northwest and Alaska. Sites in the Northwest (NW) increased their quarterly charges from approximately $6,500 to $8,800 per provider full-time equivalent (FTE) within two-and-one-half years. Sites in Alaska initially had appreciably lower gross charges than Northwest sites but grew considerably faster during the first three years of operation. This can most likely be attributed to the slow acceptance of the mid-level practitioner concept in remote Alaskan villages and the onset of contracts with the Indian Health Service after approximately two years of site operation. At two-and-one-half years, the four sites in the Northwest had a collection ratio of 99 per cent, indicating the success of the mid-level providers in negotiating reasonable reimbursement arrangements with the major third party carriers. In the Alaskan environment, the collection ratio is rendered less useful because most services provided to Native Americans become the contractual obligation of the Alaska Native Health Service. After two-and-one-half years of operation, providers in the Northwest had higher encounter rates (750 encounters per quarter) than Alaskan providers (450 encounters per quarter). This most likely is the result of the smaller service area populations in remote Alaskan villages as well as the slower acceptance of the mid-level practitioner concept in
*A detailed description of the methods used to collect and analyze the data from the MSO is presented in Reference 3.
503
PUBLIC HEALTH BRIEFS
TABLE 1-Financial Characteristics* of NHSC DHEW Region X Remote Mid-Level Practitioner Sites Gross Charges per provider FTIE NW (n = 4)
Alaska (n = 2)
Practice Collection Ratioa
Patient Encounters per provider FTE
Practice Expense Ratiob
Practice SelfSufficiency Ratioc
NW (n = 4)
Alaska (n = 2)
NW (n = 4)
Alaska (n = 2)
NW (n = 4)
Alaska (n = 2)
NW (n = 4)
Alaska (n = 2)
3.29
6 Months
Mean St. Dev. 1 Year Mean St. Dev. 11/2 Years Mean St. Dev. 2 Years Mean St. Dev. 21/2 Years Mean St. Dev. 3 Years Mean St. Dev.
6478 (2770)
(1113)
.72 (.22)
.52 (.26)
543 (296)
261 (43)
1.90 (1.31)
(1.35)
.34 (.18)
(.10)
8235 (3892)
4069 (3862)
.89
(.10)
.80 (.31)
760 (330)
457 (395)
.92 (.20)
1.72 (.74)
.60 (.21)
.27 (.08)
7091 (2915)
4484 (482)
.89 (.16)
1.03 (.05)
635 (209)
347 (47)
1.10 (.24)
2.65 (.10)
.53 (.20)
(.03)
8251 (3062)
8262 (824)
.88 (.16)
.82 (.20)
707 (238)
472 (19)
1.00 (.28)
1.95 (.47)
.60 (.22)
.34 (.02)
8805 (4853)
9204 (6115)
.99 (.31)
.62 (.16)
761 (389)
458 (217)
.99 (.27)
2.07 (1.17)
.71 (.32)
.23 (.06)
2062
11435 (6926)
.79 (.53)
589 (238)
1.50 (.64)
.13
.30
.39 (.09)
*All data presented are for the previous quarter (three months) to the time frame indicated. net receipts aCollection ratio = gross charges total expenses
bExpense ratio =
gross charges
net receipts total expenses + provider salaries The average salary for mid-level providers was $15,000 per year during the study period. Total expenses included salaries and benefits for non-NHSC support staff, supplies, equipment rental, rent and utilities, but excluded the costs of professional liability insurance and NHSC consultation.
cSelf-sufficiency ratio
=
Alaska in light of the existing Community Health Aide Program. Practices in the Northwest have expense ratios that have stabilized in the vicinity of 1.00, whereas practices in Alaska have ratios in the vicinity of 2.00. The latter figure is indicative of the tremendous expense involved in health care delivery in remote Alaskan villages. Both ratios are high, however, compared to the expense ratio values of .50 to .65 actually experienced in NHSC physician practices of equivalent age in DHEW Region X. Lastly, Table 1 shows the development over time of the self-sufficiency ratio for remote mid-level practitioner sites. These ratios are based on actual receipts, expenses, and provider salaries for each of the practices. After two-and-onehalf years of operation, Northwest sites were 71 per cent self-sufficient, and Alaskan sites were 23 per cent self-sufficient. Sites in Alaska will probably never become self-sufficient because of high expenses, small service area populations, and low utilization.** From the observed growth rate, it seems feasible that one to two additional years of
**Even with the sample size of six, practice self-sufficiency achieved a statistically significant Pearson correlation coefficient of 0.89 with size of service area population. 504
operation could result in self-sufficiency for the sites in the Northwest. In fact, of these four sites, three became independent of NHSC support within one year after the termination of the study.
Conclusions and Discussion These data shed light on one important aspect of the process of developing geographically remote mid-level practices, their economic growth and self-sufficiency. None of the study sites had attained self-sufficiency after two-andone-half years although the four practices in the Northwest could approach self-sufficiency with one or two more years of continued growth. The overall productivity of the mid-level practitioner sites was low, averaging between 2,000 and 3,000 encounters per year, or 8-12 patients per working day. This number is considerably lower than comparable figures for physicians in both the private sector4 and the NHSC5 but comparable to productivity figures reported for solo mid-level practices in other areas of the United States.6 These data suggest that there is a minimum population size for attaining financial self-sufficiency. Using generally accepted measures of utilization and fees, we can see that it AJPH May, 1979, Vol. 69, No. 5
PUBLIC HEALTH BRIEFS
requires a minimum population of 1,500 who would see the provider an average of three times a year at an average fee of $10 per encounter and a collection rate of 100 per cent to generate $45,000 a year in revenue. This figure represents a bare minimum for the support of one mid-level practitioner, without considering the cost of capitalizing facilities or equipment. Thus, it could be predicted that remote areas with smaller populations would be unable to sustain an independent NHSC mid-level practice without continuing subsidy. The high expense ratio demonstrated by the sites reflect the fact that a modern curative medical practice requires an expensive plant and relatively high personnel costs. Fixed costs are high; variable costs relatively low. This is exemplified by the Alaskan sites in which extremely remote, small villages have low utilization, high need, and high operating costs. Perhaps good management and experience can reduce these costs. However, the major decision revolves around questions of equity. If we as a society decide to make curative health care readily available to remote populations, we will have to increase external subsidies to increasingly smaller communities. On the other hand, the data suggest that from an economic standpoint mid-level practitioner sites
that are started and nurtured in communities of over 1,5002,000 people can approach financial self-sufficiency.
REFERENCES 1. Lewis CE, Fein R, and Mechanic D: A Right to Health-The Problem of Access to Primary Care. New York: John Wiley, 1976. 2. Aday LA and Andersen R: Access to Medical Care. Ann Arbor: Health Administration Press, 1975. 3. Rosenblatt R and Moscovice I: The growth and evolution of rural primary care practice-The National Health Service Corps experience in the Northwest. Med Care 16:21-29, 1978. 4. Reinhardt U: Physician Productivity and the Demand for Health Manpower. Cambridge: Ballinger, 1975. 5. Emery D, Calvin D, and Dobson A: An Analysis of NHSC Cost and Revenue Structures. USDHEW, Health Services Administration, Office of Planning, Evaluation and Legislation. Working Paper #4, 1976. 6. Bernstein J, Brooks E and De Friese G: Rural Health Services-Studies of Workable Models. Paper presented at the 1977 annual American Public Health Association meeting.
ACKNOWLEDGMENTS Support for this research was provided by a grant from the National Center for Health Services Research, HS 01978.
The Medical Cost of Drug Abuse In an Inner-City Community DIANE M. SIXSMITH, MD, MPH, AND FRED GOLDMAN, PHD There are currently no estimates of the medical costs of drug abuse at the community level. Recent national estimates of medical costs vary from $41 million annually to $494 million'-3 and appear to be substantially understated. Neither at the national nor at the community level do we possess population-based data describing the medical complications of drug abuse. A substantial literature on the medical sequelae of drug abuse, especially intravenous usage,4-6 has accumulated over the past 15 years. There is ample documentation of the more common complications such as infectious endocarditis,7 heroin pulmonary edema,8 hepatitis,9 renal disease,'0 and a variety of other infectious conditions.' ''3 In spite of this large body of accumulated experience, national reports of medical care utilization by drug abusers frequently From the Departments of Medicine and Ambulatory Care, Harlem Hospital Center, and Division of Health Administration, Columbia University School of Public Health. Address reprint requests to Dr. Diane M. Sixsmith, Director of Emergency Services, Harlem Hospital Center, New York, NY 10037. This paper, submitted to the Journal March 17, 1978, was revised and accepted for publication September 11, 1978.
AJPH May, 1979, Vol. 69, No. 5
fail to count hospitalizations or emergency room visits for these kinds of conditions. This is primarily due to the data collection methods of the principal reporting systems, which do not aim to estimate costs. 14-16 Thus, we are provided with estimates of the utilization of medical resources which appear substantially lower than the impressionistic reports of the medical staff of inner-city hospitals. 17 18
Methods The charts of all inpatients discharged from Harlem Hospital Center* during the month of November 1976 were reviewed for a history of current drug abuse. A patient was identified as a current drug abuser if drug abuse (excluding alcohol) was acknowledged within the pre*Harlem Hospital Center is a 1,000 bed acute-care municipal hospital serving a community with a high percentage of drug abusers. It has no special inpatient programs for treatment of drug abuse, and the discharges reviewed represented the general patient population. 505
The Viability of Mid-Level Practitioners In Isolated Rural Communities IRA MOSCOVICE, PHD,
AND
Introduction In the last decade there has been an increasing emphasis on providing equal access to health care for all citizens of the United States.1 2 Rural dwellers have been identified as a population group who experience significant barriers to gaining access to the traditional health care delivery system. The problem becomes more acute for the target population that is more remote from larger communities. One potential solution in which significant investment has been made is the training and use of nonphysician health providers for the delivery of primary health care services. This study examines the attempt of the National Health Service Corps (NHSC) in the Pacific Northwest (Washington, Oregon, Idaho) and Alaska to use non-physician health providers (physician assistants and nurse practitioners) to solve the health care needs of the geographically isolated community. It focuses on an analysis of the financial growth and evolution of this type of practice through which hopefully one can draw some preliminary conclusions about the economic viability of the model.
The Experimental Setting The NHSC in the Northwest The NHSC was created in 1971 to remedy the problem of physician maldistribution in the United States, particularly in rural areas. In its legislative mandate, the NHSC was given the authority to deploy all types of health manpower as a means of redistributing health care services. Very early in its history, the NHSC realized that it was not practical to place solo physicians in towns with fewer than 3,000 people and without hospitals. As a result of the recruiting difficulty for such towns, and in order to experiment with new types of health manpower, the Corps established eight geographically remote mid-level practices in DHEW Region X between the years 1973 and 1975. Each of these communities had fewer than 3,000 people and a rapidly deteriorating or non-existent health care system, with the ex-
Address reprint requests to Ira Moscovice, PhD, Center for Health Services Research, Department of Health Services, SC-37, School of Public Health and Community Medicine, University of Washington, Seattle, WA 98195. Dr. Rosenblatt is with the Department of Family Medicine, School of Medicine, University of Washington. This paper, submitted to the Journal June 20, 1978, was revised and accepted for publication September 5, 1978.
AJPH May, 1979, Vol. 69, No. 5
ROGER ROSENBLATT, MD, MPH
ception of three Alaskan villages that were part of the Community Health Aide Program administered by the Alaska Native Health Service. Each practice was required to submit a monthly statement of operations (MSO) to the NHSC. The MSO was used by the practice and the regional office as the major tool for monitoring the growth of the practice, identifying problem areas, and targeting technical assistance. Growth Patterns of Geographically Isolated Mid-Level Practitioner Clinics The monthly statements of operations were used to collect the data for each practice.* Of the eight remote mid-level practitioner clinics established by the NHSC during 1973-1975, six had complete sets of data on the initial two to three years of practice life and were chosen for this analysis. Table 1 shows the development over time of the key financial characteristics of the remote mid-level practitioner sites in the Pacific Northwest and Alaska. Sites in the Northwest (NW) increased their quarterly charges from approximately $6,500 to $8,800 per provider full-time equivalent (FTE) within two-and-one-half years. Sites in Alaska initially had appreciably lower gross charges than Northwest sites but grew considerably faster during the first three years of operation. This can most likely be attributed to the slow acceptance of the mid-level practitioner concept in remote Alaskan villages and the onset of contracts with the Indian Health Service after approximately two years of site operation. At two-and-one-half years, the four sites in the Northwest had a collection ratio of 99 per cent, indicating the success of the mid-level providers in negotiating reasonable reimbursement arrangements with the major third party carriers. In the Alaskan environment, the collection ratio is rendered less useful because most services provided to Native Americans become the contractual obligation of the Alaska Native Health Service. After two-and-one-half years of operation, providers in the Northwest had higher encounter rates (750 encounters per quarter) than Alaskan providers (450 encounters per quarter). This most likely is the result of the smaller service area populations in remote Alaskan villages as well as the slower acceptance of the mid-level practitioner concept in
*A detailed description of the methods used to collect and analyze the data from the MSO is presented in Reference 3.
503
PUBLIC HEALTH BRIEFS
TABLE 1-Financial Characteristics* of NHSC DHEW Region X Remote Mid-Level Practitioner Sites Gross Charges per provider FTIE NW (n = 4)
Alaska (n = 2)
Practice Collection Ratioa
Patient Encounters per provider FTE
Practice Expense Ratiob
Practice SelfSufficiency Ratioc
NW (n = 4)
Alaska (n = 2)
NW (n = 4)
Alaska (n = 2)
NW (n = 4)
Alaska (n = 2)
NW (n = 4)
Alaska (n = 2)
3.29
6 Months
Mean St. Dev. 1 Year Mean St. Dev. 11/2 Years Mean St. Dev. 2 Years Mean St. Dev. 21/2 Years Mean St. Dev. 3 Years Mean St. Dev.
6478 (2770)
(1113)
.72 (.22)
.52 (.26)
543 (296)
261 (43)
1.90 (1.31)
(1.35)
.34 (.18)
(.10)
8235 (3892)
4069 (3862)
.89
(.10)
.80 (.31)
760 (330)
457 (395)
.92 (.20)
1.72 (.74)
.60 (.21)
.27 (.08)
7091 (2915)
4484 (482)
.89 (.16)
1.03 (.05)
635 (209)
347 (47)
1.10 (.24)
2.65 (.10)
.53 (.20)
(.03)
8251 (3062)
8262 (824)
.88 (.16)
.82 (.20)
707 (238)
472 (19)
1.00 (.28)
1.95 (.47)
.60 (.22)
.34 (.02)
8805 (4853)
9204 (6115)
.99 (.31)
.62 (.16)
761 (389)
458 (217)
.99 (.27)
2.07 (1.17)
.71 (.32)
.23 (.06)
2062
11435 (6926)
.79 (.53)
589 (238)
1.50 (.64)
.13
.30
.39 (.09)
*All data presented are for the previous quarter (three months) to the time frame indicated. net receipts aCollection ratio = gross charges total expenses
bExpense ratio =
gross charges
net receipts total expenses + provider salaries The average salary for mid-level providers was $15,000 per year during the study period. Total expenses included salaries and benefits for non-NHSC support staff, supplies, equipment rental, rent and utilities, but excluded the costs of professional liability insurance and NHSC consultation.
cSelf-sufficiency ratio
=
Alaska in light of the existing Community Health Aide Program. Practices in the Northwest have expense ratios that have stabilized in the vicinity of 1.00, whereas practices in Alaska have ratios in the vicinity of 2.00. The latter figure is indicative of the tremendous expense involved in health care delivery in remote Alaskan villages. Both ratios are high, however, compared to the expense ratio values of .50 to .65 actually experienced in NHSC physician practices of equivalent age in DHEW Region X. Lastly, Table 1 shows the development over time of the self-sufficiency ratio for remote mid-level practitioner sites. These ratios are based on actual receipts, expenses, and provider salaries for each of the practices. After two-and-onehalf years of operation, Northwest sites were 71 per cent self-sufficient, and Alaskan sites were 23 per cent self-sufficient. Sites in Alaska will probably never become self-sufficient because of high expenses, small service area populations, and low utilization.** From the observed growth rate, it seems feasible that one to two additional years of
**Even with the sample size of six, practice self-sufficiency achieved a statistically significant Pearson correlation coefficient of 0.89 with size of service area population. 504
operation could result in self-sufficiency for the sites in the Northwest. In fact, of these four sites, three became independent of NHSC support within one year after the termination of the study.
Conclusions and Discussion These data shed light on one important aspect of the process of developing geographically remote mid-level practices, their economic growth and self-sufficiency. None of the study sites had attained self-sufficiency after two-andone-half years although the four practices in the Northwest could approach self-sufficiency with one or two more years of continued growth. The overall productivity of the mid-level practitioner sites was low, averaging between 2,000 and 3,000 encounters per year, or 8-12 patients per working day. This number is considerably lower than comparable figures for physicians in both the private sector4 and the NHSC5 but comparable to productivity figures reported for solo mid-level practices in other areas of the United States.6 These data suggest that there is a minimum population size for attaining financial self-sufficiency. Using generally accepted measures of utilization and fees, we can see that it AJPH May, 1979, Vol. 69, No. 5
PUBLIC HEALTH BRIEFS
requires a minimum population of 1,500 who would see the provider an average of three times a year at an average fee of $10 per encounter and a collection rate of 100 per cent to generate $45,000 a year in revenue. This figure represents a bare minimum for the support of one mid-level practitioner, without considering the cost of capitalizing facilities or equipment. Thus, it could be predicted that remote areas with smaller populations would be unable to sustain an independent NHSC mid-level practice without continuing subsidy. The high expense ratio demonstrated by the sites reflect the fact that a modern curative medical practice requires an expensive plant and relatively high personnel costs. Fixed costs are high; variable costs relatively low. This is exemplified by the Alaskan sites in which extremely remote, small villages have low utilization, high need, and high operating costs. Perhaps good management and experience can reduce these costs. However, the major decision revolves around questions of equity. If we as a society decide to make curative health care readily available to remote populations, we will have to increase external subsidies to increasingly smaller communities. On the other hand, the data suggest that from an economic standpoint mid-level practitioner sites
that are started and nurtured in communities of over 1,5002,000 people can approach financial self-sufficiency.
REFERENCES 1. Lewis CE, Fein R, and Mechanic D: A Right to Health-The Problem of Access to Primary Care. New York: John Wiley, 1976. 2. Aday LA and Andersen R: Access to Medical Care. Ann Arbor: Health Administration Press, 1975. 3. Rosenblatt R and Moscovice I: The growth and evolution of rural primary care practice-The National Health Service Corps experience in the Northwest. Med Care 16:21-29, 1978. 4. Reinhardt U: Physician Productivity and the Demand for Health Manpower. Cambridge: Ballinger, 1975. 5. Emery D, Calvin D, and Dobson A: An Analysis of NHSC Cost and Revenue Structures. USDHEW, Health Services Administration, Office of Planning, Evaluation and Legislation. Working Paper #4, 1976. 6. Bernstein J, Brooks E and De Friese G: Rural Health Services-Studies of Workable Models. Paper presented at the 1977 annual American Public Health Association meeting.
ACKNOWLEDGMENTS Support for this research was provided by a grant from the National Center for Health Services Research, HS 01978.
The Medical Cost of Drug Abuse In an Inner-City Community DIANE M. SIXSMITH, MD, MPH, AND FRED GOLDMAN, PHD There are currently no estimates of the medical costs of drug abuse at the community level. Recent national estimates of medical costs vary from $41 million annually to $494 million'-3 and appear to be substantially understated. Neither at the national nor at the community level do we possess population-based data describing the medical complications of drug abuse. A substantial literature on the medical sequelae of drug abuse, especially intravenous usage,4-6 has accumulated over the past 15 years. There is ample documentation of the more common complications such as infectious endocarditis,7 heroin pulmonary edema,8 hepatitis,9 renal disease,'0 and a variety of other infectious conditions.' ''3 In spite of this large body of accumulated experience, national reports of medical care utilization by drug abusers frequently From the Departments of Medicine and Ambulatory Care, Harlem Hospital Center, and Division of Health Administration, Columbia University School of Public Health. Address reprint requests to Dr. Diane M. Sixsmith, Director of Emergency Services, Harlem Hospital Center, New York, NY 10037. This paper, submitted to the Journal March 17, 1978, was revised and accepted for publication September 11, 1978.
AJPH May, 1979, Vol. 69, No. 5
fail to count hospitalizations or emergency room visits for these kinds of conditions. This is primarily due to the data collection methods of the principal reporting systems, which do not aim to estimate costs. 14-16 Thus, we are provided with estimates of the utilization of medical resources which appear substantially lower than the impressionistic reports of the medical staff of inner-city hospitals. 17 18
Methods The charts of all inpatients discharged from Harlem Hospital Center* during the month of November 1976 were reviewed for a history of current drug abuse. A patient was identified as a current drug abuser if drug abuse (excluding alcohol) was acknowledged within the pre*Harlem Hospital Center is a 1,000 bed acute-care municipal hospital serving a community with a high percentage of drug abusers. It has no special inpatient programs for treatment of drug abuse, and the discharges reviewed represented the general patient population. 505
