Medicare Specialists Supply of Medical Services

Usual Source of Care Increases Spending

Does having a specialist as your usual source of care (USOC) increase costs?

Among high-cost beneficiaries, the 27.8 percent attributed to a medical specialist as their USOCphysician had U.S.$1,839 greater costs than those attributed to primary care physicians, representing roughly 4 percent of the mean cost of care. Although this may reflect unmeasured patient preferences and health status differences, research provides mixed results whether management by specialists leads to better outcomes or lower costs (Donohoe 1998; Hartz and James 2006; Smetana et al. 2007)

Likely, this evidence is based on correlation rather than causation.  Patient with severe illnesses which require significant specialist treatment are more likely to visit specialists.  Thus, going to a primary care provider in addition to these required specialist visit has a smaller marginal benefit.  Healthier patients who do not need to visit specialists, on the other hand, will visit their PCP.  Thus, observing that patients with a specialist as the USOC is more likely due to the fact that having a specialist as one’s USOC is an indicator of health status and only partially due to the fact that specialists may be worse at coordinating care for complex patients.


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