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.

Objectives

To compare health care use and spending of Medicaid enrollees seen at federally qualified health centers versus non-health center settings in a context of significant growth.

Methods

Using fee-for-service Medicaid claims from 13 states in 2009, we compared patients receiving the majority of their primary care in federally qualified health centers with propensity score-matched comparison groups receiving primary care in other settings.

Results

We found that health center patients had lower use and spending than did non-health center patients across all services, with 22% fewer visits and 33% lower spending on specialty care and 25% fewer admissions and 27% lower spending on inpatient care. Total spending was 24% lower for health center patients.

Conclusions

Our analysis of 2009 Medicaid claims, which includes the largest sample of states and more recent data than do previous multistate claims studies, demonstrates that the health center program has provided a cost-efficient setting for primary care for Medicaid enrollees.