FreeClinic_JHHSArevision_singlespace1

FreeClinic_JHHSArevision_singlespace1 - Benefits and Costs...

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1 Benefits and Costs of a Free Community-Based Primary Care Clinic Angela R. Fertig, University of Georgia Phaedra S. Corso, University of Georgia Divya Balasubramaniam, St. Joseph’s University Abstract This study estimates the benefits and costs of a free clinic providing primary care services. Using matched data from a free clinic and its corresponding regional hospital on a sample of newly enrolled clinic patients, patients’ non-urgent emergency department (ED) and inpatient hospital costs in the year prior to clinic enrollment were compared to those in the year following enrollment to obtain financial benefits. We compare these to annual estimates of the costs associated with the delivery of primary care to these patients. For our sample (n=207), the annual non-urgent ED and inpatient costs at the hospital fell by $170 per patient after clinic enrollment. However, the cost associated with delivering primary care in the first year after clinic enrollment cost $505 per patient. The presence of a free primary care clinic reduces hospital costs associated with non-urgent ED use and inpatient care. These reductions in costs need to be sustained for at least 3 years to offset the costs associated with the initially high diagnostic and treatment costs involved in the delivery of primary care to an uninsured population. Forthcoming in the Journal of Health and Human Services Administration
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2 It has been estimated that the annual cost of uncompensated health services provided to uninsured people in the United States was $56 billion in 2008 (Hadley, Holahan, Coughlin, & Miller, 2008). In particular, the utilization and costs of emergency departments (ED) for non-urgent care has been a considerable and growing problem over the last several decades (Baker & Baker, 1994; Grumbach, Keane & Bindman, 1993). More recently, there is evidence that potentially preventable hospitalizations are on the rise as well (Russo, Jiang & Barrett, 2007). In response to this inefficient and costly utilization of hospital care across the country, many hospitals and communities have sought different mechanisms for providing primary care for the uninsured or under-insured. These mechanisms have ranged from free-standing clinics, to mobile units, to expansion of primary care services provided in already established settings, such as schools or churches. Funding for these initiatives, which provide both free or nearly free healthcare in many cases, comes from federal, state and local governments, faith-based organizations, non-profit groups, businesses, hospitals, and individual donations. Most policy makers, healthcare industry leaders, funders and providers of primary healthcare believe that these primary care clinics are “cost-effective” because access to preventive care is believed to be a more efficient use of scarce health resources relative to the use of ED or inpatient services that might eventually be needed for untreated health conditions. However, there are surprisingly few studies that have rigorously assessed the
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