Cost-Benefit Analysis of Physician Assistants

This study examined if physician assistants (PAs) are cost-beneficial to employers. In an era of cost accountability, questions arise about whether a visit to a PA for an episode of care differs from a visit to a physician, and if PAs erode their cost-effectiveness by the manner in which they manage patients. Four common acute medical conditions seen by PAs and physicians within a large health maintenance organization were identified to study. An episode approach was undertaken to identify all laboratory, imaging, medication and provider costs for these diagnoses. Over 12,700 medical office visits were analyzed and assigned to each type of provider and medical department. Patient variables included age, gender, and health status. A multivariate analysis identified significant cost differences in each cohort of patients. In every condition managed by PAs, the total cost of the visit was less than that of a physician in the same department. This was significant for episodes of shoulder tendinitis, otitis media, and urinary tract infections. In no instance were PAs statistically different from physicians in use of laboratory and imaging costs. In each instance the total cost of the episode was less when treated by a PA. Sometimes PAs ordered fewer laboratory tests than physicians. There were no differences in the rate of return visits for a diagnosis between physicians and PAs. Patient differences were held constant for age, gender, and health status. This study affirms that PAs are not only cost-effective from a labor standpoint but are also cost-beneficial to those who employ them. In most cases, they order resources for diagnosis and treatment in a manner similar to physicians for an episode of care, but the cost of an episode of an illness is more economical overall when the P A delivers the care. This study validates the federal policy of support for primary care P A education and suggests that PA employment should be expanded in many sectors of the health care system. These findings and the results of this cost-benefit model are evidence of its validity in predicting health care costs