How to Lower Health Care Costs: Why Not Provide Greater Access to Mid-Level Providers?

We see news reports every day of rising health care costs; overall, U.S. health spending is much higher for all categories of care, especially for ambulatory care, compared to other developed countries. And a recent survey shows that nearly 30% of adults in the U.S. reported that someone in their household has had problems paying medical bills in the past year.

I am often asked for ideas about how to reduce health care costs, but honestly, most of what I recommend, while based on evidence, is not very popular. In the latest example, a recent study in the American Journal of Managed Care shows that NPs and PAs make different prescribing decisions as compared to primary care providers, and those decisions result in lower costs.

The study evaluated the prescribing and ordering habits of primary care providers compared with those of NPs and PAs, specifically for patients with neck or back pain or acute respiratory infection (ARI). These two medical conditions are frequently associated with orders for ancillary services that are “overused and add cost without value,” such as CT scans/MRIs and narcotic analgesics for management of neck/back pain, and antibiotics to manage ARI.

The study found that overall, NPs and PAs were less likely to order these kinds of ancillary services and prescriptions, than were physicians.

For neck/back pain, primary care providers (PCPs) “were more likely to order CTs/MRIs and narcotic analgesics and NPs/PAs were more likely to order nonnarcotic analgesics and muscle relaxants,” the study finds.

“Similarly, differences were noted in management of ARI: PCPs were more likely to order CTs/MRIs – although the rate of these orders was low – as well as x-rays, broad spectrum antibiotics, and rapid strep tests; NPs/PAs were more likely to order any antibiotic,” the authors say.

“On balance, PCPs tended to be more likely than NPs/PAs to order diagnostic or therapeutic services related to N/B pain and ARI visits and to order more costly services among alternatives (e.g., CTs/MRIs vs x-rays for adults with N/B pain, broad spectrum antibiotics vs first-line general antibiotics for adults with ARIs).”

“The pattern of ancillary services use suggests that NPs/PAs might have been more judicious in use of ‘low-value’ ancillary services than PCPs,” the study finds. “

This is particularly important for treatment of back pain, where there is concern about overuse of CTs/MRIs and narcotic analgesics. For management of ARI, “overuse of antibiotics—particularly broad-spectrum antibiotics—is a long-standing concern.” In addition, overuse of rapid strep tests is another concern in management related to treating ARIs.

The study sheds further light on the issue of “low-value care,” defined as expensive procedures and tests with questionable therapeutic value; as I noted in a recent blog, a study found that one-third of Americans “have difficulty envisioning benefits from avoiding low-value care.”

Turning to hospitals, this sector is increasingly looking to non-MDs, such as NPs/PAs, to help alleviate the physician shortage, as described in a recent Practice Management News article.

The Association of American Medical Colleges (AAMC) has projected the provider shortfall will grow to 104,900 physicians by 2030. Given that NPs and PAs are typically paid less than MDs – e.g., PAs earned about $111,500 on average in 2016 versus $294,000 for average physician compensation in 2017 – hospitals may save on costs by increasing their ratio of PAs/NPs to physicians.

This study suggests that using mid-level (non-MD) providers may be one way to reduce health care expenditures. It’s not a popular solution with certain stakeholders (you can guess which ones), but when it comes to consumers, this study clearly shows a way to lower health care costs.