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Hospital-sponsored primary care: I. Organizational and financial effects.

S M Shortell, T M Wickizer and J R Wheeler

Findings are presented from a seven-year (1976-83) evaluation of the Community Hospital Program (CHP), a national demonstration program sponsored by the Robert Wood Johnson Foundation to assist 54 community hospitals in improving the organization of access to primary care. Upon grant expiration, 66 per cent of hospital-sponsored group practices continued under some form of hospital sponsorship; over 90 per cent developed or were planning to develop spin-off programs; and new physicians were recruited and retained in the community. About 9 per cent of hospital admissions were accounted for by group physicians and grantee hospitals experienced a greater annual increase in their market share of admissions than competing hospitals in the area. While only three of the groups generated sufficient revenue to cover expenses during the grant period, 21 additional groups broke even during the first post-grant year. Productivity and cost per visit compared favorably with most other forms of care. Hospitalization rates from the hospital-sponsored practices were somewhat lower than those for other forms of care. Medical director leadership and involvement and the organization design of the practice were among several key factors associated with higher performing practices. The ability of such joint hospital-physician ventures to meet the needs of the poor and elderly in a time of Medicare and Medicaid cutbacks is discussed along with suggestions for targeting future initiatives in primary care.

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