The impact of contract primary care on health care expenditures and quality of care

Abstract

The Department of Veterans Affairs (VA) established community-based outpatient clinics to improve veterans' access to primary care. This article compares VA use and expenditures among primary care users at 76 VA-staffed community clinics (n = 17,060) and 32 non-VA contract community clinics receiving capitation (n = 6,842) using VA administrative databases. It estimates utilization using negative binomial models and expenditures using generalized linear one-part or two-part models. Contract community clinic patients are less likely to use all types of outpatient services than VA-staffed community clinic patients but had similar quality of care. For patients seeking care, contract community clinic patients had similar specialty care expenditures but lower primary care, outpatient, and overall expenditures. Results suggest that capitated contract clinics did not shift costs to specialty care and appeared to be an economically efficient mechanism for improving veterans' access to primary care while meeting VA quality of care standards.