The Economic Impact and Multiplier Effect of a Family Practice Clinic on an Academic Medical Center

Abstract

Academic medical centers are facing the need to expand their primary care referral base in an increasingly competitive medical environment. This study describes the medical care provided during a 1-year period to 6304 patients registered with a family practice clinic located in an academic medical center. The relative distribution of primary care, secondary referrals, inpatient admissions, and their associated costs are presented. The multiplier effect of the primary care clinic on the academic medical center was substantial. For every $1 billed for ambulatory primary care, there was $6.40 billed elsewhere in the system. Each full-time equivalent family physician generated a calculated sum of $784,752 in direct, billed charges for the hospital and $241,276 in professional fees for the other specialty consultants. The cost of supporting a primary care clinic is likely to be more than offset by the revenues generated from the use of hospital and referral services by patients who received care in the primary care setting.