A comparison of hospital outpatient departments and private practice

This article addresses cost differences between primary care physicians in private practice and hospital outpatient departments (OPD's). The analysis utilizes ambulatory visit groups (AVG's), the outpatient equivalent of diagnosis-related groups (DRG's), to adjust for case mix. Major findings are that OPD's have higher per visit costs than physicians' private offices; internists are more expensive than general practitioners regardless of site; and ancillary service costs are actually slightly higher in private practice. Any prospective payment system for ambulatory care must consider these costs differences.