Episode-based efficiency comparisons for physicians and nurse practitioners

Most previous studies comparing the efficiency of new health practitioners with that of physicians have used the visit as the basic unit of output. Several researchers have noted, though, that the episode is a conceptually superior output unit in several respects, although it is more complex to deal with methodologically. This study demonstrates the application of episode-based methods for comparing the efficiency of physicians with that of nurse practitioners. Data are drawn from the information system of the Columbia Medical Plan and from observations of provider time inputs. The analysis is confined to care episodes for otitis media and sore throat in the Department of Pediatrics. Results indicate that per episode costs with nurse practitioners as the initial provider are approximately 20 per cent below the costs of episodes in which physicians are the initial provider. Examination of a limited amount of data on patient-reported measures of effectiveness indicates that while nurse practitioners' care is less costly, it is not less effective. These findings are particularly interesting in light of recent doubts expressed about cost-savings from using new health practitioners, and particularly nurse practitioners, in group practice settings.