Economic Value of a Physician Assistant
Economic Value of a Physician Assistant
Economic Value of a Physician Assistant
Many PAs are unclear about the financial contribution they make to practice. This module sheds light on the subject so that the PA can understand their financial worth. The PA will be more prepared for the compensation negotiation process if they understand these principles. The PA will also benefit from understanding how the organization makes financial decisions and how the PA affects the bottom line. The non-economic features of the PA will also be covered in this discussion.
Institutions benefit from employing physician assistants (PAs) because they help improve economic productivity and efficacy while enhancing the quality of provided services. The effectiveness and efficacy of healthcare at the physician practices’ microlevel is increasingly becoming a topic in healthcare research and evidence-based practice to determine scientific validity and empirical research these healthcare organizations can adopt in financial decision-making. The United States introduced PAs in the 1960s to enhance and extend the healthcare workforce after experiencing a shortage of physicians in primary care following concerns that physicians chose to enter high-paying specialties instead of primary care to increase the ability to pay the high student debt.1 Since then, the PAs scope of practice has changed dramatically with increased job opportunities in the medical and surgical fields. In 2016, almost (47.1%) half of practicing physicians owned their practice, which significantly affected the economic value comparison of physicians and PAs.1 Most hospitals have acquired most physician-owned practices as hospital outpatient clinics, meaning they might be ineligible per Part B billing, which could lead to a 15% loss in reimbursement of “incident to,” forcing most claims to be billed directly by a physician, adding to the concerns over the hidden value of PAs.1 Nonetheless, there is an inherent value to the services PAs provide.
Researchers in the fields of labor, education, and organizational studies have been able to test some of the cornerstones of applied economics, such as substitution, complementarity, teamwork, opportunity costs, and productivity, due to the introduction of PAs into multiple settings.2 The results of more than four decades of research show that PAs are at least as productive as doctors in terms of annual outpatient visits, create about 2.4 times their salary in revenue, and can perform about 85% of the breadth of primary care jobs that doctors perform.3 The opportunity cost of producing a PA is roughly 20% that of a doctor, and they contribute to society for about six years before a doctor is working independently after training.3 Even while a PA cannot be considered a doctor and should not be treated as one, they do provide a service that would otherwise be unavailable without a doctor.
Physician Assistant work in multiple settings, and for those working for the federal government as a contractor conducting compensation and pension exams for active-duty service members, the economic value is evident. This student works as a federally contracted Veteran Affairs PA, the primary role being to evaluate veterans for their compensation after leaving active-duty military service. The student helps generate significant revenue, approximately $1200 per patient for the organization, directly paid from the federal government, implying the economic value of PAs. The research evidence and practice experience shared in this discussion conclude that PAs possess an inherent economic value for healthcare institutions.
References
Horak S, Mathews W. Quantifying the Economic Value of a Physician Assistant in Orthopaedics: A Revenue-Based Comparison of Postoperative Care of a Physician Assistant Versus Surgeon. JBJS Journal of Orthopaedics for Physician Assistants. 2020 Jul 1;8(3):e19.
van Den Brink GT, Hooker RS, Van Vught AJ, Vermeulen H, Laurant MG. The cost-effectiveness of physician assistants/associates: A systematic review of international evidence. PLoS One. 2021 Nov 1;16(11):e0259183.
Hooker RS, Cawley J, Everett C. Economic assessment of physician assistants. ResearchGate. 2019. https://www.researchgate.net/publication/343236713_ECONOMIC_ASSESSMENT_OF_PHYSICIAN_ASSISTANTS
