TY  - JOUR
AU  - Goldman,Fred
AU  - Grossman,Michael
TI  - The Production and Cost of Ambulatory Medical Care In Community Health Centers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 907
PY  - 1982
Y2  - June 1982
UR  - http://www.nber.org/papers/w0907
L1  - http://www.nber.org/papers/w0907.pdf
N1  - Author contact info:
Fred Goldman
10 West 66th Street, Apt 6A
New York, NY 10023
Tel: 212/595-7110
Fax: 212/579-2977
E-Mail: fred.goldman@gmail.com

Michael Grossman
Ph.D. Program in Economics
City University of New York Graduate Center
365 Fifth Avenue, 5th Floor
New York, NY  10016-4309
Tel: 212/817-7959
Fax: 212/817-1597
E-Mail: mgrossman@gc.cuny.edu
AB  - An assessment of the efficiency of Federally funded community health centers (CHCs) in delivering ambulatory medical care to poverty populations reveals that the centers' input decisions reflect departures from cost-minimizing behavior. In particular, they employ too few physician aids (nurses and physician assistants) relative to primary care physicians and too many medical support and ancillary personnel relative to primary care physicians. The CHC system-wide cost reduction due to the elimination of allocative inefficiency is estimated at $32 million in 1978 dollars or 6 percent of total cost. This modest cost reduction and evidence that allocative inefficiency is not more widespread among CHCs than among private sector physicians seriously question the conventional wisdom that services in the public sector are produced less efficiently than in the private sector. Support is also reported for the hypothesis that, since grants are not tied to particular services rendered, centers who derive most of their revenue from this source relative to Medicaid and private insurance have a greater incentive to provide a given mix of services in the least-cost method.
ER  -