DMI Blog

Ronda Kotelchuck

New Study Finds All Primary Care Providers Initially Lose Money on Every Patient Visit

A new study released on Friday by the Primary Care Development Corporation and RSM McGladrey found one of the more disturbing facts to come out of the primary care debate in some time. Although we have known for years that primary care providers have been struggling just to break even, for the first time we were able to quantify data that showed that all primary care providers in New York City lose money on every patient visit, leaving them to scramble to make up for the reimbursement shortfalls.

The initial losses vary depending on the type of provider, but our data shows that the losses range from a low of $28 to as much as $226 per patient visit on primary care delivery.

For those of you who are wondering how these providers keep their doors open with these enormous losses, primary care provides are forced every year to try to “plug the holes” through every public and private grant or subsidy they can find. By itself, the demanding bookkeeping effort necessary to chase down these funds, in addition to the tangled web of paperwork that varies from provider to provider and even from patient to patient, create a huge administrative burden on providers and distracts from patient care.

For decades, experts in primary care and the healthcare industry have known that the reimbursement system for primary care providers was absurd. But for the first time, this study has enabled us to see the precise absurdity of the system in clear and quantifiable terms.

For an example of the irrational nature of our system, payors (such as Medicaid or commercial insurers) reimburse primary care providers differently for the same exact services. This means that even though providing a physical for a patient will probably cost any given provider around $200, the provider could be reimbursed $125 by Medicaid but only $65 by a commercial insurer.

That’s not all. Let’s say the patients were getting their physical at a hospital’s primary care center. These patients could walk across the street to a community health center and get the exact same physical, but the health center would be reimbursed a different amount by the payors merely because the patients were in a different building.

If this is confusing to you, imagine the frustration primary care providers feel every day when they are forced to navigate the labyrinths of our primary care reimbursement system.

Fortunately, there is a way out of this. In a future post, I will discuss what we found to be the best reforms possible to solve this crisis in primary care.

To read the executive summary or the entire report, go to

Ronda Kotelchuck: Author Bio | Other Posts
Posted at 1:00 PM, Dec 10, 2007 in Health Care
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