Get access

Are Primary Care Services a Substitute or Complement for Specialty and Inpatient Services?


  • John C. Fortney,

    Search for more papers by this author
    • Address correspondence to John C. Fortney, Ph.D., VA HSR&D CeMHOR (152/NLR), Central Arkansas Veterans Healthcare System, 2200 Fort Roots Drive, North Little Rock, AR 72114. Dr. Fortney, and Diane E. Steffick, Ph.D., are with Health Services Research and Development, Center for Mental Health and Outcomes Research, Central Arkansas Veterans Healthcare System, North Little Rock, AR and are also with the Division of Health Services Research, Department of Psychiatry, College of Medicine, University of Arkansas for Medical Sciences, Little Rock, AR. James F. Burgess Jr., Ph.D., is with the Management Science Group, Department of Veterans Affairs, Bedford, MA and also with the School of Public Health, Boston University, Boston, MA. Matt L. Maciejewski, Ph.D., is with Health Services Research and Development, Northwest Center for Outcomes Research in Older Adults, VA Puget Sound Health Care System, Seattle, WA and also with the Department of Health Services, University of Washington, Seattle, WA. Laura A. Petersen, M.D., M.P.H., is with Health Services Research and Development, Houston Center for Quality of Care and Utilization Studies, Houston VA, Houston, TX and also with the Section of Health Services Research, Baylor College of Medicine, Houston, TX.

  • Diane E. Steffick,

  • James F. Burgess Jr.,

  • Matt L. Maciejewski,

  • Laura A. Petersen

  • This research was previously presented at the AcademyHealth Annual Research Meeting, San Diego, June 6–8, 2004.


Objective. To determine whether strategies designed to increase members' use of primary care services result in decreases (substitution) or increases (complementation) in the use and cost of other types of health services.

Study Setting. Encounter and cost data were extracted from the Department of Veterans Affairs (VA) administrative data sources for the period 1995–1999. This timeframe captures the VA's natural experiment of increasing geographic access to primary care by establishing new satellite primary care clinics, known as Community-Based Outpatient Clinics (CBOCs).

Study Design. We exploited this natural experiment to estimate the substitutability of primary care for other health services and its impact on cost. Hypotheses were tested using ordinary least squares (OLS) regression, which was potentially subject to endogeneity bias. Endogeneity bias was assessed using a Hausman test. Endogeneity bias was accounted for by using instrumental variables analysis, which capitalized on the establishment of CBOCs to provide an exogenous identifier (change in travel distance to primary care).

Data Collection. Demographic, encounter, and cost data were collected for all veterans using VA health services who resided in the catchment areas of new CBOCs and for a matched group of veterans residing outside CBOC catchment areas.

Principal Findings. Change in distance to primary care was a significant and substantial predictor of change in primary care visits. OLS analyses indicated that an increase in primary care service use was associated with increases in the use of all specialty outpatient services and inpatient services, as well as increases in inpatient and outpatient costs. Hausman tests confirmed that OLS results for specialty mental health encounters and mental health admissions were unbiased, but that results for specialty medical encounters, physical health admissions, and outpatient costs were biased. Instrumental variables analyses indicated that an increase in primary care encounters was associated with a decrease in specialty medical encounters and was not associated with an increase in physical health admissions, or outpatient costs.

Conclusions. Results provide evidence that health systems can implement strategies to encourage their members to use more primary care services without driving up physical health costs.