Various contract settings and their impact on the cost of medical services

OBJECTIVES: This study analyzes the effect of outsourcing healthcare on career soldiers in the Israel Defense Forces (IDF) in different settings, so as to develop a model for predicting per capita medical costs METHODS: Demographic information and data on healthcare utilization and costs were gathered from three computerized billing database systems: The IDF Medical Corps; a civilian hospital; and a healthcare fund, providing services to 3,746; 3,971; and 6,400 career soldiers, respectively. Visits to primary care physicians and specialists, laboratory and imaging exams, number of sick-leave days, and hospitalization days, were totaled for men and women separately for each type of clinic. A uniform cost was assigned to each type of treatment to create an average annual per capita cost for medical services of career soldiers. RESULTS: Significantly more visits were recorded to primary care physician and to specialists, as well as imaging examinations by Leumit Healthcare Services (LHS), than visits and tests in hospitals or in military clinics (p < 0.001). The number of referrals to emergency rooms and sick-leave days were lowest in the LHS as compared to the hospital and military clinics (p < 0.001). The medical cost per capita/year was lowest in LHS as well. CONCLUSIONS: Outsourcing primary care for career soldiers to a civilian healthcare fund represents a major cost effective change, lowest consumption and lower cost of medical care. Co-payment should be integrated into every agreement with the medical corps.