Of all the examples of nonphysician provider scope of practice expansion in healthcare, one of the most vexing for physicians is independent practice by nurse practitioners (NPs). And while there is already a vast body of research on the topic, a study published earlier this year in American Economic Review—one of the most prestigious and influential peer-reviewed journals in the profession of economics—sheds new light on the issue by employing a sophisticated causal analysis, rather than the more simple correlative approach used by most other studies to date.
The study—“Productivity of Professions: Evidence from the Emergency Department”—compares emergency care provided by physicians to that of nurse practitioners with full practice authority by analyzing data from the Veterans Health Administration (VHA) on emergency department (ED) visits between January 2017 and January 2020, the period in which nurse practitioners were first authorized by the VHA to practice without physician supervision.
It clearly demonstrates that emergency care provided by nurse practitioners as compared with physicians results in higher costs, utilization of more services and lower quality of care. Among the key findings are that NPs:
- Increase patient 30-day preventable hospitalizations by 20% relative to the mean.
- Increase the cost of ED care by 7%, or about $66 per patient.
- Increase patient length of stay by 11%.
The analysis also found that, on average, nurse practitioners have lower productivity. For example, the study’s authors estimate that allocating one-quarter of ED patients from physicians to nurse practitioners would increase the VHA’s nonwage spending by $197 million per year, with a net cost of $129 million per year, compared with staffing the ED with only physicians. And this net cost occurs despite NPs’ salaries being about half of physicians’.
Read more about the study's results, and about how the AMA defends the practice of medicine against scope of practice expansions that threaten patient safety and undermine physician-led, team-based care.
The study was co-written by David C. Chan, MD, PhD, and Yiqun Chen, PhD, and uses a quasi-experimental design to compare emergency care provided by physicians with that of nurse practitioners who have full practice authority.
Dr. Chan is the Mark and Stephanie Robinson Chancellor's Chair, professor and faculty director of the Robinson Life Science, Business and Entrepreneurship Program at the University of California, Berkeley, Haas School of Business. He also is an investigator at the Department of Veterans Affairs, co-director of the VA Center for Policy Evaluation, and research associate at the National Bureau of Economic Research. Chen is an assistant professor of economics at the University of Illinois Chicago and a faculty research fellow at the National Bureau of Economic Research.
The AMA sat down with Dr. Chan to discuss how the study was designed; what he hopes physicians, administrators and policymakers will take from the findings; and what he thinks researchers ought to look at next to help improve understanding of the impacts of nurse practitioners' delivering care without physician supervision.
AMA: It’s unusual to find someone who has trained as a physician and also works as an economist. How did you come to combine those two professions?
Dr. Chan: I came from a medical family. My mom was a nurse, and my dad was a doctor, so I knew about the career of medicine and a lot of that appealed to me—being able to help patients.
But I've also always been drawn to larger forces in society, and when I was in medical school, it was obvious to me that to deliver healthcare as a society, we really need to get a handle on why things cost what they do, why policies are made, how is healthcare managed. So I was inspired to learn more about health policy.
I took two years off in the middle of medical school and studied in England, where my goal was to learn about how other countries organize their healthcare systems. I did a master's in economics and worked at the World Bank, and that opened up the world of economics to me. It was just fascinating. I discovered economics as a way to study important topics involving human behavior and institutions, and the more I learned about it, the more I learned that there's this rigor to it—its ability to identify the causal relationships and policy-relevant quantities we need to make better decisions.
I talk to young people who are interested in this path, and there's good reason why there aren’t hundreds of us running around—it's double training. But I think for a certain type of person who likes the rigor of economics and who is fascinated by humans and organizations and also likes the idea of modeling behavior, it makes a lot of sense. Medicine still occupies a very meaningful part of my life.
AMA: So how do you manage to do both?
Dr. Chan: I practice as a hospitalist at the Palo Alto VA Medical Center, where I see patients one week at a time, about six times per year. I don’t have the time to be a full-time hospitalist, but it's enough for me to stay engaged. And when I'm practicing medicine, I clear out my schedule because I want to be as focused as possible. It's intense when I’m on, and then when I’m not on, it allows me to do all the other things that I need to do as a professor, as a business school teacher, as an economist.
AMA: What kind of lens do you bring to health economics that might not be available to other economists or researchers who don’t have a physician background?
Dr. Chan: I’m very interested in individual behavior within care teams, the impact of professional training, government-provided care versus private care and other complicated, high-level issues, but I’m also interested in decision-making in the absence of a solid evidence base. As doctors, I think we know that we make a lot of decisions for which there is actually no evidence, but we do our best with the evidence that we have. So I want to understand how one can approach that question with some rigor.
There happens to be a field of decision theory that's connected to economics about how one makes decisions when there is not just statistical uncertainty but actual uncertainty, in the sense that no one knows. I want to apply this to the field of randomized controlled trials. They're obviously hugely useful and important, but there are gaps in our knowledge. A lot of my current research is about how one can design guidelines or rules that are robust to this lack of information.
AMA: Tell us about the design of this study. What drew you to the issue of scope of practice for nurse practitioners?
Dr. Chan: Part of it is that there's a growing overlap in the tasks that physicians and NPs perform. So it was interesting from both a policy perspective and a broader academic perspective to study two professions doing overlapping tasks. The VHA also had a unique opportunity to study this after granting NPs full practice authority.
We used the emergency department setting because it's very tractable empirically. There are high volumes of patients who are sometimes high acuity. Also, there’s a lot that you might not know about patients, but you can see that they are assigned to individual clinicians, be those NPs or physicians, in a way that can be studied.
So we entered this mostly from an academic perspective of variation in healthcare. We know that there's variation within the medical profession, but what could be more different than two separate professions performing similar tasks? Professions often act to define jobs that only they can do.
It was a pretty rare opportunity to study what happens to the care of a patient who is as good as randomly assigned to an NP versus a physician. There have been other papers that have studied NPs in healthcare, but most of them have asked: When a state allows NPs to practice independently, what happens to overall outcomes? That is not the same as asking: What happens if a patient is seen by an NP versus a physician? There are some papers that make that comparison, but often they don't have a feature where the patients are as good as randomly assigned.
Some older papers—more than a decade or two old—did randomize patients to NPs versus physicians, but they were generally pretty small studies and generally underpowered. They weren't able to look at this over multiple locations, and they weren't able to have the power to look at slices of data, such as whether the patient was complex. Also, they were in settings outside of the ED, mostly in primary care.
I think the most important thing to emphasize is the quasi-experimental variation that we used. It enabled us to have a relatively large sample and also establish causality, as opposed to just an association.
AMA: What are the key points that you think physicians should understand about what your research shows?
Dr. Chan: In the VHA setting that we studied, the patients randomly assigned to NPs have longer ED stays, higher ED spending and higher 30-day preventable hospitalization rates than comparable patients assigned to physicians.
But I would emphasize the nuance. This is not a statement that every physician outperforms every NP. One of the striking findings is that variation within professions is larger than the average difference between professions. Professional title is informative, but it is a coarse signal of productivity. Also, the NP-physician gap is smaller for less complex and less severe cases, which suggests that patient assignment and team design matter. NPs also appear to respond to uncertainty by ordering more tests and consults, which may be clinically understandable but has implications for cost and throughput.
AMA: Do you think your analysis is something that health systems, whether we’re talking about the VA or private health systems, should be doing? Do you think the issue is being overlooked by healthcare leaders?
Dr. Chan: I do. And I think one of the reasons for that is that it may not matter so much for a lot of health systems—the ones that are just fee for service, for example. They're not bearing the full cost of a patient coming back to the hospital, because they're being reimbursed for it. If we had more health systems that were rewarded for patient outcomes and total cost, they might have more incentives to look at the implications of teams and organization on their total costs.
That relates to another point too, which is that health systems know how much they're paying their providers—that is a cost that they're very much aware of. They might note that NPs have a lower wage than physicians do, but they might not pay attention to the larger figure for society. This issue has implications way beyond wages.
I think the meta point for policymakers is: What are the incentives for health systems? That affects what systems will measure and what they try to optimize for.
AMA: What further research do you think can or should be done to help improve our understanding of the cost, quality and other impacts of nurse practitioners delivering care independent of physician supervision?
Dr. Chan: In this paper we focus just on the ED, where patients are relatively sicker and more urgent and a very costly decision is whether to admit. If a patient comes back and is subsequently admitted, that too is very costly to the healthcare system. Future research should look at other settings, like urgent care and primary care.
Also, the gap in outcomes between NPs and physicians definitely relates to how complex the patient is—the gap is smaller when the patient is less complex—but our research might not generalize to the primary care setting, for example. That too goes to show that NPs’ scope of practice should be studied in other settings.
I would love to see some research comparing how more collaborative or team-based care settings compare with settings where NPs work alongside physicians independently. I really want to see how the organization of care matters.
I would also like to see if there is any intervention that can narrow the gap in outcomes—with further training or decision support, or whether collaboration or supervision helps.
Finally, what happens to access or wait times when patients are seen by NPs compared with physicians? That would help policymakers think about how to weigh any differences in performance between the two professions.
