Stable physician Medicare participation may represent anunstable system
Physician Acceptance of New Medicare Patients Stabilizes in 2004-05
By Peter J. Cunningham, Andrea Staiti, Paul B. Ginsburg
Center for Studying Health System Change
January 2006
Despite an earlier Medicare payment rate reduction, the proportion of U.S. physicians accepting Medicare patients stabilized in 2004-05, with nearly three-quarters saying their practices were open to all new Medicare patients, according to a new study by the Center for Studying Health System Change (HSC).
Only 3.4 percent of physicians reported that their practices were completely closed to new Medicare patients in 2004-05, also statistically unchanged from 2000-01.
In fact, Medicare beneficiaries’ access to primary care physicians increased between 2000-01 and 2004-05, reversing an earlier decline. Among privately insured patients, trends in physician access are similar to those for Medicare patients, suggesting that overall health system dynamics have played a larger role in physician decisions about accepting Medicare patients than have Medicare payment policies.
Implications
… physicians likely consider Medicare payment rates in the context of what they receive from other payers, especially private insurers. In this context, Medicare payment as a percentage of private insurer payments has increased substantially in the past 10 years, from about 71 percent on average in 1996 to 81 percent in 2003. And Medicare fees are still much more generous than Medicaid fees, despite the fact that Medicaid fees increased relative to Medicare between 1998 and 2003-from 64 percent of Medicare in
1998 to 69 percent in 2003.
Given rapidly rising private insurance premiums, private payers’ pressure to keep physician payment rate increases to a minimum is likely to continue. In addition, continued decreases in the number of privately insured Americans, along with increases in the number of people with Medicaid or who are uninsured, may make it increasingly difficult for physicians to substitute higher paying privately insured patients for Medicare patients.
Perhaps the greater risk is not that stagnant Medicare payment levels will reduce Medicare beneficiaries’ access to physicians, but that continued financial pressure from all payers and declining incomes will compel physicians to limit patients that generate the least revenue, especially Medicaid and uninsured patients.
http://www.hschange.org/CONTENT/811/#ib5
Comment: We frequently hear that we will see a mass exodus of physicians from the Medicare program because of the failure of Medicare rates to keep up with the increase in overhead expenses (and expected profits) for physician practices. We haven’t seen that exodus, and that may be due to the fact that private insurers have slowed their rate increases even more than Medicare, reducing the price differential that might motivate physicians to replace Medicare patients with privately insured patients. Also, with the decline in employer-sponsored coverage, there are fewer privately insured patients to fill the void that would be created by eliminating Medicare patients.
Ironically, the market response of the private insurance industry has protected access for patients in the public Medicare program, obviously benefiting Medicare patients. So how could this be bad news? With both Medicare and the private insurers placing greater restraints on the profit potential of patients, physicians must maximize the utilization of their time and resources. That would normally be desirable except for one major factor. They are forced to reduce their time allotment for charitable services provided to uninsured patients and for the uncompensated portion of costs of providing care to Medicaid patients. Access for these individuals is already significantly impaired and can only grow worse with current trends.
Under a single payer system, physicians would be granted the right to negotiate adequate rates that would cover their costs and provide fair profits. As a transparent process, it would be fair for physicians and fair for taxpayers who fund the system.
Why would taxpayers agree to fair compensation for physicians? When they are sick, they don’t want to try to obtain care from an overworked, underpaid malcontent who doesn’t have the time to see them. They want the field of medicine to continue to attract some of the most qualified candidates that society has to offer. Our fragmented system of funding care has placed that goal at risk.