On Medicaid reimbursement rates and the main alternative

New research presented in the August edition of Health Affairs elicited this headline from news outlets: In 2011 nearly one-third, or some 31 percent, of doctors wouldn’t take new Medicaid patients. The author of the paper, Sandra Decker:

I used data on office-based physicians from the 2011 National Ambulatory Medical Care Survey Electronic Medical Records Supplement to summarize the percentage of physicians currently accepting any new patients. Although 96 percent of physicians accepted new patients in 2011, rates varied by payment source: 31 percent of physicians were unwilling to accept any new Medicaid patients; 17 percent would not accept new Medicare patients; and 18 percent of physicians would not accept new privately insured patients.

Given the rhetoric towards Medicaid, I would’ve actually figured that 31 percent would be higher. Indeed the lower reimbursement rates, acceptance rates, and poorer health outcomes (which is indicative of the patients, not the care being administered) for Medicaid patients has been used to infer causality about Medicaid being worse than nothing. While the refusal rate is higher (and the health outcomes worse) than Medicare or private insurance, it has always struck me as silly to argue that such a reality is equatable to being worse than no coverage at all. But I digress…

Remember (pdf) though that Medicaid is primarily a program for the low-income children, their mothers, and pregnant women (and to lesser extent some elderly and a very, very small amount of childless adults). So when we’re talking about doctors not taking new patients it’s important to distinguish what types of doctors we’re looking at (chart via Avik Roy):

With the Medicaid demographics being what they are, it’s far more important that pediatricians and the OB/GYN field are accepting new patients – more so than psychiatrists and internal specialists. Only the OB/GYN category reaches the overall refusal rates. In favor of the “not-doomsday” assertion nearly 80 percent of pediatricians are still accepting children on Medicaid.

Moving on, and unlike previous studies, Decker breaks down the refusal information by state (graph also by Roy):

The bluer states are those that are accepting the least number of new patients, which also neatly correlates with lower reimbursement rates. Because Medicaid is jointly funded, states have significant influence over those rates. As Sarah Kliff reports:

Decker finds a positive correlation between Medicaid reimbursement rates and how many providers accept Medicare. In Wyoming and Alaska – largely rural states that pay Medicaid providers about 50 percent more than Medicare reimburses – the vast majority of providers accept Medicaid. In New Jersey – where reimbursement is the lowest – only about 30 percent say they’ll take new patients.

“Prior evidence suggests that physicians’ acceptance of Medicaid patients will increase as Medicaid payment rates increase,” Decker notes. “Evidence also suggests that this may increase the number of times that a Medicaid patient sees a physician and decrease reliance on hospitals for outpatient care.”

The fact that doctors in states that get paid less for Medicaid patients also accept fewer of those patients is not news. Turns out that even though doctors claim that financial incentives don’t matter for themselves (while overwhelming believing that matters greatly for other physicians), Medicaid seems to be the exception. To a lot of people, that might lead to the idea that we should increase reimbursement rates.

Then again, maybe not. While the Affordable Care Act includes a temporary two-year bump in Medicaid reimbursements (matching Medicare’s rates), there is no major longer-term reimbursement solution that I’m aware of coming from that corner of the political spectrum. On the other hand, the primary policy retort from the Republican party is to block-grant the program to save money – a policy that virtually guarantees either reductions in services, coverage, or provider payments. Realistically it would probably be all of the above. I’ve written about spending-reduction plans that include block-granting Medicaid before. In other words, beware those policy advocates whose aim is to reform Medicaid in such a way as to spend less money, cover fewer people (while offering fewer services) as a solution to low-reimbursement rates.

This isn’t to say that Medicaid doesn’t have it’s problems, but I have to shake my head at the idea that the some of those same people bemoaning the program’s issues are not also advocating making it worse. This dichotomy seems to show itself when someone like Avik Roy complains that the Medicaid expansion in the ACA will make it worse (my emphasis in bold):

Indeed, in the absence of permanent reform, states are continuing to reduce, not increase, their Medicaid fees. States can’t borrow money from China, the way the federal government does. States are already cutting back on education and infrastructure spending in order to feed the Medicaid beast. As Obamacare strives to add 17 million more people to the Medicaid rolls, this problem is going to get worse, not better.

Irrespective of the mentality that necessitates calling state Medicaid expenditures as ‘feeding the beast’, this is akin to advocating the absence of coverage as more preferable to expansion. Or as Aaron Carroll puts it (my emphasis in bold):

But the bottom line is that people are complaining that giving uninsured people Medicaid is a bad idea. Fine. Many of those same people didn’t want to give uninsured people private insurance in the exchanges, though, because that cost more. So now, when they argue against giving them Medicaid, they are essentially arguing for giving them nothing. At least for today. Sure, they’ll wave their hands at vague plans for somehow insuring the poorest among us, but I have not yet seen any comprehensive plan put forward in Congress with any real level of support that allows people in this socio-economic spectrum to be privately insured to the level that Medicaid covers.


4 responses to “On Medicaid reimbursement rates and the main alternative

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