Healthcare Business News
Fang He, researcher

Medicaid expansion won't bury docs: report

By Andis Robeznieks
Posted: March 29, 2013 - 1:00 pm ET

If history is a guide, the expansion of Medicaid coverage will not overwhelm the nation's physicians as some have feared, according to a report in the Medicare & Medicaid Research Review.

That's the opinion of researchers from the Government Accountability Office and the Washington-based Center for Studying Health System Change who found that the creation of the Children's Health Insurance Program in 1997 did not create a deluge of patients that the nation's pediatricians couldn't handle.

Using state-level data on CHIP enrollment and pediatricians' self-reported annual work hours, researchers Fang He and Chapin White conclude that, in states with larger CHIP expansions, pediatricians actually reduced their work hours compared to states with smaller expansions of the program. In fact, they found that a 5% increase in the share of children enrolled in CHIP was associated with a 14% decline in pediatrician work hours.

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Chapin White, researcher
“These findings are clearly inconsistent with the hypothesis that physicians will work longer hours to accommodate an influx of demand following a coverage expansion,” He and White wrote. “What is less clear is whether the association we find is causal and, if so, why pediatricians would actually work fewer hours in response to a coverage expansion.”

They speculate that there could be two reasons: CHIP reduced average reimburse rates for pediatricians that led them to reduce their hours; or, the shorter hours are a reaction to the managed-care nature of CHIP and its gatekeeper mechanisms.

Assumptions that healthcare is a demand-driven model in which physicians provide the volume of service patients demand “rest on very shaky ground,” the report stated. In contrast, a supply-driven model includes physicians treating patients with a variety of insurance arrangements and tailoring their practices to the financial incentives those arrangements create. The researchers cite a 2009 finding that reimbursement for an office visit for a child on private insurance was $81 compared to $47 for a child enrolled in Medicaid or CHIP.

They acknowledge, however, that work-hour data could also reflect an increase in pediatricians working part-time—which they speculate could be explained by both an increase in the female pediatrician workforce as well as the expansion of CHIP. There is also speculation that CHIP has led to shorter visit times, but the researchers wrote that this hypothesis cannot be tested by the available data.

Also, they note that the upcoming expansion of coverage under the Patient Protection and Affordable Care Act differs from CHIP in that it involves a corresponding temporary increase in Medicaid pay rates as well as the promise of expanded private insurance coverage through health insurance exchanges and the penalties that will be imposed on those with no coverage.

He and White recommend that, instead of looking at the number of newly insured, projections on physician availability under the Affordable Care Act should focus on the financial incentives physicians will operate under as “the implications of large coverage expansions for system wide health spending is not as obvious as it would first appear.”

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