On Friday, I suggested that the 29.4 percent cut in fees for doctors who treat Medicare patients — one of the main sources of savings in Obamacare — may result in fewer doctors willing to treat Medicare patients or in Medicare patients receiving lower quality care. In this new paper, “The Doctor Might See You Now: The Supply-Side Effects of Public Health Insurance Expansions,” Prof. Craig Garthwaite of the Kellogg School of Management at Northwestern University studies that exact question.
In order to estimate how PPACA will affect physician behavior, Garthwaite looked at the State Children’s Health Insurance Program (SCHIP), which, like PPACA, represented a large increase in the number of Americans receiving public health insurance coverage. His findings confirm the prediction that the expansion of public health insurance programs will likely lead to a decrease in the quantity of medical services provided by physicians even though it increases physicians’ participation.
Following the implementation of SCHIP, pediatricians with little previous participation in the Medicaid program decreased the number of weekly hours spent on patient care. Evidence from the NAMCS suggests that physicians’ labor supply decrease plays out through shorter visits with each patient. Overall, the introduction of new public health insurance programs may simply change the nature of patient physician interactions—for example, physicians could rely on physician assistants and registered nurses to provide more basic medical services. Additional research is needed to investigate the welfare effects of the program change.
Why does this matter?
Results from this paper can help economists and policymakers understand physician responses to policy changes such as the public health insurance expansion contained in the recently-passed PPACA in the United States. While many policies are being implemented simultaneously in the PPACA, results from my current study suggest that the effect of the public insurance expansion-related changes should increase physician participation in the program but lower physician labor supply. This information should be integrated into any analysis of the overall effect of the legislation.
An interesting side note: Many states implemented SCHIP through the expansion of income limits for the existing state Medicaid program. The paper has some good data and references about how doctors responded to the increase in Medicaid eligibility:
Cunningham and May (2006) [link to the paper here] found that from 1996 to 2005 the percentage of physicians reporting no Medicaid patients (as defined by practice revenue) increased by 13 percent. Over the same time period, the percentage of physicians reporting that they were not accepting new Medicaid patients increased from 19.4 to 21 percent. The increase was largest for physicians who reported receiving little revenue from Medicaid.
What this means is that any additional negative effects of decreased physician labor supply following the implementation of the PPACA are likely be worse for Medicaid patients. These patients are covered by a program that already increasingly isn’t accepted by doctors.
That's all real nice and no doubt true...as far as it goes. But in a country where you can be forced to buy health insurance it's not much of a stretch to suppose that they can force doctors to take Medicaid and Medicare patients.
"Real nice medical degree you have there. be a shame if anything were to happen to it."
Reply to this commentLinkReport Abuse"physicians could rely on physician assistants and registered nurses to provide more basic medical services."
But isn't this a good thing? I think any rational scheme would encourage more, not less, of this. The only thing keeping doctors seeing so many patients are archaic regulations, largely encouraged by doctor groups. Ideally, you'd get rid of that by getting rid of the regulation, and people would react to different prices charged by PAs versus docs. Either way, it's something that needs to happen.
Reply to this commentLinkReport AbuseVeronique,
The obvious solution is to make acceptance by doctors of all Medicare patients a condition for maintaining a license to practice.
The US economy is on a glide path to totally tanking. Physicians could not abandon practicing medicine in protest. Where would they go? What else would they do? They only know one thing. When there are no alternatives, there is no problem.
Moreover, American scientists are getting crushed by the vise of H1-B immigrant insourcing that the Crony Capitalists love and direct outsourcing of R&D to Asia. Which the Crony Capitalists love even more.
Plenty of those unemployed native born American PhD's have the intellectual capabilities to become physicians. From their PoV, doing medicine for Medicare reimbursement is still better than flipping burgers. Cross train them in medicine and any physician shortage goes away.
Nobody except the Wall Street Banksters, Military-Security Gamers and Beltway Politicos is immune from America's dissolution.
Reply to this commentLinkReport AbuseSteveM
Since the introduction of so-called "Obamacare" I have argued that one of its main objectives is to tie the receipt of a license to practice of medicine to the acceptance of CMS patients at no matter the remuneration rate as offered by CMS.
My colleagues in medicine had heretofore all-but laughed this off, but no longer.
Some have argued that there is no constitutional proviso for such a quid-pro-quo. My response has been that if the commerce clause can allow for the federal government to force the purchase of health insurance (the so-called mandate) - so too can the government force the provision of medical care by practitioners - I see no difference in the logic or scope of the former with the latter.
And yes, if CMS cuts its Medicare reimbursement by 30% there will be a very rapid and severe drop of CMS providers until the federal government forces the change.
In the meantime - many docs will retire - others will stop seeing patients in the hospital - others will limit their overall workload (not increase it) as the rate of return will reach the diminishing point quickly.
Better hope that either congress, the courts, or a new POTUS steps in before it's too late.
Reply to this commentLinkReport AbuseMaking acceptance of Medicare mandatory will not work. Can anyone even attempt a solution of a public policy question that does not begin with "requires," "mandates," "prohibits," etc.? If resorting to the coercive power of the state is the Holy Grail of public policy questions then why not just outlaw the problems?
If you try to mandate that Doctors take Medicare patients here's what will happen: Physicians will regulate their practice mix the same way Canada tried to control its healthcare costs: with queues. Wait times for appointments will become increasingly long, as physicians manipulate their schedules to favor privately insured patients. Seniors will also get fobbed off on physician extenders, and not necessarily physicians assistants and advanced practice nurses, but medical assistants and "triage" nurses. Next, primary care physicians will discover that it is more cost effective for them to care for patients who are not very sick. It is more remunerative and less stressful to see thirty uncomplicated problems a day than it is 12 complex ones. As a result, primary care physicians will increasingly turf low to moderate complexity patients to specialists, and the queues will get even worse. More patients will be referred to emergency departments for subacute problems.
Mandating physicians to take Medicare patients is also fraught with practical problems. There is a limit to the number of active patients that a physician can properly care for. How does he close his practice to new patients if the government can force Medicare patients upon him? Or how does she fire patients whose therapeutic goals differ from hers? If physicians are forced to take Medicare patients, when does the physician/patient relationship begin, when the physician agrees to assume care for the patient or when the patient assumes that the physician will care for him because Medicare says he has to? Some patients have disease complexes that are more appropriate to some physicians than others (like patients with underlying psychiatric illnesses, or dementing diseases). If a physician defers care of these patients, will his license be at risk for refusing to see Medicare patients? Who will enforce this?
Not to mention that medical licenses are issued by states, not the federal government. There are likely to be Constitutional challenges to what is in effect a federal scheme to license physicians.
The biggest problem though is that most physicians regard caring for indigent or "break even" patients as a professional obligation, that they accommodate in consideration of the financial realities of medical practice. They allocate their resources to these patients based on the realities of their practice environments, not the policy aspirations of remote functionaries. Allowing bureaucrats to meddle in the professional obligations of physicians because those bureaucrats are out of ideas to fix problems that they created, is a very bad idea.
Reply to this commentLinkReport AbuseSince when is the government logical? The Feds can easily enforce licensing compliance on the states by using the tried and true tactic of withholding funds. (I think outside of government that's called extortion. But whatever...)
The point is that death spiral Cram Downs are going to happen in every sector of our sclerotic American economy. Who says doctors should be immune? I mean thousands of very smart PhD scientists who used develop the drugs that doctors prescribe are pounding the pavements.
Sure physicians will game mandatory Medicare acceptance. It will be just another shell game. Happens all the time when the government pulls strings. But that doesn't mean the Leviathan hammer won't come down on doctors.
P.S. About the Cram Downs, Wall Street Banksterism, Beltway Hucksterism and the Military-Security Complex where too much is never enough will be immune till the very end.
P.P.S. Funny about thinking the US can fix Iraq and Afghanistan when it can't even fix Detroit.
Reply to this commentLinkReport Abuse"The obvious solution is to make acceptance by doctors of all Medicare patients a condition for maintaining a license to practice."
Why stop there? Why not require 10 weeks a year government clinic service at minimum wage? I mean, if you plan to steal a man's labor, do it right!
Of course, while you may have the current crop of doctors available, good luck replacing them once the profit goes out of it. I mean, why bother going to school and training for 12 years and amassing a quarter million in debt when this sort of thing waits for you?
Reply to this commentLinkReport AbuseOr flip burgers with your 136 IQ and limitless self-absorption.
Pick one...
Reply to this commentLinkReport AbuseTotally. Because prospective doctors would love to incur hundreds of thousands in student debt and take on nearly a decade of medical training in order to be forced to make peanuts. Great incentive structure!
Imagine if people in Singapore or Hong Kong had this mindset. They'd be economically dead in the water instead of the raging success stories they are.
Reply to this commentLinkReport AbuseFlip Burger?
More likely, just ignore medicine while an undergrad and head into some other field. You are out quicker with a lower debt load.
Most engineering fields pay pretty well and more sciences can get your graduate work paid for you.
Reply to this commentLinkReport AbuseI just heard it on the radio that "Penny Health Insurance" can offer health insurance for just $1 a day any one aware of this ? have anyone purchased insurance through them. I did search for them and found them online.
Reply to this commentLinkReport AbuseI tried to reply, "Who is John Galt?" to all this talk about Medicare mandates but it didn't pass the test. I guess I can expand a bit and ask this, instead: if the government can force a physician to provide a service at a below-market rate because it's in the "national interest," what industry is safe?
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