Even $10 increase in Medicaid payments helps erase disparities in care access, study says

By | July 24, 2019

Dive Brief:

  • Financial incentives can influence who a physician decides to treat and their patients’ overall health, a study from the National Bureau of Economic Research found. Even a slight uptick in Medicaid reimbursement can improve school attendance as well, driving down the rate of chronic absenteeism.
  • The paper estimates that a $ 10 increase in Medicaid payments reduces patient complaints over doctors not accepting new adult patients by 13%.
  • Higher reimbursement also leads to greater usage. A $ 10 bump increased the likelihood that a patient saw a doctor in the past two weeks by 1.4%.

Dive Insight:

In looking at how to ease health disparities between the privately insured and the Medicaid population, researchers examined how tinkering with physician pay affected access to care.

It’s a particularly important question as nearly one in five Americans is covered by Medicaid. The program has an outsized influence on children — nearly half of all births are covered by the program and 83% of poor children are enrolled, according to the Kaiser Family Foundation.

The issue has become even more important in recent years. Coverage expansions at the state level under the Affordable Care Act have continued, and about three dozen states have adopted some form of expansion. Most now accept enrollees with incomes of up to 138% of the poverty level. Research like these new findings from NBER could help inform debates as holdout states debate expanding their programs.

Despite the prevalence of Medicaid, many members experience difficulty finding a doctor that accepts new patients.

“Understanding how physicians respond to financial incentives is key for designing policies to control health care costs while maintaining quality of care,” researchers said.

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The study examined the period before and after states were mandated by the federal government to increase Medicaid rates for certain primary care visits.

When the payment rate mandate expired and 34 states returned to previous pay levels, researchers Diane Alexander of the Federal Reserve Bank of Chicago and Molly Schnell of Northwestern University’s department of economics found the positive gains were lost.

“This suggests that many of the improvements in access, use, and health that Medicaid beneficiaries experienced when payments increased were lost when payments returned to their previous levels, providing clear evidence of the importance of reimbursement rates in driving physician behavior,” they wrote.

When comparing privately insured people to those with Medicaid coverage, the public program beneficiaries are almost “three times more likely to report being in fair or poor health, and children covered by Medicaid are twice as likely to be chronically absent,” the researchers found.

The report estimates what it would cost to erase the disparities between the privately insured and Medicaid beneficiaries. “It would take an increase in Medicaid payments of about $ 26 on average to eliminate disparities in access between children with private insurance and children with Medicaid,” the authors found.

However, they cautioned other factors could influence physician behavior.

“In the case of Medicaid, for example, payment delays, high denial rates, and complex patient needs may make treating beneficiaries unattractive regardless of relative payment levels,” the study noted.

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