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Monitoring access following Medicare price changes: physician perspective
1Office of Research and Demonstrations, Health Care Financing Administration.
Abstract:
In this article, the author examines changes in Medicare beneficiaries' access to services following the Omnibus Budget Reconciliation Act of 1987 "overpriced" procedure price reductions from the physician perspective. Three measures of physician availability remained essentially constant: number of physicians treating beneficiaries or performing overpriced procedures; average Medicare caseload; and average share of a physician's Medicare practice comprised of those who are poor and not white. Physician practice characteristics were examined and provided evidence of continuing participation in Medicare: Average Medicare revenue increased 10 percent, and average volume of all services increased. However, physicians with the largest fee reductions or who were the most financially dependent on the procedures did not change overpriced procedure volume.
Insights
Physician participation in Medicare remained stable after 1987 price reductions, with consistent physician numbers and caseloads. Despite revenue increases, physicians most affected by fee cuts did not alter their volume of reduced-price procedures.
Area of Science:
- Health Economics
- Medical Policy
Background:
- The Omnibus Budget Reconciliation Act of 1987 introduced significant reductions in Medicare reimbursement for certain "overpriced" procedures.
- Understanding the physician perspective on access to care and practice changes following these policy shifts is crucial for healthcare policy evaluation.
Purpose of the Study:
- To analyze the impact of Medicare "overpriced" procedure price reductions on physician access to services from the physician's viewpoint.
- To assess changes in physician availability, caseloads, and practice composition following the Omnibus Budget Reconciliation Act of 1987.
Main Methods:
- Examination of three key measures of physician availability: number of physicians treating Medicare beneficiaries, average Medicare caseload, and the proportion of Medicare patients who are poor and non-white.
- Analysis of physician practice characteristics, including average Medicare revenue and overall service volume.
- Investigation into whether physicians experiencing the largest fee reductions or highest financial dependence altered their volume of "overpriced" procedures.
Main Results:
- Physician availability metrics, including the number of physicians treating beneficiaries and average caseloads, remained largely unchanged.
- Physician practice characteristics indicated continued Medicare participation, with a 10% increase in average Medicare revenue and overall service volume.
- Physicians who faced the most substantial fee reductions or were most financially reliant on these procedures did not decrease their volume of "overpriced" procedures.
Conclusions:
- The 1987 Medicare price reductions did not significantly deter physician participation or alter overall practice patterns.
- Physicians absorbed fee reductions without changing their volume of targeted procedures, suggesting a complex response to reimbursement changes.
- Continued physician engagement with Medicare services indicates resilience despite policy-driven financial adjustments.