Hospital outpatient services and Medicaid patients' access to care

This article examines the relationship between the use of hospital outpatient services by Medicaid patients, Medicaid physician fees, and the use of office-based physician services. Past research has indicated that the use of outpatient facilities by Medicaid patients substitutes for care by private physicians and might be reduced by raising physician fees, but these studies may be estimated at too high a level of geographic aggregation and include many outpatient services that are not substitutes for office-based physician care. The results in this study, which are estimated using LISREL on county level Medicaid claims data from the state of Illinois, provide little evidence that outpatient care substitutes for care by physicians or that raising physician fees would reduce inappropriate outpatient usage by medicaid patients.