Payments to Physician Practices and Incentives to Serve Different Racial and Ethnic Groups

Area of Science:

• Health Economics
• Health Services Research
• Health Disparities Research

Background:

• Physician reimbursement in the US varies significantly based on patient demographics, even for identical services.
• Understanding financial incentives is crucial for developing policies to reduce health disparities linked to race and ethnicity.

Purpose of the Study:

• To measure racial and ethnic disparities in per-visit payments to physician practices.
• To quantify the influence of health insurance and other factors on these payment disparities.

Main Methods:

• Analysis of a nationally representative dataset of outpatient visits (2014-2021).
• Inclusion of patient race/ethnicity and payment data, adjusted for visit content, geography, and year.
• Utilized Kitagawa-Oaxaca-Blinder decompositions to analyze payment gaps.

Main Results:

• Physician practices received 8.8% less for visits with non-Hispanic Black patients and 9.8% less for visits with Hispanic patients compared to non-Hispanic White patients.
• Payment disparities were most pronounced in pediatrics (over 13% lower for Black and Hispanic children).
• Insurance source partially explained disparities, which were absent among patients with fee-for-service Medicare.

Conclusions:

• US physician practices are paid less for outpatient visits involving non-Hispanic Black and Hispanic patients compared to non-Hispanic White patients.
• These payment disparities, especially in pediatrics, may be influenced by insurance type and could worsen health inequities.
• Addressing financial incentives is vital for promoting equitable healthcare access and quality.