• Peter Orszag’s physician access argument

    In a Bloomberg column yesterday, Peter Orszag made an argument against Medicare premium support I had not seen before. He cites research showing that as traditional Medicare’s market share grows, so does physicians’ willingness to accept Medicare patients. Reversing this, he argues that if premium support shifts patients out of traditional Medicare, physician access will shrink.

    How important is Medicare’s market share in influencing physician participation? The evidence is limited, but the best study to date suggests it is significant. In the 1990s, Peter Damiano, Elizabeth Momany, Jean Willard and Gerald Jogerst, all associated with the University of Iowa, surveyed Iowa physicians and examined variation among counties. They found that for each percentage-point increase in the share of Medicare beneficiaries in a county’s population, doctors were 16 percent more likely to accept patients on Medicare. The only other study I know of on this topic, an unpublished analysis by Matthew Eisenberg of Carnegie Mellon University, also found an effect from Medicare’s market share, albeit one that was substantially smaller than the one Damiano and his colleagues found.

    About 10 percent of the U.S. population is now enrolled in traditional Medicare, and an additional 5 percent has private Medicare plans. Let’s assume, for the sake of argument, that the Ryan [premium support] plan would cause another 5 percent of the population to shift, and to be conservative let’s cut in half the Damiano estimate of the impact from that reduction in Medicare’s market share. Then the chance that a doctor is willing to see traditional Medicare patients would be expected to decline by a whopping 40 percent. The share of doctors accepting Medicare would fall from about 90 percent to 54 percent.

    I have neither read the studies nor ever considered this angle before. Are there good counterarguments? One might be that Orszag is extrapolating out of sample. Not having read the studies, I can’t be sure. Any others? I don’t know (yet).


    • Yet another example of the benefits of market power.

      Single payer and a reduction in barriers to additional supply (e.g., licensing restrictions, limited med school slots. immigration restrictions, patent protection) would do wonders for pricing and access.

    • It seems that reduced negotiating power is the primary driver for reduced access and increased cost in a potential premium support system. If premium support is the choice the nation’s politics makes either now or in the future, I wonder if there is a way for the government to shore up negotiating power for the individual private plans through some sort of collective bargaining.

    • Aren’t there countermeasures the government could take? For example, could the Feds require as a condition of participating in any Part D Medicare plan (private insurance) that the provider also accepts Part A and Part B?

      None of this, by the way, implies that physicians have to take new patients with traditional Medicare. Even the 90% figure cited for current acceptance is misleading, since not all these docs are taking new Medicare patients, or are doing so selectively.

      • “could the Feds require as a condition of participating in any Part D Medicare plan (private insurance) that the provider also accepts Part A and Part B”

        I don’t understand this. Though there are some Part-B reimbursable drugs (injected drugs I think), the providers relevant to Part D (drug manufacturers) are not the same providers relevant to Parts A and B (hospitals, physicians, etc.).

      • Do you mean Part C (Medicare Advantage) plans, Jonathan?

        • Ah, that makes more sense. I don’t know if it is feasible to require a provider to accept all new patients. There are capacity limits. I guess it depends on what one means by accept. “Sure, you can come to the office. Our next open appointment is in 6 months.”

          • You might be able to enforce it something like fair housing laws in the rental market. Sure it’s legal to say “I can’t rent to you because all of the units are full” but if I can then prove that you rented to a white family the next week when you told a Latino family that all units were full then you are liable for discrimination penalties. Admittedly proving that is sometime difficult. However it would not be impossible to have mystery shoppers and similar approaches (that’s what’s often done in housing enforcement). Sure the provider can decline the Medicare patient because they are full, but then she cannot accept a private pay patient instead and going six months with a half-size patient panel is probably more costly than just accepting the Medicare patient in the first place.

            • Thanks, Sarah. Yes, I did mean Part C, not Part D, sorry.

              The solution you propose is stronger than the one I was thinking of. Right now a physician can accept Medicare (or any private commercial payer for that matter), but restrict the patients they see with that coverage to those already in their panel. Doctors, I think, have come to take for granted that they can do this, and it would be pretty disruptive to change that.

              I was thinking of something less disruptive: require doctors who accept one of the Part C plans to continue to serve their existing traditional Medicare patients and any existing patients (commercial or Medicare part C) who transition to traditional Medicare. But they wouldn’t have to take a brand-new traditional Medicare patient off the street if they don’t want to. Slightly weaker than your approach, and probably slightly easier to pass political hurdles.

              I believe it’s already true that if you take a certain coverage, commercial or government program, you are not supposed to privilege those with one of these coverages over others when it comes to making appointments. You can’t accept Medicaid, or Aetna, or Medicare and decide that you will only allow 1 hour a week for (current) patients with a given coverage but will schedule any free time for those with other coverages. I think that violates the contracts with the insurers. Can anyone confirm that?

    • Massachusetts tried to pass a law stating that all doctors in the state are forced to take any patient that shows up at their door, regardless of insurance status. They did this in the name of “increasing access” despite the fact that Massachusetts already has more doctors per capita than any other region in the world.

      Fortunately, it did not pass.