Growing Physician Access Problems Complicate Medicare Payment Debate

Originally published by the Center for Studying Health System Change (HSC). HSC was a nonpartisan policy research organization funded principally by the Robert Wood Johnson Foundation.

Growing Physician Access Problems Complicate Medicare Payment Debate

Issue Brief No. 55 | September 2002 | Sally Trude, Paul B. Ginsburg

Projected cuts in Medicare physician payments raised serious concerns that Medicare beneficiaries would lose access to needed physician services. An HSC study revealed growing access problems for both Medicare and privately insured patients. Difficulties were most pronounced when patients sought specialist care and in certain local markets. The findings suggested that proposals to boost Medicare fees across the board might prevent further deterioration for beneficiaries but were unlikely to address the broader, system-wide access problems that varied by specialty and geographic area.

Concerns About Access for Medicare Beneficiaries

The 5.4 percent cut in Medicare physician payments for 2002 and the prospect of additional reductions in coming years had raised alarm about beneficiaries' ability to find doctors. Congress was considering legislation to replace scheduled cuts with modest increases until a new payment system could be designed. HSC's Community Tracking Study data painted a clear picture of rising access problems across three key measures.

The share of Medicare seniors reporting that they delayed or did not get needed care rose from 9.1 percent in 1997 to 11.0 percent in 2001. A similar increase occurred among privately insured near-elderly (ages 50-64), climbing from 15.2 percent to 18.4 percent. Both groups were also waiting longer for appointments -- by 2001, more than a third of Medicare seniors waited over three weeks for a checkup, and a comparable share waited more than a week to see a doctor for a specific illness. The proportion of physicians accepting all new Medicare patients fell from 74.6 percent to 71.1 percent, while acceptance of new privately insured patients also declined.

Access to Specialist Care Declines

The Balanced Budget Act of 1997 made three substantial changes to Medicare specialist payments: replacing separate conversion factors with a single factor, adjusting work relative value units, and transitioning to new practice expense values. As a result, average payments for all physicians rose about 7 percent from 1998 to 2002, but payments fell 14 percent for cardiac surgeons and 10 percent for thoracic surgeons. Surgeons' willingness to accept all new Medicare patients dropped from 81.5 percent to 73.0 percent during 1997-2001, while medical specialists showed a slight increase. Appointment delays with specialists had become particularly troublesome -- roughly half of Medicare seniors had to wait at least three weeks for a specialist checkup.

Market Variation and Policy Implications

Access problems varied considerably by community and could not be captured by a single measure. In Seattle, physician willingness to accept new Medicare patients fell from 71 percent to 55 percent, yet Seattle still ranked highest on other access measures -- only 8 percent of its Medicare beneficiaries reported delaying care. Boston, by contrast, ranked high on physician acceptance but had some of the longest appointment delays. Private insurer payment rates relative to Medicare also varied widely across markets, further complicating the picture.

Because both Medicare and privately insured patients were experiencing growing access difficulties, policymakers should not expect Medicare payment policy alone to solve the problem. The access declines observed over four years might relate to non-Medicare factors such as changing patient demand, shifts in private insurance, the local supply of physicians, and market-specific conditions. Medicare's national payment formula was likely too blunt an instrument to address access problems that varied by specialty and community. Policymakers also needed to monitor access for the privately insured alongside Medicare to avoid misattributing system-wide problems to Medicare policy.

Sources and Further Reading

Kaiser Family Foundation -- Employer Health Benefits Survey -- Annual data on employer-sponsored health insurance.

Health Affairs -- Peer-reviewed health policy research.

Robert Wood Johnson Foundation -- Health policy research and programs.

Commonwealth Fund -- Research on health care coverage.