Effects of changes in incomes and practice circumstances on physicians' decisions to treat charity and Medicaid patients

CONTEXT: The decline over the past decade in the percentage of physicians providing care to charity and Medicaid patients has been attributed to both financial pressure and the changing practice environment. Policymakers should be concerned about these trends, since private physicians are a major source of medical care for low-income persons. This study examines how changes in physicians' practice income, ownership, and size affect their decisions to stop or start treating charity care and Medicaid patients. METHODS: This study uses panel data from four rounds of the Community Tracking Study Physician Survey. The dependent variables are the likelihood of physicians' (1) dropping charity care, (2) starting to provide charity care, (3) no longer accepting new Medicaid patients, and (4) starting to accept new Medicaid patients. The primary independent variables are changes in physicians' practice income, ownership, and practice type/size. Multivariate analysis controls for the effects of other physician practice characteristics, health policies, and health care market factors. FINDINGS: A decline in physicians' income increased the likelihood that a physician would stop accepting new Medicaid patients but had no effect on his or her decision to provide charity care. Those physicians who switched from being owners to employees or from small to larger practices were more likely to drop charity care and to start accepting Medicaid patients, and physicians who made the opposite practice changes did the reverse. CONCLUSIONS: Changes in their income and practice arrangements make physicians less willing to accept Medicaid and uninsured patients. Moreover, physicians moving into different practice arrangements treat charity and Medicaid patients as substitutes rather than as similar types of patients. To reverse these trends, policymakers should consider raising Medicaid reimbursement rates and subsidizing organizations that encourage private physicians to provide charity care.     

Uncompensated care provided by private practice physicians in Florida.

While a great deal of attention has been paid in recent years to establishing the magnitude and characteristics of uncompensated care in hospitals, comparatively little research has been undertaken to study physician uncompensated care. This article reports the results of a prospective patient-specific study of uncompensated care in Florida. Of 4,042 cases examined, 26.2 percent had charges voluntarily reduced below the usual and customary charge at the time of service. However, only 13.5 percent of those reductions were attributed to charity. Overall, 10.4 percent of the total billed amount was left unresolved. When payment source was considered, it was found that self-pay patients accounted for 30.6 percent of the cases but accounted for 52.0 percent of the unresolved amounts. Further analysis indicated that the self-pay patients were 35.5 times more likely to leave an outstanding balance than individuals with some type of insurance coverage. Odds of unresolved balances were also calculated as a function of income, specialty type, practice size, and type of visit.     

Losing ground: physician income, 1995-2003

Between 1995 and 2003, average physician net income from the practice of medicine declined about 7 percent after adjusting for inflation, according to a national study from the Center for Studying Health System Change (HSC). The decline in physicians' real income stands in sharp contrast to the wage trends for other professionals who saw about a 7 percent increase after adjusting for inflation during the same period. Among different types of physicians, primary care physicians fared the worst with a 10.2 percent decline in real income between 1995 and 2003, while surgeons' real income declined by 8.2 percent. But medical specialists' real income essentially remained unchanged. Physicians reported working slightly fewer hours overall but spent more time on direct patient care. Flat or declining fees from both public and private payers appear to be a major factor underlying declining real incomes for physicians. The downward trend in real incomes since the mid-1990s likely is an important reason for growing physician unwillingness to undertake pro bono work, including charity care and volunteering to serve on hospital committees.     

Factors affecting charity care and bad debt charges in Washington hospitals

Uncompensated care has become a major issue in hospital finance as the number of uninsured persons has increased and hospital revenues have declined. Uncompensated care charges have two components--charity care and bad debt--that are distinct conceptually but often are commingled in hospital accounting practice. Data on charges assigned to charity care and bad debt in 1987 for 82 short-stay hospitals in Washington were merged with data from the 1987 Medicare Cost Report and AHA Annual Survey. The regression analyses performed indicate that the determinants of the percent of charges for charity care, bad debt, and total uncompensated care differ and suggest that bad debt should be isolated from charity care when estimating a hospital's level of effort in providing care to indigent patients.     

The contribution of insurance coverage and community resources to reducing racial/ethnic disparities in access to care

OBJECTIVE: To examine the extent to which health insurance coverage and available safety net resources reduced racial and ethnic disparities in access to care. DATA SOURCES: Nationally representative sample of 11,692 African American, 10,325 Hispanic, and 74,397 white persons. Nonelderly persons with public or private health insurance and those who were uninsured. STUDY DESIGN: Two cross-sectional surveys of households conducted during 1996-1997 and 1998-1999. DATA COLLECTION: Commonly used measures of access to and utilization of medical care were constructed for individuals. These measures include the following. (1) percent reporting unmet medical needs, (2) percent without a regular health care provider, and (3) no visit with a physician in the past year. FINDINGS: More than 6.5 percent of Hispanic and African Americans reported having unmet medical needs compared to less than 5.6 percent of white Americans. Hispanics were least likely to see the same doctor at their usual source of care (59 percent), compared to African Americans (66 percent) and whites (75 percent). Similarly, Hispanics were less likely than either African Americans or whites to have seen a doctor in the last year (65 percent compared to 76 percent or 79 percent). For Hispanics, more than 80 percent of the difference from whites was due to differences in measured characteristics (e.g., insurance coverage, income, and available safety net services). Differences in measured characteristics between African Americans and whites explained less than 80 percent of the access disparities. CONCLUSION: Lack of health insurance was the single most important factor in white-Hispanic differences for all three measures and for two of the white-African American differences. Income differences were the second most important factor, with one exception. Community characteristics generally were much less important, with one exception. The positive effects of insurance coverage in reducing disparities outweigh benefits of increasing physician charity care or access to emergency rooms.     

Who serves the underserved? Predictors of physician care to medically indigent patients

Using a national sample of 466 doctors, this work is the first to determine how sociodemographic characteristics, family lives, educational experiences and work environments combine over the life course to shape physician attitudes and behaviors toward serving the medically indigent. Survey data reveal that most physicians have positive experiences with indigent patients, and feel responsible for providing care for the needy. On average, one-quarter of doctors' patients are medically indigent, and physicians provide six hours of charity care per week. Multivariate regression and path analyses indicate that disparate social forces predict humanitarian attitudes and behaviors of physicians. Physician attitudes toward the indigent are shaped largely by socializing forces, including medical education and relationships with mentors. In contrast, care of indigent patients is driven by physician attitudes and by characteristics of medical practice such as specialty and practice setting. Implications for scholarship and for medical education, practice and health policy are discussed.     

Exodus of male physicians from primary care drives shift to specialty practice

An exodus of male physicians from primary care is driving a marked shift in the U.S. physician workforce toward medical-specialty practice, according to a national study by the Center for Studying Health System Change (HSC). Two factors have helped mask the severity of the shift--a growing proportion of female physicians, who disproportionately choose primary care, and continued reliance on international medical graduates (IMGs), who now account for nearly a quarter of all U.S. primary care physicians. Since 1996-97, a 40 percent increase in the female primary care physician supply has helped to offset a 16 percent decline in the male primary care physician supply relative to the U.S. population. At the same time, primary care physicians' incomes have lost ground to both inflation and medical and surgical specialists' incomes. And women in primary care face a 22 percent income gap relative to men, even after accounting for differing characteristics. If real incomes for primary care physicians continue to decline, there is a risk that the migration of male physicians will intensify and that female physicians may begin avoiding primary care--trends that could aggravate a predicted shortage of primary care physicians.     

The cost of health insurance administration in California: estimates for insurers, physicians, and hospitals

Administrative costs account for 25 percent of health care spending, but little is known about the portion attributable to billing and insurance-related (BIR) functions. We estimated BIR for hospital and physician care in California. Data for physician practices came from a mail survey and interviews; for hospitals, from regulatory reporting; and for private insurers, from a consulting company. Private insurers spend 9.9 percent of revenue on administration and 8 percent on BIR. Physician offices spend 27 percent and 14 percent, and hospitals, 21 percent and 7-11 percent, respectively. Overall, BIR represents 20-22 percent of privately insured spending in California acute care settings.     

No exodus: physicians and managed care networks

After remaining stable since 1996-97, the percentage of U.S. physicians who do not contract with managed care plans rose from 9.2 percent in 2000-01 to 11.5 percent in 2004-05, according to a national study from the Center for Studying Health System Change (HSC). While physicians have not left managed care networks in large numbers, this small but statistically significant increase could signal a trend toward greater out-of-pocket costs for patients and a decline in patient access to physicians. The increase in physicians without managed care contracts was broad-based across specialties and other physician and practice characteristics. Compared with physicians who have one or more managed care contracts, physicians without managed care contracts are more likely to have practiced for more than 20 years, work part time, lack board certification, practice solo or in two-physician groups, and live in the western United States. The study also found substantial variation in the proportion of physicians without managed care contracts across communities, suggesting that local market conditions influence decisions to contract with managed care plans.     

The contribution of nurse practitioners and physician assistants to generalist care in Washington State

OBJECTIVE: To quantify the total contribution to generalist care made by nurse practitioners (NPs) and physician assistants (PAs) in Washington State. DATA SOURCES: State professional licensure renewal survey data from 1998-1999. STUDY DESIGN: Cross-sectional. Data on medical specialty, place of practice, and outpatient visits performed were used to estimate productivity of generalist physicians, NPs, and PAs. Provider head counts were adjusted for missing specialty and productivity data and converted into family physician full-time equivalents (FTEs) to facilitate estimation of total contribution to generalist care made by each provider type. PRINCIPAL FINDINGS: Nurse practitioners and physician assistants make up 23.4 percent of the generalist provider population and provide 21.0 percent of the generalist outpatient visits in Washington State. The NP/PA contribution to generalist care is higher in rural areas (24.7 percent of total visits compared to 20.1 percent in urban areas). The PAs and NPs provide 50.3 percent of generalist visits provided by women in rural areas, 36.5 percent in urban areas. When productivity data were converted into family physician FTEs, the productivity adjustments were large. A total of 4,189 generalist physicians produced only 2,760 family physician FTEs (1 FTE = 105 outpatient visits per week). The NP and PA productivity adjustments were also quite large. CONCLUSIONS: Accurate estimates of available generalist care must take into account the contributions of NPs and PAs. Additionally, simple head counts of licensed providers are likely to result in substantial overestimates of available care. Actual productivity data or empirically derived adjustment factors must be used for accurate estimation of provider shortages.     

Is Managed Care Leading to Consolidation in Health‐care Markets?

OBJECTIVE: To determine the extent to which managed care has led to consolidation among hospitals and physicians. DATA SOURCES: We use data from the American Hospital Association, American Medical Association, and government censuses. STUDY DESIGN: Two stage least squares regression analysis examines how cross-section variation in managed care penetration affects provider consolidation, while controlling for the endogeneity of managed-care penetration. Specifically, we examine inpatient hospital markets and physician practice size in large metropolitan areas. DATA COLLECTION METHODS: All data are from secondary sources, merged at the level of the Primary Metropolitan Statistical Area. PRINCIPAL FINDINGS: We find that higher levels of local managed-care penetration are associated with substantial increases in consolidation in hospital and physician markets. In the average market (managed-care penetration equaled 34 percent in 1994), managed care was associated with an increase in the Herfindahl of .054 between 1981 and 1994, moving from .096 in 1981 to .154. This is equivalent to moving from 10.4 equal-size hospitals to 6.5 equal-sized hospitals. In the physician market place, we estimate that at the mean, managed care resulted in a 14 percentage point decrease of physicians in solo practice between 1986 and 1995. This implies a decrease in the percentage of doctors in solo practice from 38 percent in 1986 to 24 percent by 1995.     

The demography, career pattern, and motivation of locum tenens physicians in the United States

The objective of this study was to provide a profile of locum tenens providers and their motivation for choosing this practice pattern. The research design used was a cross-sectional mailed survey questionnaire. Participants included the 1662 physicians who accepted at least one locum tenens assignment in 2001 from one physician staffing service. They were asked to complete a 50-element questionnaire; 776 (47 percent) responded. The average age of respondents was 53.0 years. Men represented 70.3 percent of the sample and were significantly older (56.3 years) than women providers who responded (45.3 years). One-third considered a locum tenens practice pattern permanent. Primary care locums were younger than specialists and subspecialists. Female providers were disproportionately practicing in primary care specialties (43.9 percent); 64 percent used locum income as their sole source of support and were frequently (31 percent) motivated by a need for a flexible work schedule. Male locum physicians were weighted toward the subspecialties and were motivated mostly (62 percent) by a desire to continue to practice part time. They used locum income as a secondary means of support (33 percent) or to augment pension and retirement resources (38 percent). A physician workforce from most major specialties and subspecialties and all age groups and career stages fulfills career and economic goals by working in a short-term, temporary employment pattern. Locum tenens appeals to physician providers who desire a healthier, more controllable lifestyle.     

Rural physician assistants: a survey of graduates of MEDEX Northwest.

Graduates of MEDEX Northwest, the physician assistant training program at the University of Washington, were surveyed to describe differences between physician assistants practicing in rural settings and those practicing in urban settings. Differences in demography, satisfaction with practice and community, practice history, and practice content were explored. Of the 341 traceable graduates, 295 (86.5 percent) responded to the mail survey. Although rural- and urban-practicing physician assistants are remarkably similar in most respects--income, hours worked, levels of practice satisfaction, for example--those in rural primary care reported performing a much wider range of medical and administrative tasks than those in urban practice. Half of the physician assistants who grew up in small towns were practicing in rural places compared with 18 percent of those from large towns. The broader scope of practice available to primary care physician assistants in rural areas may be of particular interest to those considering rural careers, to people who train physician assistants, and to rural communities trying to recruit and retain physician assistants. Results also suggest that recruitment of students for rural practice should focus on rural residents. Some problems that rural practitioners are more likely to face than urban ones, such as unreasonable night call schedules and lack of acknowledgement and respect for them as professionals, need to be addressed if rural communities are to be able to attract and retain physician assistants.     

Mounting pressures: physicians serving Medicaid patients and the uninsured, 1997-2001

The proportion of doctors providing any charity care decreased from 76.3 percent in 1997 to 71.5 percent in 2001, according to a new study by the Center for Studying Health System Change (HSC). The proportion of physicians serving Medicaid patients also decreased from 87.1 percent in 1997 to 85.4 percent in 2001. The small decrease in physicians serving Medicaid patients does not appear to have had any negative effects on access to physicians among Medicaid beneficiaries. On the other hand, the more sizable decrease in physicians providing charity care is consistent with other evidence showing decreased access to physicians by uninsured persons. New budget pressures could lead states to freeze or cut Medicaid provider payment rates, which could then trigger access problems.     

Contribution of a nurse clinician to office practice productivity: comparison of two solo primary care practices.

A comparison of two solo primary care practices with similar patient populations reveals a significant difference in productivity. A nurse clinician was employed in the more productive practice. She independently managed 1,848 patient visits a year that would otherwise have required the time and attention of a physician. She contributed to the productivity of the physician by performing some tasks he would normally have performed during visits they managed jointly. It was primarily because of the assistance he received from the nurse clinician that the physician in practice II was 12 percent more productive than the physician in practice I. The nurse clinician and physician managed 31 percent more patient visits during a standard day than the physician in practice I, or a difference of 2,856 patient visits a year. This annual difference is based on a work schedule that could be matched in other practices: an eight-hour day and a 240-day work year.     

Low back pain in the primary care setting.

A study of the natural presentation, course, and treatment of low back pain in the primary care setting was undertaken. One hundred and forty-four charts listing low back pain as a problem were reviewed at a family practice center for a period of one year. A profile of the patient evaluated by the primary care physician emerged, revealing a high incidence of associated weight problems (70 percent), psychologic problems (33 percent), and hypertension (19 percent). The rate of actual or suspected disc disease (1.4 percent) was much lower than that reported in series from referral centers. This study of low back pain in the primary care setting illustrates the usefulness of outpatient study in defining a problem category, recognizing disease as a symptom complex, suggesting modalities of treatment, and designing a curriculum for the primary care physician.