Medicaid Enrollment to Outpace Primary Care Providers

The growth in Medicaid enrollment under healthcare reform will greatly outpace growth in the number of primary care physicians willing to treat new Medicaid patients in much of the country – particularly the South and Mountain West, a national study shows.

The study, released this week by the nonpartisan Center for Studying Health System Change, also found that temporary increases in Medicaid reimbursement to entice primary care physicians to accept Medicaid patients are unlikely to make a difference in the states with the biggest enrollment jumps.

"The study's bottom line is that growth in Medicaid enrollment in much of the country will greatly outpace growth in the number of primary care physicians willing to treat new Medicaid patients resulting from increased reimbursement," said HSC Senior Fellow Peter J. Cunningham, the study's author.

Under federal health reform, Medicaid eligibility will expand to cover as many as 16 million more poor and low-income adults by 2019. Nationally, 42% of primary care physicians in 2008 were accepting all or most new Medicaid patients, compared with 61% of primary care physicians accepting all or most new Medicare patients, and 84% accepting all or most privately insured patients.

The study found that states with the smallest number of primary care physicians per capita overall—generally in the South and Mountain West—potentially will see the largest percentage increases in Medicaid enrollment. In contrast, states with the largest number of primary care physicians per capita—primarily in the Northeast—will see more modest increases in Medicaid enrollment.

The reform law also increases Medicaid reimbursements for some services provided by primary care physicians to 100% of Medicare rates in 2013 and 2014. The increases will have less impact in states with a smaller number of primary care physicians accepting Medicaid patients now because many of these states already reimburse primary care at rates close to or exceeding 100% of Medicare, the study found.

The study also determined that geographic differences in primary care physician acceptance of new Medicaid patients reflect differences in physician supply, not geographic differences in the primary care physicians' willingness to treat Medicaid patients.

Funded by Robert Wood Johnson Foundation, the survey includes responses from more than 4,700 physicians. Physicians who identified their primary specialty as general internal medicine, family practice, or general pediatrics numbered 1,748.

The study classified states into three groups—low-, medium-, and high-primary care physician states—based on the ratio of physicians to the nonelderly U.S. population in 2008, using the Health Resources and Services Administration Area Resource File. Low-, medium-, and high-primary care physician states were determined based on the distribution of the U.S. population into these groups—25% of the U.S. population is in low-primary care physician states, 50% in medium-primary care physician states and 25% in high-primary care physician states.

Primary care physician supply varies considerably by region of the country. States with the highest numbers of primary care physicians—relative to the population—are concentrated almost entirely in the Mid-Atlantic and Northeast, while states with the lowest supply are concentrated largely in the South and Mountain West.

Low- and high-primary care physician states also vary by state Medicaid program characteristics. Medicaid reimbursement rates for primary care—as a percentage of Medicare rates—are much higher on average in low-primary care physician states (81.6%) compared to high-primary care physician states (54.8%) Low-primary care physician states also tend to have more restrictive Medicaid eligibility, as exemplified by the fact that only one—Arizona—currently allows Medicaid eligibility for at least some parents or childless adults with incomes above 100% of poverty, the study noted.

Accounting for differences in physician practice, patient and healthcare market characteristics, the study found that higher Medicaid reimbursement rates are associated with a greater probability of primary care physicians accepting all or most new Medicaid patients, although the effects are relatively modest. For primary care physicians, a 10% increase in the Medicaid/Medicare fee ratio for primary care was associated with only a 2.1% increase in primary care physicians Medicaid patient acceptance. Excluding pediatricians, the effects of reimbursement on Medicaid acceptance is slightly higher.

In other words, if primary care physicians in low-supply states were similar to primary care physicians in high-supply states on all measured factors other than level of reimbursement, Medicaid acceptance would be 5.7% higher in low-primary care physician states compared to high-primary care physician states, the study said.

One limitation of the study is that it treats the temporary Medicaid reimbursement increase as permanent, so estimates of the impact of the increases on primary care physicians' willingness to accept new Medicaid patients are likely overstated.

Based on information from HSC's nationally representative 2008 Health Tracking Physician Survey, the study's findings are detailed in a new HSC Research Brief—State Variation in Primary Care Physician Supply: Implications for Health Reform Medicaid Expansions—available online at www.hschange.org.