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Review of Economics of the Household

, Volume 5, Issue 1, pp 95–112 | Cite as

Medicaid physician fees and the quality of medical care of Medicaid patients in the USA

  • Sandra L. DeckerEmail author
Household health

Abstract

When enacted in 1965, the original Medicaid legislation sought to finance access to mainstream medical care for the poor. I use data on visits to office-based physicians from the National Ambulatory Medical Care Survey in four years—1989, 1993, 1998 and 2003—to test the extent to which this goal has been achieved. Specifically, I test whether this goal has been achieved more in states that pay higher fees to physicians who treat Medicaid patients compared to states that pay lower fees. By comparing the treatment of Medicaid patients to that of privately-insured patients and by using state fixed effects, I am able to estimate the effects of changes in the generosity of Medicaid physician payment within a state on changes in access to care for Medicaid patients, therefore separating Medicaid’s effect on access to health care from any correlation between the Medicaid fee and other attributes of the state in which a patient lives. Using this method, I examine the effect of Medicaid fees on whether or not an office-based physician accepts Medicaid patients, on the fraction of a physician’s practice that is accounted for by Medicaid, and on the length of visit times with physicians. Results imply that higher Medicaid fees increase the number of private physicians, especially in medical and surgical specialties, who see Medicaid patients. Higher fees also lead to visit times with physicians that are more comparable to visit times with private pay patients.

Keywords

Medicaid Physician care Duration of visit 

JEL Classifications

I18 

Notes

Acknowledgement

I am grateful for helpful suggestions from Catharine Burt, David Cutler, Douglas Elmendorf, Martin Feldstein, Richard Kronick, Joseph Newhouse, and two anonymous referees. The findings and conclusions in this paper are those of the author and do not necessarily represent the views of the Centers for Disease Control and Prevention.

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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  1. 1.National Center for Health StatisticsHyattsvilleUSA
  2. 2.National Bureau of Economic ResearchNew YorkUSA

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