Most Illinois Specialists Won't Take Medicaid Patients

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Proponents of health care reform are gnashing their teeth, while opponents grimly say "I told you so", at the news of a study from Illinois showing that children in Medicaid/SCHIP have difficulty getting specialists to treat them:


The study used a "secret shopper" technique in which researchers posed as the parent of a sick or injured child and called 273 specialty practices in Cook County, Ill., to schedule appointments. The callers, working from January to May 2010, described problems that were urgent but not emergencies, like diabetes, seizures, uncontrolled asthma, a broken bone or severe depression. If they were asked, they said that primary care doctors or emergency departments had referred them.

Sixty-six percent of those who mentioned Medicaid-CHIP (Children's Health Insurance Program) were denied appointments, compared with 11 percent who said they had private insurance, according to an article being published Thursday in The New England Journal of Medicine.

In 89 clinics that accepted both kinds of patients, the waiting time for callers who said they had Medicaid was an average of 22 days longer.
Obviously, this has implications for the plans to cut Medicare reimbursements.  And for the success of ObamaCare, since most of the coverage expansion will come, not from the exchanges, but from extending Medicaid. Harold Pollack writes:

Illinois' Medicaid reimbursement rates are below market rates-a problem compounded by the state's reputation for delayed payment and administrative hassles. . . . Governors across the country now complain about the fiscal burden Medicaid imposes. Many in official Washington speak of the "entitlement crisis" as if Medicaid and Medicare raise similar dilemmas. This is misguided. Medical specialists argue and cajole policymakers in search of higher Medicare reimbursement rates. Sometimes these higher rates are justified. Many specialists don't even bother to argue about Medicaid. They just don't treat patients. The same is true of many hospitals.
It remains an open question whether doctors and hospitals will start treating Medicare patients more like Medicaid patients if we do succeed in controlling their reimbursements.  One should take these things with a grain of salt, but in some places doctors and hospitals are complaining that the reimbursement for treating Medicaid patients is below their marginal cost--they'd be better off leaving the room empty.  Obviously, moving Medicare in this direction is going to make it more difficult for those patients to get care, even if we don't push reimbursements quite that low--you can afford to take some of your patients at less than your average cost, but definitionally, not everyone can pay less than average cost.

That said, I'm not sure how much these results actually tell us.  Here's the description:

Between January and May 2010, research assistants called a stratified, random sample of clinics representing eight specialties in Cook County, Illinois, which has a high proportion of specialists. Callers posed as mothers of pediatric patients with common health conditions requiring outpatient specialty care. Two calls, separated by 1 month, were placed to each clinic by the same person with the use of a standardized clinical script that differed by insurance status.
At the time, as you may recall, Illinois was in the middle of an ugly budget crisis.  As described to me, one of the ways they liked to deal with that crisis was to simply not reimburse people like Medicaid providers.  This would go on for months and months, and then when everyone was just about ready to quit the program entirely, they'd issue some bonds and pay off the accumulated debts.

Under these circumstances, I think that even my most liberal readers would think twice about booking Medicaid patients; offices have overhead that has to be covered by cash flow, and no one wants to spend the best part of a year hassling with the state to get paid for an ear exam.  Doctors tell me that the advantage of Medicare and Medicaid, despite the lower reimbursements, is that it's generally less annoying getting paid (the flip side of the low administrative costs in these programs is that there's no check for fraud, or demand that physicians justify expensive tests and treatments.) If you remove that incentive, there's no reason at all to take Medicaid patients.

So Illinois definitely has a problem.  But it's not clear how relevant this is to the rest of us.
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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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