Summary
- A new study from Center for Studying Health System Change suggests that new Medicaid eligibles under reform will have trouble getting access because most primary care are not accepting new Medicaid patients.
- Our view: The study does not take into account the role of focus in Medicaid which makes a big difference: Providers earning more than 25% of revenues from Medicaid are much more willing to take on all or most new patients. In fact, among the providers most likely to care for Medicaid eligibles, the willingness to accept all new patients is not that different than for private insurance.
- Therefore: A critical capability for Medicaid managed care will be helping the newly eligible navigate to these providers quickly to minimize “falling through the cracks”, getting discouraged with the system and resorting to the ER for primary care.
- The surge in demand may still overwhelm available capacity: however, rather than trying to expand uptake of Medicaid among broad segments of PCPs, policy and Medicaid managed care may do better to increase the pool of providers focused in Medicaid through new reimbursement mechanisms and promotion of shared support networks providing technology and staffing (e.g. nurse care managers).
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A new study by Peter Cunningham at the CSHSC made news last week by comparing the availability of primary care physicians (PCPs) to the growth of newly Medicaid eligible. As with most studies about primary care capacity, the news was not good:
- Only 42% of PCPs were accepting all or most new Medicaid patients nationally
- Many of the states which will see the largest growth in Medicaid eligibles under healthcare reform also have the fewest PCPs per capita
- States with lower PCP capacity also tend to have higher Medicaid reimbursement rates vs. Medicare – so reform’s temporary increase of Medicaid rates to match Medicare will not have a big effect. Statistical analysis suggests that a 10% increase in the Medicaid/Medicare fee for service ratio will increase patient acceptance by 2%.
In our view, disaggregating the problem is critical: While Medicaid rates do not seem to affect PCPs’ accepting new patients, physicians already treating Medicaid eligibles are very willing to take on more patients. Going back to the original 2008 Physician Tracking Study that informs Cunningham’s work, there is this data which I pulled into a more visual chart (note: PCP specific data not available for this cut; all provider data used as a proxy): 
The trend towards Medicaid-focused providers has been noted already (e.g. by the CSHSC). There are many drivers including low reimbursement rates and slow payment, complex paperwork and complex patients. Geographic concentration is certainly part of the story as well. All health care is local but Medicaid health care is more so because economically vulnerable populations often lack consistent access to transportation. As a result: about 55% of Medicaid physician spending is concentrated in the 21% of providers earning more than 25% revenues from Medicaid.
These Medicaid-focused providers must be taken into account: it is not really material if providers in high income zip codes are taking new Medicaid patients; what matters is whether the providers accessible to Medicaid eligibles are taking new patients. Assuming the share of Medicaid revenues today is a good proxy for a provider’s Medicaid accessibility (I call them “likely providers”) and assuming the newly eligibles under Reform are largely in similar geographies as those currently eligible, the picture looks different:
- 56% of likely providers are taking all new Medicaid patients (comparable to 57% of all physicians taking all new privately insured patients and 58% accepting all new Medicare patients).
- 70% of likely providers are taking all or most new Medicaid patients (vs. 87% for all physicians and private insurance and 74% for all physicians and Medicare).
See Exhibit below for the math. Note: I could not find the data for primary care specifically for this analysis so I compare all physicians vs. all physicians so close to apples-to-apples.
This is not to minimize the challenge: the growth of Medicaid covered lives from 40M to 55M (per CBO) can still overwhelm the system. The Cunningham analysis is persuasive that the increase in Medicaid rates to match Medicare will have limited impact on growing capacity.
An effective solution needs to understand how some significant subsets of providers are able to work with Medicaid and to create more of them. Some potential avenues:
- New reimbursement approaches (e.g. ACOs) to encourage larger organizations of providers committed to mutually supportive care. Generally larger and institutional practices (e.g. based in a health center or hospital) are more accepting of Medicaid). Part of the frustration small practices have with Medicaid is getting specialist referrals. Reimbursement structured around coordinated care can promote the creation of larger groups able to (1) supplementally reward the PCP and garner their interest in serving Medicaid) (2) provide the scale to navigate the peculiarities of Medicaid reimbursement and (3) ensure the care needed outside the PCP office.
- Creating networks of shared support (such as recommended by a new study by Highsmith and Berenson from the Commonwealth Fund) including technology and support staff such as nurse care mangers, pharmacists, behavioral specialists to ease some of the burdens of working with Medicaid while also improve quality of care. The Commonwealth study as a long and interesting list of ideas for how Medicaid agencies can promote and fund these shared networks.