Int J Health Care Finance Econ DOI 10.1007/s10754-014-9146-9

Do the Medicaid and Medicare programs compete for access to health care services? A longitudinal analysis of physician fees, 1998–2004 Larry L. Howard

Received: 17 June 2013 / Accepted: 11 March 2014 © Springer Science+Business Media New York 2014

Abstract As the demand for publicly funded health care continues to rise in the U.S., there is increasing pressure on state governments to ensure patient access through adjustments in provider compensation policies. This paper longitudinally examines the fees that states paid physicians for services covered by the Medicaid program over the period 1998–2004. Controlling for an extensive set of economic and health care industry characteristics, the elasticity of states’ Medicaid fees, with respect to Medicare fees, is estimated to be in the range of 0.2–0.7 depending on the type of physician service examined. The findings indicate a significant degree of price competition between the Medicaid and Medicare programs for physician services that is more pronounced for cardiology and critical care, but not hospital care. The results also suggest several policy levers that work to either increase patient access or reduce total program costs through changes in fees. Keywords

Physician fees · Health care · Medicaid · Medicare · Federal state

JEL Classification

H51 · H77 · I18 · I38

1 Introduction The Medicaid and Medicare programs are the largest publicly funded health care programs in the U.S. Although each serves a distinctly different demographic population, they both utilize the same health care providers for many services provided to eligible individuals. A central question we ask in this paper is whether Medicaid competes with Medicare for access to health care services by adjusting fee levels in markets for physician services. While alternative outcomes in other markets are also of interest, a better understanding of the determinants of physician fees is important because they underlie the total cost of the programs to taxpayers,

L. L. Howard (B) Department of Economics, California State University, Fullerton, 800 N. State College Blvd., Fullerton, CA 92834-6848, USA e-mail: [email protected]

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as well as the effectiveness of the public spending on patient outcomes. In fact, the prevailing positive relationships between physician service compensation and patient access (Staiger et al. 2010; Decker 2009; Turcotte et al. 2005; Zuckerman et al. 2004; Baker and Royalty 2000; Cohen and Cunningham 1995) and between physician service compensation and service quality (Garthwaite 2011; Decker 2007; Gruber et al. 1999; McGuire and Pauly 1991) suggest payment levels have important consequences for the health outcomes of low-income families. For instance, higher Medicaid physician fees are associated with a lower prevalence of infant mortality (Currie et al. 1995) and low birth weight (Gray 2001). In this research we help shed light on the extent to which Medicare physician fees determine Medicaid physician fees. Since the 1980s, Medicare has generally been paying health care providers lower prices than those offered by private insurers, particularly for physician services (Hadley and Reschovsky 2006), and Medicaid typically pays even lower prices.1 For example, Zuckerman et al. (2009) show that, in 2008, average state Medicaid physician fees were 72 % of Medicare fees. Even though both programs can attempt to minimize provider payments, they must also adjust prices to ensure that patients have access to care. Economic theory suggests the possibility of price competition between inframarginal and marginal buyers, and the extent to which they compete with one another would depend on the capacity of physicians to provide a sufficient quantity of services to all Medicare and Medicaid patients at relatively lower market prices (Sloan et al. 1978a,b). The focus of this paper is on markets for physician services because many of the services covered by Medicaid are also covered by Medicare.2 In markets where both programs demand significant quantities, increases in Medicare physician fees may force states to increase Medicaid physician fees for the same services. Relatively high utilization rates for cardiology, emergency care, evaluation and management, and hospital care services suggest that any price competition for physician services would be more pronounced in these markets (U.S. Government Accountability Office 2009; Zuckerman et al. 2009). An impediment to investigating price competition in any market is the potential for endogeneity bias arising from simultaneous decision-making. In the present context, we are able to overcome this limitation by taking advantage of the federalist structure of public entitlement and welfare programs in the U.S. The federal government’s decisions regarding Medicare physician fee levels are fundamentally independent of those made by individual state governments in regard to Medicaid.3 Thus, while states are likely to respond to the incentives created by Medicare policies, it is unlikely for the particular policy we examine here to be endogenously determined with states’ decisions. This well-established governmental decision-making structure provides a basis for the identification strategy we employ to estimate the effect of an exogenous change in a Medicare physician fee on the fees that states set for the identical service covered by Medicaid.

1 Fee-for-service compensation policies are a common approach for paying health care providers within

Medicaid. Even among states that have adopted managed care methods, physician service fees continue to play an influential role in determining capitation rates and reimbursements through primary care case management programs (Zuckerman et al. 2009; Schneider et al. 2002; Norton and Zuckerman 2000). 2 Outpatient physician services are covered under Medicare Part B, and inpatient physician services are covered under Medicare Part A. Additional plan options were created with the Balanced Budget Act of 1997, and Private Fee-for-Service plans can now have higher fees than the traditional program; see Blum et al (2007) for details. 3 Medicaid is a means-tested welfare program that is jointly administered by both federal and state governments, while Medicare is an entitlement program that is administered by the federal government.

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The paper proceeds as follows. The Second section provides an overview of Medicaid and Medicare physician fees. The Third section provides a theoretical framework to motivate the empirical analysis. The Fourth section describes the estimation strategy and data sources. The Fifth section presents the results. The Sixth section concludes. 2 Overview For nearly a half-century, the Medicaid program has been a central source of funding for health care among low-income US residents. Over the past decade alone, total federal and state spending on the program has increased by 100 % to more than $400 billion in 2010; and spending on office-based and independently-billing hospital-based physician services has continued to account for approximately 5 % of total Medicaid expenditures.4 From 2000 to 2009 the number of recipients receiving physician services increased by approximately 20 %, while average real payments for physician services increased by approximately 11 %.5 Many physician services are also provided to Medicaid patients by inpatient and outpatient hospital departments. Although federal law requires all state programs to provide physicians’ services, it allows every state to determine compensation levels for each service covered by Medicaid. Only one federal statutory standard applies to this component of the program, and it requires compensation to be “sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.”6 However, in practice, average physician compensation levels have fluctuated over time and between services. It is difficult to ascertain the extent to which states are adjusting the compensation provided for physician services using aggregate Medicaid spending figures. In this study, fees for fifty physician services provided to both Medicaid and Medicare patients are examined longitudinally to better understand the factors determining Medicaid physician fees. In contrast to Medicaid, Medicare has been a central source of funding for health care among elderly US residents, and it has implemented a resource-based relative value scale (RBRVS) system for determining physician fees.7 Under this payment system, each physician service is assigned a flat fee according to the relative value units (RVUs) of the services rendered (Zelman et al. 2009; Grimaldi 2002). The formula is as follows: Medicar e f ee = Physician W or k RVU + Practice E x pense RVU + Malpractice E x pense RVU

(1)

where a conversion factor (CF) is utilized to convert the RVUs into a dollar amount. Physician Work reflects the time and intensity required in providing the service, Practice Expense reflects the cost of maintaining a medical practice, and Malpractice Expense reflects malpractice insurance premiums.8 States typically pay less for physician services provided through 4 See Tables 3 and 9 at http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf 5 Expenditures were adjusted by the author using the CPI in 2011 dollars. For original figures see Table 8.E1

at http://www.ssa.gov/policy/docs/statcomps/supplement/2011/8e.html 6 See section 1902(a)(30)(A) of the Social Security Act, 42 U.S.C. 1396a(a)(30)(A). The geographic area guideline was introduced with the enactment of the Omnibus Budget Reconciliation Act of 1989 (Flint 2006). 7 Outpatient physician services are covered under Medicare Part B, and inpatient physician services are covered under Medicare Part A. 8 A further distinction in Practice Expense RVUs is also made for whether the service was provided in a facility or non-facility setting. A non-facility setting is typically a physician’s office, while a facility setting is typically an inpatient or outpatient hospital where practice expenses are lower. In this study, we focus on the role of non-facility Medicare physician fees where applicable.

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the Medicaid program than the federal government pays for the same services provided through the Medicare program (Zuckerman et al. 2009, 2004).9 Table 1 presents the average Medicaid-to-Medicare fee ratios for a longitudinal sample of physician service fees and a pattern of relatively lower state Medicaid fees is evident. Only one state, Hawaii (1.09) in 1998, had an average fee ratio above one. However, we see considerable within state variation in fee ratios, with 32 out of 44 states experiencing both increases and decreases in fee ratios over this period. More importantly, the within state changes reflect compositional changes in fee ratios according to the type of physician service. Table 2 presents the average Medicaid-to-Medicare fee ratios for the seven types of services in the sample. The same pattern of relatively lower state Medicaid physician fees remains evident; and we see considerable changes within each type of service during this period. For instance, fee ratios for emergency care services decreased by about 18 % from 1998 to 2001, and then increased by about 17 % over the next three years. A central question motivating a richer empirical analysis of this phenomenon is how much of the variation in state Medicaid physician fees is driven by changes in Medicare physician fees.

3 Theoretical framework A model of physicians as profit-maximizing firms providing services to multiple markets characterized by different fee structures helps to clarify the role that changes in fees can have on the market equilibrium in states (Sloan et al. 1978a,b). For simplicity, assume a physician provides one service to three distinct markets. In the first market, the physician faces a downward-sloping demand curve and sets the price for the service, while in the second and third markets the physician has the option to provide the service for a fixed fee that is exogenously determined by the Medicare and Medicaid programs, respectively. Horizontally summing across the marginal revenue curves in each market yields a piecewise marginal revenue curve with four kinks. The first kink in the combined marginal revenue curve occurs at the point where the physician has the option to provide the service in exchange for the fee determined by Medicare, and the second kink occurs at the particular quantity where Medicare patients’ demand for the service is exhausted. Similarly, the third kink in the combined marginal revenue curve occurs at the point where the physician has the option to provide the service in exchange for the fee determined by Medicaid, and the fourth kink occurs at the particular quantity where Medicaid patients’ demand for the service is exhausted. In the usual case where the Medicare fee is higher than the Medicaid fee, Medicare is the largest inframarginal buyer of the physician’s service and Medicaid is the largest marginal buyer that must compete with the inframarginal buyer for access by adjusting fees. Holding demand constant, the decision to provide the service to all Medicare and Medicaid patients depends on where a physician’s marginal cost curve is located.10 For example, if the marginal cost curve intersects the combined marginal revenue curve at a quantity that lies to the right of the fourth kink then all Medicare and Medicaid patients would be served, and we would not expect price competition. A marginal cost curve in this position would also suggest that Medicare and/or Medicaid could lower their fee and continue to 9 In certain instances, Medicare has set a fee for a physician service that it does not actually provide to recipients. 10 Physician costs associated with providing services to the three markets are assumed to be equal. In practice, it is possible that collection costs may vary according to the buyer (Sloan et al. 1978a,b).

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A longitudinal analysis of physician fees, 1998–2004 Table 1 Medicaid-to-Medicare physician fee ratios by state: 1998, 2001, and 2004 State

#

1998

2001

2004

% difference 2001–1998

% difference 2004–2001

AL

50

0.69

0.67

0.69

−2.8

3.2

AR

40

0.90

0.79

0.99

−12.2

25.9

CA

47

0.53

0.57

0.56

8.5

−2.1

CO

50

0.69

0.61

0.63

−11.8

3.9

CT

42

0.63

0.59

0.62

−7.3

5.0

FL

47

0.58

0.51

0.54

−11.6

5.5

GA

40

0.83

0.83

0.85

0.2

3.1

HI

46

1.09

0.60

0.94

−44.7

56.3

ID

50

0.80

0.74

0.92

−6.6

23.2

IL

48

0.58

0.56

0.54

−3.5

−3.2

IA

50

0.68

0.61

0.87

−9.5

42.2

KS

50

0.64

0.62

0.64

−3.6

4.1

KY

49

0.75

0.65

0.67

−13.0

2.5

LA

45

0.60

0.54

0.67

−9.2

23.4

ME

39

0.51

0.43

0.46

−15.7

7.2

MD

45

0.38

0.34

0.61

−9.6

78.9 13.9

MA

47

0.71

0.65

0.74

−8.9

MN

45

0.81

0.74

0.76

−8.9

3.1

MS

30

0.66

0.80

0.86

21.0

7.4

MO

50

0.46

0.42

0.40

−9.6

−3.8

MT

48

0.83

0.77

0.76

−7.1

−1.7

NE

50

0.73

0.58

0.77

−20.6

32.7

NV

48

0.96

0.84

0.80

−12.8

−4.1

NH

50

0.59

0.49

0.55

−15.7

12.3

NJ

47

0.37

0.32

0.43

−15.0

35.4

NY

49

0.21

0.26

0.26

22.5

2.5

NC

50

0.85

0.90

0.94

6.3

4.6

ND

50

0.87

0.78

0.83

−10.3

6.3

OH

49

0.66

0.55

0.59

−17.2

7.0

OK

49

0.57

0.62

0.74

9.0

19.4

OR

50

0.67

0.70

0.76

3.9

9.1

PA

41

0.50

0.44

0.43

−12.4

−1.8

RH

31

0.46

0.39

0.45

−16.5

15.7

SC

50

0.51

0.44

0.94

−13.4

113.9

SD

41

0.81

0.69

0.75

−15.0

8.5

TX

49

0.73

0.63

0.65

−14.6

3.7

UT

50

0.62

0.55

0.62

−11.7

12.4

VT

26

0.61

0.70

0.64

14.1

−8.0

VA

50

0.78

0.68

0.69

−11.9

1.1

WA

50

0.73

0.70

0.67

−4.6

−4.1

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L. L. Howard Table 1 continued State

#

1998

2001

2004

% difference 2001–1998

% difference 2004–2001

WV

49

0.77

0.74

0.75

−3.8

0.9

WI

48

0.67

0.58

0.68

−12.4

16.1

WY

45

0.84

0.81

0.92

−4.6

14.2

Notes Average ratios of state Medicaid physician fees to non-facility Medicare physician fees are reported by state. # indicates the number of physician services observed for each state in the sample. See Table 7 in the appendix for descriptions of the 50 physician services that are represented here and the number of states observed for each service Sources American Academy of Pediatrics Medicaid Reimbursement Survey and Centers for Medicare and Medicaid Services Physician Fee Schedule Relative Value Files Table 2 Medicaid-to-Medicare physician fee ratios by service type: 1998, 2001, and 2004 Service type

N

1998

2001

2004

% difference 2001–1998

% difference 2004–2001

Cardiology

7

0.63

0.63

0.70

−0.4

11.7

Consultations

6

0.61

0.59

0.66

−4.1

13.1

Critical care

5

0.68

0.66

0.69

−3.1

5.4

Emergency care

7

0.71

0.58

0.68

−18.1

16.7

Evaluation and management

12

0.73

0.64

0.71

−12.8

11.7

Hospital care

10

0.61

0.61

0.70

0.8

15.0

Pulmonology

3

0.79

0.66

0.67

−16.3

1.1

Notes Average ratios of state Medicaid physician fees to non-facility Medicare physician fees are reported by service type. N indicates the number of physician services observed for each service type in the sample. See Table 7 in the appendix for descriptions of the 50 physician services that are represented here and the number of states observed for each service Sources American Academy of Pediatrics Medicaid Reimbursement Survey and Centers for Medicare and Medicaid Services Physician Fee Schedule Relative Value Files

ensure that all their patients are served. In contrast, if a physician’s marginal cost curve is upward sloping and intersects the combined marginal revenue curve precisely at the quantity associated with the fourth kink then a decrease in the Medicare fee would force a state, the marginal buyer, to raise the Medicaid fee offered for the service in order to ensure that all Medicaid patients were served. Thus, in both cases, a reduction in the Medicare fee results in a physician serving more patients in the price-setting market. However, the response of a state’s Medicaid fee to a reduction in the Medicare fee would primarily depend on whether there is sufficient capacity for a physician to continue serving all Medicaid patients at the current fee. If a Medicare fee reduction reflects actual changes in the RVUs associated with the service or the value of RVUs in general, then a physician’s marginal cost curve would shift downward and states would be able to hold Medicaid fees at initial levels or, possibly, lower them. In contrast, if a Medicare fee reduction reflects cost containment efforts by the federal government then a state’s Medicaid fee would have to increase if the physician has insufficient capacity, otherwise all Medicaid patients may not have access to the physician’s services. Economic theory predicts that physicians may respond to the loss of income associated with fee reductions by engaging in behavior that increases the volume of services provided in

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markets with fixed fee structures; in particular, the largest volume increases would be expected for services that derive a large share of patients from the Medicare and Medicaid markets (McGuire and Pauly 1991). Volume adjustments by physicians could change the particular quantities associated with the second and fourth kink points of the combined marginal revenue curve described above. As a result, there may be insufficient capacity available for Medicaid patients if Medicare lowers a fee, and states would have to raise fees. Empirical evidence confirms volume adjustments by physicians in response to fee changes (Hadley et al. 2009; Hadley and Reschovsky 2006; Mitchell et al. 2002).

4 Estimation strategy and data To investigate the elasticity of Medicaid physician fees with respect to the Medicare fee for the same physician service, we first consider the following regression model for the ith physician service in state s during year t: ln(Medicaid f ee)ist = β0 + β∗1 ln(Medicar e f ee)it + αi + μs + τt + γs (μs · t) + uist (2) where ln (Medicaid fee)ist refers to the physician service, state, and year specific Medicaid fee expressed as a natural logarithm, ln (Medicare fee)it refers to the physician service and year specific Medicare fee in Eq. (1) expressed as a natural logarithm, αi refer to physician service fixed effects, μs refer to state fixed effects, and τt refer to year fixed effects. Statespecific trends are represented by μs · t where t is a linear time trend. The model is estimated by ordinary least squares (OLS) and standard errors are clustered at the state-level to allow for an arbitrary pattern of serial correlation in the residual error terms of states. Can the effect of Medicare fees in this specification be considered causal? While the endogeneity of Medicare fees is not a primary concern, it could arise if all states systematically set Medicaid physician fees at higher levels than Medicare. The general pattern across states is that Medicaid fees are set below the corresponding Medicare fee for the identical physician service. However, omitted variables bias is a concern for several reasons. First, in practice, Medicare adjusts its physician service RVUs for time-varying differences in health care production costs that are specific to the provider’s geographic location using Geographic Practice Cost Indices (GPCIs).11 By design, the adjustments attempt to offset differences across geographic markets in the equilibrium wages of health care personnel and the price levels of other inputs employed in the production of physician services. We control for time-varying state-level differences in the costs of health care production using total annual Medicare expenditures per recipient. The measure also helps control for changes in the patterns of patient utilization of services and potential market-wide effects that Medicare purchases may have on equilibrium physician service prices (Gaynor et al. 2014; Hadley et al. 2009; Buntin et al. 2004; Glied 2003; Gaynor and Haas-Wilson 1999). Second, Medicaid physician fees are likely to reflect differences over time in the average private cost of health care services. We control for average prices by including a measure of total private health care expenditures per capita. Although imperfect, this measure is the 11 Since 1997, GPCIs are currently designated for 89 unique geographic localities in the U.S., and certain states have more than one locality. In practice, states do not account for a non-uniform distribution of health care production costs across localities when setting Medicaid physician fees. For instance, New York has five localities designated by Medicare, and each locality has a different GPCI assigned for each of the three RVU measures in Eq. (1) that is applied to every covered physician service; however, only one set of Medicaid physician fees is determined by the state and it is applied equally to all five of the localities. See https://www. cms.gov/PhysicianFeeSched/15_AlternativeGPCIReview.asp#TopOfPage

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best available information on health care price levels prevailing in states. Higher overall per capita health care costs would likely increase a state’s cost of providing services to Medicaid patients; however, high costs may also indicate high demand for health care services. The larger the number of health providers located within state, the more leverage a state potentially has to negotiate lower fees if physicians have the capacity to provide services at prices below the average paid by private insurers and payers. Third, Medicaid is a joint federal-state program and each state’s Medicaid expenditures are matched by the federal government at a rate equal to the federal medical assistance percentage (FMAP).12 In related work on federal-state cash assistance, federal grants have been shown to change how states allocate expenditures between benefit levels on the one hand, and additional recipients on the other (Baicker 2005). In the context of health care provision, this tradeoff can be more complex. The FMAP may work to stimulate spending on certain types of health care, such as physician services, at the expense of others. For instance, Sloan (1984) examines Medicaid fees using data based on a nationwide survey administered by the National Opinion Research Center in 1975–1976 and found positive and significant relationships between a state’s FMAP and Medicaid physician fees.13 Fourth, as of 2008, the percentage of Medicare recipients who were also eligible for Medicaid ranged 8–31 % across states, and “dual-eligible” elderly and disabled individuals have high costs due to extensive use of medical services (Cubanski et al. 2010). While information on the number of dual-eligible patients is available, econometric concerns of potential endogeneity bias prevent us from directly including it in our model. Medicaid program eligibility is means-tested and the standards and methodology used for these tests are chosen by states.14 Our outcome variable measuring Medicaid physician fees is simultaneously determined by the same state-level decision-making process. However, a common pathway for Medicaid eligibility is participation in the federal government’s Supplemental Security Income (SSI) program. Currently, a majority of states use SSI program eligibility criteria to determine Medicaid program eligibility.15 Since the SSI program is uniformly applied across all states, we include the number of elderly and blind-disabled recipients per capita, respectively, to control for the overall generosity of states’ Medicaid programs and the likelihood of resident participation (Yelowitz 1998). Lastly, Medicaid physician fees are typically related with other economic, demographic, and political factors that are changing over time within states. We incorporate the following additional state-year controls to further address concerns of omitted variable bias. The per capita number of active M.D.s and hospitals are included to control for state characteristics that are potentially correlated with shifts in the physician supply function (Gaynor et al. 2014; Gaynor and Haas-Wilson 1999). The per capita number of state residents who are age 65 or older, age 14 or younger, or age 15–44 and female are included to control for level differences in the key demographic populations that Medicaid typically serves. The annual 12 The FMAP is the percentage of state Medicaid spending matched by the federal government. It is calculated as 1 minus 0.45 times the square of the ratio of state per capita income to national per capita income averaged over three years; and is bounded between 50 % for the highest income states and 83 % for the lowest income states. 13 A limited set of physician services were analyzed: a follow-up hospital visit, a follow-up office visit, an inguinal hernia repair, a diagnostic dilation and curettage, a complete blood count, and an electrocardiogram. 14 The income and resource tests each have an associated standard and methodology. A standard is a particular level, below which an individual is deemed eligible. A methodology is the way in which an individual’s income and resources are counted for the purposes of applying the standard. 15 Independent Medicaid eligibility rules are set by the following states: Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, Virginia.

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unemployment rate, per capita state income and the number of Food Stamp Program recipients per capita are included to control for general characteristics of the economic environment prevailing in states and related with welfare program take-up. Lastly, variables measuring the fraction of a state’s legislature that is affiliated with a political party, whether there is currently a unified or divided state legislature, and the partisan affiliation of a state’s governor are included to control for potential effects of the political environment on states’ Medicaid policy. To remove any bias arising from the omission of these sources, Eq. (2) is amended as: ln(Medicaid f ee)ist = β0 + β1 ∗ ln(Medicar e f ee)it + Xst  1 + αi + μs + τt + γs (μs · t) + uist

(3)

where the vector Xst includes Medicare expenditures per recipient expressed as a natural logarithm, the FMAP, and the additional state-year control variables described above. As a final step, we explore whether the effects of Medicare physician fees exhibit any heterogeneity according to the type of physician service. Additional interaction terms between Medicare fees and time-invariant indicator variables corresponding to the type of physician service are specified in Eq. (3). 4.1 Identifying variation The objective of this study is to estimate the response of state governments to changes in Medicare physician fees. To identify our empirical model, we take advantage of a federal policy shift in how Medicare determines the underlying RVUs in Eq. (1). In 1992, Medicare began a transition from a charge-based to a resource-based relative value scale (RBRVS) system for determining Practice Expense and Malpractice Expense RVUs. The American Medical Association and Health Care Financing Administration (now known as the Centers for Medicare and Medicaid Services) began a process of updating the expenses associated with physician services using more recent estimates of resource costs (Johnson and Newton 2002). The policy shift generally worked to increase fees for evaluation and management services, while lowering fees for surgical services (Ginsburg et al. 1990). Our empirical analysis examines physician fees observed during 1998, 2001, and 2004, and over this period there were several adjustments applied to the Medicare RVUs for physician services in our sample. The average RVUs assigned for Practice Expense increased by 12 % then decreased by 2 %, and the average RVUs assigned for Malpractice Expense decreased by 17 % then increased by 20 %. Converting the RVUs into dollar amounts using Medicare’s annual conversion factor (CF) can help illustrate how this variability affected physician service compensation during this time. Using the CF of $36.69, $38.26, and $37.34 in 1998, 2001, and 2004, respectively, average real compensation increased 7 % for Practice Expense from 1998 to 2001 and then decreased by 10 % from 2001 to 2004. Similarly, real compensation for Malpractice Expense fluctuated with a decrease of 21 % from 1998 to 2001 and an increase of 10 % from 2001 to 2004. Identification of our empirical model relies on the assumption that the shift from a cost-based to resource-based pricing system for Medicare physician fees was exogenous to state-level decision-making in setting Medicaid physician fees. 4.2 Data Data from a number of sources are utilized in the empirical model. A description of each source is provided below. The descriptive statistics for the Medicaid physician fees are

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L. L. Howard

reported in Table 7 in Appendix section, and the descriptive statistics for the state characteristics are reported in Table 8 in Appendix section. State-level data on Medicaid physician fees were collected by the American Academy of Pediatrics (AAP) through a periodic Medicaid Reimbursement Survey mailed to the Medicaid Director of each state in 1998, 2001, and 2004. The initial survey in 1998 covered 128 common physician services defined by Current Procedural Terminology (CPT), Fourth Edition codes. The sample only includes the physician services with non-missing state Medicaid fees and nonzero Medicare fees in all three survey rounds, and 86 physician services met this criterion. Missing Medicaid fees resulted in the exclusion of AK, AZ, DE, IN, and MI from the sample. TN was excluded from the sample because it does not have a fee-for-service Medicaid program. After excluding services provided to children and service types with fewer than three observed services, the final sample includes fifty physician services spanning seven types of services: cardiology, consultations, critical care, emergency care, evaluation and management, hospital care, and pulmonology. The sample of state Medicaid fees is balanced across time and unbalanced across states for each physician service. It is beyond the scope of this paper to analyze the determinants of states’ selection of physician services covered under Medicaid. In the empirical analysis, we include state fixed effects to capture the time-invariant differences across states in the number of physician services for which we observe fees in all three survey rounds, and balancing observed physician fees within states across all three survey rounds removes any potential time-varying selection bias from the estimates. Variables measuring Medicare physician fees, state-specific average Medicare health care spending per recipient, and state-specific total private health care expenditures are constructed from data obtained from the U.S. Department of Health and Human Services. FMAPs for each state are obtained from the Green Book, and state income data come from the U.S. Bureau of Economic Analysis. The number of active M.D.s and hospitals in each state over this period are reported by the American Medical Association and the American Hospital Association, respectively. Data collected on Supplemental Security Income (SSI) recipients from the U.S. Social Security Administration is used to construct per capita measures of elderly SSI and blind-disabled SSI recipients, and a per capita measure of Food Stamp Program participants is constructed with data obtained from the U.S. Department of Agriculture. The percentage of a state’s population that is female and between the ages of fifteen and 44, the percentage of a state’s population age fourteen or younger, and the percentage of a state’s population age 65 or older are reported by the U.S. Census Bureau. State annual unemployment rates come from the U.S. Bureau of Labor Statistics. Lastly, data on the partisan affiliation of state governors, the partisan composition of state legislatures, and the fraction of a state’s legislature that is affiliated with the Democrat party are obtained from the National Conference of State Legislatures.

5 Results Column 2 of Table 3 presents the baseline estimate of β1 in Eq. (2), which measures the conditional elasticity of Medicaid physician fees with respect to Medicare fees. The point estimate of 0.352 is significant at the 5 % level and implies that a 10 % increase in the Medicare fees defined in Eq. (1) results in a 3.52 % increase in Medicaid fees, on average. Column (1) presents the estimated elasticity under the assumption that γs is equal to zero and a small upward bias is evident in this case. While the point estimates of β1 are not significantly different from one another, all of the state-specific time trends are significant at the 5 % level.

123

A longitudinal analysis of physician fees, 1998–2004 Table 3 Estimated effects of Medicare physician fees, total Medicare health care expenditures per recipient, and total private health care expenditures per capita on Medicaid physician fees Explanatory variable

Dependent variable Ln(Medicaid physician fee) (1)

Ln(Medicare physician fee)

(2)

(3)

(4)

0.357*

0.352*

0.352*

0.353*

(0.066)

(0.066)

(0.066)

(0.066)

Ln(Medicare health care expenditures per recipient)

−1.998*

−2.056*

(0.803)

(0.786) −0.493

Ln(Private health care expenditures per capita)

(0.644) Physician service fixed effects

×

×

×

×

State fixed effects

×

×

×

×

Year fixed effects

×

×

×

×

×

×

×

State-specific trends Observations

6,087

6,087

6,087

6,087

R2

0.847

0.854

0.855

0.855

Notes Standard errors are reported in parentheses and adjusted for state-level clustering. * Significant at 5-percent level.

To assess the omitted variable bias arising from the exclusion Medicare GPCIs, we include the natural logarithm of the GPCI-adjusted value of total Medicare health care expenditures per recipient in the model defined in Eq. (2). Column (3) reports the estimates, and although the point estimate of −1.998 is significant at the 5 % level. The point estimate of β1 remains at 0.352 and significant at the 5 % level. Finally, we assess the omitted variable bias arising from the exclusion of health care price levels for private insurers and payers. Column (4) includes the natural logarithm of the private health care expenditures per capita in states. The estimate of β1 is slightly higher in magnitude at 0.353. We next turn to exploring whether the elasticity of Medicaid physician fees with respect to Medicare fees is possibly correlated with other omitted state characteristics that are changing over time. Table 4 presents estimates from the specifications in Eq. (3). The point estimate of β1 is 0.352 and remains significant at the 5 % level.16 An inverse relationship between Medicaid physician fees and Medicare health care expenditures per recipient and between Medicaid physician fees and total private health care expenditures per capita is evident, which suggests that states with higher price levels for health care services set Medicaid physician fees lower in an attempt to control program costs. Finally, the point estimate of 4.27 for the effect of the FMAP on Medicaid physician fees is significant at the 5 % level; a 1 % increase in the FMAP is associated with a 4.27 % increase in Medicaid physician fees, on average. The relationship we find between Medicaid fees and FMAPs is only estimated off of within state variation for the lowest income states as seven of the highest income states were at the

16 The null hypothesis that β is equal to one is rejected (P < 0.0001), which implies that transforming the 1

outcome as the ratio of Medicaid-to-Medicare fees is not statistically supported by the data in this context.

123

L. L. Howard Table 4 Estimated effects of state-level characteristics, Medicare physician fees, total Medicare health care expenditures per recipient, and total private health care expenditures per capita on Medicaid physician fees Explanatory variable

Dependent variable Ln (Medicaid physician fee) Coefficient

SE

Ln(Medicare physician fee)

0.352*

0.07

Ln(Medicare health care expenditures per recipient)

−3.87*

0.78

Ln(Private health care expenditures per capita)

−1.44*

0.68

Federal medical assistance percentage

4.27*

1.84

State income per capita

−0.00001

0.00003

Active M.D.s per capita

378.77

663.53

Hospitals per capita

−7,491.71

16,650.69

Elderly SSI recipients per capita

−295.19

198.30

Disabled SSI recipients per capita

55.12

45.52

Food stamp recipients per capita

−1.35

3.14

Residents age 65 or older per capita

5.12

14.58

Residents age 14 or younger per capita

11.87

9.35

Female residents age 15–44 per capita

21.59

11.61

Annual unemployment rate

2.85

3.63

Fraction of state legislature that is Democrat

0.70

0.57

Democrat controlled state legislaturea

−0.44*

0.12

Divided state legislaturea

−0.23*

0.08

Democrat state governora

0.003

0.04

Independent state governora

−0.00002

0.08

Constant

37.39*

9.65

Physician service fixed effects

×

State fixed effects

×

Year fixed effects

×

State-specific trends

×

Observations

6,087

R2

0.856

Notes Standard errors are adjusted for state-level clustering a States with Republican governors and Republican controlled state legislatures are the reference group. * Significant at 5-percent level.

minimum boundary of the FMAP over the entire period.17 Among the states experiencing FMAP variability, the average change during this period was approximately 1 %. 5.1 Do state responses differ by physician service type? We now turn to exploring whether states adjust physician fees differently according to the type of service. Indicator variables for six of the seven physician service types in the sample 17 The states with a constant FMAP of 50 % for 1998-2004 were CT, IL, MD, MA, NH, NJ, and NY. See

Table 9 in the appendix for details.

123

A longitudinal analysis of physician fees, 1998–2004 Table 5 Estimated effect of Medicare physician fees on Medicaid physician fees by service type Explanatory variable

Dependent variable Ln(Medicaid physician fee) Coefficient

Ln(Medicare physician fee)a

SE

0.29

0.16

× Cardiology

0.37

0.26

× Consultations

0.04

0.13

× Critical Care

0.38

0.20

−0.05

0.13

× Emergency Care × Evaluation and management

0.05

0.19

× Pulmonology

0.06

0.14

Observations

6,087

R2

0.857

Notes Standard errors are adjusted for state-level clustering. The regression includes all explanatory variables, fixed effects, and state-specific trends shown in Table 4 a Hospital care services are the reference group

Table 6 Estimated elasticity of Medicaid physician fees with respect to Medicare physician fees by service type Service type

Elasticity

SE

Cardiology

0.66*

0.17

Consultations

0.33*

0.14

Critical care

0.67*

0.10

Emergency care

0.24*

0.08

Evaluation and management

0.34*

0.14

Hospital care

0.29

0.16

Pulmonology

0.34*

0.11

Notes Elasticities are calculated using the regression estimates reported in Table 5. Standard errors are adjusted for state-level clustering * Significant at 5-percent level

are constructed, with hospital care services serving as the reference group, and then interacted with the natural logarithm of Medicare physician fees. Table 5 presents the regression estimates and we do not see significant differences relative to hospital care services. To better illustrate the estimated range in the total effect of Medicare physician fees we calculate estimates for each service type. Table 6 presents the estimated elasticities and standard errors derived from a linear combination of the point estimates shown in Table 5. An insignificant relationship between Medicaid physician fees and Medicare fees is only evident for hospital care services. Cardiology and critical care services have estimated elasticities of 0.66 and 0.67, respectively. However, the estimated elasticity for cardiology is only statistically different from the elasticity for emergency care (P < 0.040), and the estimated elasticity for critical care is only statistically different from the elasticity for emergency care (P < 0.002) and pulmonology (P < 0.046).

123

L. L. Howard

6 Conclusions This study presents the first longitudinal analysis of the factors determining states’ Medicaid physician fees for fifty services commonly provided to patients. Several insights are evident from the results. First, on average, states adjust their physician fees in response to changes in how Medicare calculates the fees it pays physicians. The elasticity estimates indicate that a 10 % increase in Medicare physician fees changes the fees states set for the same physician services by a range of approximately 2–7 %, with an average increase of 3.5 % across all services. Of the seven types of physician services examined, only hospital care service fees are found to have an insignificant relationship with Medicare fees. This suggests that the Medicaid program does not compete with Medicare by adjusting reimbursement prices for patient access to basic hospital care. In this case, a lack of competition is consistent with providers having enough capacity to serve all Medicare and Medicaid patients at relatively lower market prices (Sloan et al. 1978a,b). In contrast, estimated elasticities for cardiology and critical care services are found to be higher at 0.7, and in the lower range of 0.2–0.3 for consultations, emergency care, evaluation and management, and pulmonology services. Current physician capacity for these services may be limited at the marginal buyer’s fee, which is typically determined by the Medicaid program. Using Medicare data, Kleiner et al. (2012) show that markets for cardiology services and other specialists are relatively more concentrated compared to markets for primary care services. As Medicare increases its fees, it may pressure states to raise fees in order to ensure that all Medicaid patient demand is satisfied. On the other hand, the sufficiency of ex ante and ex post physician service capacity may differ if physicians induce patient demand to offset income losses from fee changes. McGuire and Pauly (1991) show that volume adjustments are predicted to be larger among physicians that derive a significant share of income from Medicare and Medicaid patients, which are typically markets for specialty services. For instance, Mitchell et al. (2002) provide evidence of volume adjustments for physicians specializing in ophthalmology. Additional empirical research would help to clarify the extent to which Medicaid competes with Medicare for access to physician services. A limitation of the present study is that only subsets of Medicaid physician service fees were sampled. The estimated relationships may not hold more generally across all available physician services. Second, earlier studies have shown that the ratio of a state’s Medicaid physician fee to the Medicare physician fee is an important predictor of physician service quality and health outcomes of Medicaid patients. For instance, Gray (2001) finds that a higher Medicaid-toMedicare physician fee ratio improves health outcomes among newborns, Decker (2007) finds that a higher fee ratio increases the duration of office visits, and Decker (2009) finds that a higher fee ratio increases the frequency with which Medicaid patients visit a physician. This study shows that expressing Medicaid fees relative to Medicare fees conceals the responses of states to changes in Medicare fee formulation. For example, estimates indicate an elasticity of 0.34 for evaluation and management services. The inelastic response of Medicaid fees to Medicare fees suggests that a reduction in Medicare fees will actually increase the Medicaid-to-Medicare physician fee ratio and improve patient outcomes. Any changes in the methodology used to determine Medicare RVUs for physician services have important consequences for the populations served by programs as states and physicians respond to the information contained in Medicare fee schedules. Finally, the FMAP is the federal government’s primary policy lever for affecting state spending on Medicaid, and it was originally implemented as a strategy to help equalize the low-income population’s access to and the quality of covered health care services across

123

A longitudinal analysis of physician fees, 1998–2004

states. We find that a significant and positive relationship between states’ FMAPs and Medicaid physician fees is evident over the period 1998–2004. On average, a 1 % increase in the FMAP is associated with an approximate 4 % increase in Medicaid physician fees. Federal matching grants have an important role in ensuring access to physician services and improving the health of Medicaid patients. As program expenditures continue to grow, cost containment efforts of the federal government may focus on eliminating the matching grant system; however, a transition to a conditional block grant system of financing Medicaid, as was carried out with federal-state cash assistance in the 1990s, would have a significant negative impact on critical aspects of patient health care. For instance, lower Medicaid physician fees would diminish patient access to physician services at the extensive and intensive margins (Decker 2007). Such a transition would also remove a key policy lever known to impact patient health through adjustments in state spending. Any future Medicaid eligibility expansions, such as those associated with the implementation of the Patient Protection and Affordable Care Act (U.S. Congress 2010), would most likely need to be combined with changes in federal policies targeting Medicaid physician fees in order to ensure physicians are willing to serve the additional patients. Acknowledgments The author thanks Chava Sheffield at CMS for help with acquiring the earlier Medicare data and a reviewer for helpful comments on an earlier draft.

7 Appendix See Tables 7, 8 and 9.

123

123 93501 93510

Right heart catheterization

Left heart catheterization

99243 99244 99245 99254 99255

Office visit, low complexity

Office visit, intermediate complexity

Office visit, high complexity

Initial inpatient visit, moderate complexity

Initial inpatient visit, high complexity

36620 99291 99292

Arterial line placement

Evaluation and management, first hour

Evaluation and management, additional 30 min

31500 36600

Intubuation, endotracheal

Arterial puncture, diagnostic

Critical Care

99242

Office visit, straightforward decision

Consultations

93320

Doppler echocardiography

42

43

43

42

43

43

43

44

44

44

44

40

40

42

41

36

93303 93307

Transthoracic echocardiography

Echocardiography, real-time with image documentation

38

32020 92950

41

# of states

Thoracostomy tube

CPTa code

Cardiopulmonary resuscitation

Cardiology

Physician service

Table 7 Descriptive statistics for Medicaid physician fees by service type

76.82

154.29

73.08

24.34

107.31

145.45

114.78

144.96

115.33

87.04

68.40

1004.57

599.12

115.02

199.38

200.62

178.15

228.47

29.17

58.71

28.74

14.13

41.12

53.15

36.61

51.28

34.77

24.72

17.76

664.31

297.71

52.41

76.26

71.65

66.88

92.74

78.70

155.08

65.87

24.23

99.36

146.95

113.60

153.97

121.42

90.03

71.51

1028.54

579.04

100.00

173.32

180.75

172.41

199.75

Mean

Mean

SD

2001

1998

26.49

51.02

27.12

12.83

30.52

50.89

35.45

55.17

38.96

28.44

20.31

650.65

298.35

53.25

75.43

71.87

80.69

80.32

SD

84.28

174.53

56.31

23.60

94.47

155.72

116.82

167.26

130.31

94.98

73.04

1159.95

603.92

87.08

166.27

182.17

162.71

205.44

Mean

2003

27.31

57.75

21.31

11.27

31.97

50.11

34.99

56.79

42.64

29.59

21.38

579.90

275.38

30.68

53.99

52.49

60.54

89.34

SD

L. L. Howard

42 42 42

36410 62270 99282 99283 99284

Venipuncture necessitating physician skill, over 3 years of age

Lumbar puncture, diagnostic

Visit, low complexity

Visit, intermediate complexity

99215

Established Patient, high complexity

40

99213 99214

Established Patient, low complexity

99212

Established Patient, expanded office visit

Established Patient, intermediate complexity

40

99211

Established Patient, office visit

40

40

40

39

40

99204 99205

New Patient, intermediate complexity

40

New Patient, high complexity

99203

New Patient, low complexity

40

40

99201 99202

New Patient, office visit

99354

New Patient, expanded office visit

30

99217

Prolonged service, 1 h, face-to-face

33

37

Observation care discharge

Evaluation and Management

Visit, high complexity

41

12015

41

10120

43

# of states

Simple surgical removal of foreign body

CPTa code

Simple surgical repair of facial wound (7.6–12.5 cm)

Emergency Care

Physician service

Table 7 continued

84.92

58.99

41.00

31.88

19.99

129.71

87.93

63.00

48.32

35.12

82.50

52.05

72.00

50.49

33.71

69.87

22.28

141.92

54.03

26.17

17.51

16.79

17.21

18.87

142.82

27.79

19.98

17.24

17.24

28.81

19.28

30.14

17.57

9.57

29.42

12.08

57.85

38.23

87.40

60.00

41.01

32.05

20.84

117.25

95.63

67.85

50.84

35.71

88.13

50.30

73.26

50.34

32.17

82.23

20.44

155.64

57.79

Mean

Mean

SD

2001

1998

28.08

17.73

8.95

6.50

12.96

46.23

34.88

22.79

14.17

7.56

27.91

18.26

28.28

16.60

10.17

40.51

8.87

63.72

25.40

SD

95.24

66.79

45.03

34.23

21.54

132.57

106.00

75.46

53.67

35.18

88.15

53.25

78.37

51.65

29.52

102.42

18.50

162.18

64.80

Mean

2003

28.01

18.49

14.43

14.18

15.70

46.23

34.07

23.45

16.36

14.09

24.66

18.99

24.44

13.66

8.19

62.30

8.83

72.68

32.25

SD

A longitudinal analysis of physician fees, 1998–2004

123

123 99233 99238

Subsequent hosptialization, high complexity

Hospital discharge, under 30 min

32000 94010

Spriometry, including graphic record

40

41

41

39

43

41

42

Note Medicaid physician fees are adjusted for inflation using the CPI in 2011 dollars. Source American Academy of Pediatrics Medicaid Reimbursement Survey. a Current Procedural Terminology, Fourth Edition

31622

Bronchoscopy

Thoracentesis

Pulmonology

99232

Subsequent hosptialization, intermediate complexity

43

99223 99231

Initial hosptialization, high complexity

43

99222

Subsequent hosptialization, low complexity

42

99221

Initial hosptialization, low complexity

Initial hosptialization, intermediate complexity

37 37

99219 99220

Initial observation, intermediate complexity

Initial observation, high complexity

37

# of states

99218

CPTa code

Initial observation, low complexity

Hospital Care

Physician service

Table 7 continued

34.20

89.91

259.63

50.76

66.95

45.99

33.98

114.13

91.89

59.37

115.35

91.14

59.63

11.39

51.48

96.81

19.53

28.70

14.58

10.71

46.98

34.29

18.04

41.08

30.18

19.01

31.12

99.09

243.93

51.48

63.85

44.87

31.34

116.44

90.38

58.12

115.56

87.58

57.59

Mean

Mean

SD

2001

1998

11.33

45.13

99.24

18.11

23.03

13.36

8.44

44.35

32.26

17.51

39.95

28.77

18.15

SD

28.98

118.85

218.03

55.80

67.15

46.02

30.69

119.27

92.02

57.70

121.98

92.75

57.98

Mean

2003

9.81

66.14

81.56

18.12

22.81

13.12

7.23

43.73

29.07

15.84

42.23

28.58

18.01

SD

L. L. Howard

A longitudinal analysis of physician fees, 1998–2004 Table 8 Descriptive statistics for state characteristics Variable

1998 Mean

2001 SD

Mean

2003 SD

Mean

SD

Medicare health care expenditures per recipient 6,608

1,145

7,127

1,080

8,134

1,195

Private health care expenditures per capita

315

3,726

373

4,240

476

3,452

Federal medical assistance percentage

0.607

0.087

0.608

0.089

0.609

0.088

State income per capita

36,165

5,509

37,188

5,822

38,088

5,666

Active M.D.s per capita

0.002

0.001

0.002

0.001

0.003

0.001

Hospitals per capita

0.00003 0.00002 0.00002 0.00001 0.00002 0.00001

Elderly SSI recipients per capita

0.004

0.002

0.003

0.002

0.003

Disabled SSI recipients per capita

0.018

0.008

0.018

0.008

0.019

0.008

Food stamp recipients per capita

0.072

0.025

0.063

0.024

0.082

0.030

0.002

Residents age 65 or older per capita

0.129

0.018

0.127

0.017

0.127

0.016

Residents age 14 or younger per capita

0.213

0.015

0.209

0.014

0.204

0.016

Female residents age 15–44 per capita

0.221

0.008

0.215

0.007

0.209

0.007

Annual unemployment rate

0.043

0.010

0.044

0.009

0.051

0.009

Fraction of state legislature that is Democrat

0.517

0.177

0.508

0.176

0.495

0.174

Democrat controlled state legislature

0.432

0.501

0.341

0.479

0.432

0.501

Divided state legislature

0.250

0.438

0.318

0.471

0.205

0.408

Democrat state governor

0.341

0.479

0.364

0.487

0.364

0.487

Independent state governor

0.000

0.000

0.045

0.211

0.000

0.000

# of states

44

44

44

Notes Sample means and standard deviations reported. States not included in the sample for any physician service are AK, AZ, DE, IN, MI, and TN. Medicare health care expenditures are adjusted by geographic practice cost indices. Medicare health care expenditures, private health care expenditures and state incomes are adjusted for inflation using the CPI in 2011 dollars. Sources American Hospital Association, American Medical Association, National Conference of State Legislatures, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, U.S. Census Bureau, U.S. Department of Agriculture, U.S. Department of Health and Human Services, U.S. Social Security Administration.

123

L. L. Howard Table 9 Federal medical assistance percentages by state: 1998, 2001, and 2004 State

1998

2001

2004

Difference 2001–1998

Difference 2004–2001

AL

69.32

69.99

70.75

0.67

AR

72.84

73.02

74.67

0.18

1.65

CA

51.23

51.25

50.00

0.02

−1.25

CO

51.97

50.00

50.00

−1.97

0.00

CT

50.00

50.00

50.00

0.00

0.00

FL

55.65

56.62

58.93

0.97

2.31

GA

60.84

59.67

59.58

−1.17

−0.09

HI

50.00

53.85

58.90

3.85

5.05

ID

69.59

70.76

70.46

1.17

−0.30

IL

50.00

50.00

50.00

0.00

0.00

IA

63.75

62.67

63.93

−1.08

1.26

KS

59.71

59.85

60.82

0.14

0.97

KY

70.37

70.39

70.09

0.02

−0.30

LA

70.03

70.53

71.63

0.50

1.10

ME

66.04

66.12

66.01

0.08

−0.11

MD

50.00

50.00

50.00

0.00

0.00

×

MA

50.00

50.00

50.00

0.00

0.00

×

MN

52.14

51.11

50.00

−1.03

−1.11

MS

77.09

76.82

77.08

−0.27

0.26

MO

60.68

61.03

61.47

0.35

0.44

MT

70.56

73.04

72.85

2.48

−0.19

NE

61.17

60.38

59.89

−0.79

−0.49

NV

50.00

50.36

54.93

0.36

4.57

NH

50.00

50.00

50.00

0.00

0.00

×

NJ

50.00

50.00

50.00

0.00

0.00

×

NM

72.61

73.80

74.85

1.19

1.05

NY

50.00

50.00

50.00

0.00

0.00

NC

63.09

62.47

62.85

−0.62

0.38

ND

70.43

69.99

68.31

−0.44

−1.68

OH

58.14

59.03

59.23

0.89

0.20

OK

70.51

71.24

70.24

0.73

−1.00 0.81

0.76

OR

61.46

60.00

60.81

−1.46

PA

53.39

53.62

54.76

0.23

1.14

RH

53.17

53.79

56.03

0.62

2.24

SC

70.23

70.44

69.86

0.21

−0.58

SD

67.75

68.31

65.67

0.56

−2.64

TX

62.28

60.57

60.22

−1.71

−0.35

UT

72.58

71.44

71.72

−1.14

0.28

VT

62.18

62.40

61.34

0.22

−1.06

VA

51.49

51.85

50.00

0.36

−1.85

123

No change

×

×

×

A longitudinal analysis of physician fees, 1998–2004 Table 9 continued State

1998

2001

2004

Difference 2001–1998

Difference 2004–2001

WA

52.15

50.70

50.00

−1.45

-0.70

WV

73.67

75.34

75.19

1.67

-0.15

WI

58.84

59.29

58.41

0.45

-0.88

WY

63.02

64.60

59.77

1.58

-4.83

No change

Source US House Ways and Means Committee Green Book

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Do the Medicaid and Medicare programs compete for access to health care services? A longitudinal analysis of physician fees, 1998-2004.

As the demand for publicly funded health care continues to rise in the U.S., there is increasing pressure on state governments to ensure patient acces...
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