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Does expanding insurance coverage improve access to care?

February 27, 2012 in CHIP, Health Reform, Medicaid | 3 comments

Although Health Reform did little to reduce the cost of health care, it did make significant strides to expand access to care.  For low-income individuals, the increased access comes along two dimensions: expanded Medicaid eligibility and increased physician fees.  Specifically, Health Reform required to

  • Make all individuals with incomes below 138% of the Federal Poverty Line (FPL) eligible for Medicaid, and
  • Increase their Medicaid physician fee schedules, so that they are no lower than Medicare’s for evaluation and management services provided by primary care physicians.

Whereas the first provision is permanent, the second provision is to be in effect only for 2013 and 2014.

Which one will have a bigger effect? According to a paper by White (2012), paying doctors more improves access.

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Access to health insurance ≠ Access to health care.

June 27, 2011 in Health Insurance, Health Reform, Public Policy | 3 comments

Is the Massachusetts health reform a success?  Yes and no.

In terms of increasing access to health care, it has been an unqualified success.  According to the Economist, only1.9% of Massachusetts residents were uninsured in 2010.

Massachusetts’ health reform has not been able to offer universal access to health care or to constrain costs. “ One in five working-age adults say they have trouble finding a doctor who will see them…Spending on MassHealth, the programme for the poor, rose 40% between 2006 and 2010….average monthly premiums rose by 12% between 2006 and 2008. True, a higher share of firms now offer coverage, but they are also shifting costs for that coverage to employees”

Massachusetts is trying to legislatively block health premium increases.  Reducing health insurance cost, however, will likely drive down provider reimbursement and either increase cost sharing or decrease access to health care.

The key takeaway from this post is the following: “Access to health insurance does not guarantee access to health care.”

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Medicare Payment Adequacy

May 26, 2011 in Medicare, Public Policy | 2 comments

How do policymakers  determine if Medicare payment levels are adequate?  The Medicare Payment Advisory Commission (MedPAC) uses the following criteria:

  • Access to care determined by the number of providers and volume of services.
  • Quality of care
  • Provider access to capital
  • Provider margins.

Although these measures do provide valuable information, they are far from perfect.  Access to care basically means whether beneficiaries have the opportunity to use medical services should they need it.  This could be defined as the proximity of the closest provided or the length of time a beneficiary must wait to receive services.  If certain types of people use lots of services whereas others use few, overall volume of services will be an imprecise measure of access.  Further, the number of providers may obscure geographic variation where certain areas contain too many providers whereas others have too few.

Provider margins is also problematic.  Although aiming to set payments to produce moderate margins (i.e., not excessive, but sufficient to ensure continued provider operations) is reasonable, cost information comes directly from the providers.  Acute care hospitals, skilled nursing facilities (SNFs), home health agencies (HHAs), outpatient dialysis facilities, inpatient rehabilitation facilities (IRFs), long-term care hospitals (LTCHs) and hospices all must submit cost reports.  However, these providers may decide to inflate their costs.  Reporting higher costs will decrease their margins and may cause Medicare to increase payment rates.  At the very least, these providers can argue for higher reimbursement because of artificially low margins.  Medicare must be sure to carefully audit these reports if it plans to continue using them for payment purposes.

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Trends in Medi-Cal Reimbursement

March 22, 2011 in Medicaid | No comments

Medicaid provides a safety net for the poorest Americans.  Although eligibility criteria vary from state to state, the health service Medicaid provides are often life saving.  One of the main problems Medicaid beneficiaries experience, however, is access to care.  Many physicians do not accept Medicaid because the reimbursement rates are much lower than those paid by either Medicare or private insurers.

California’s Medicaid program, named Medi-Cal, certainly has some of these access problems.  According to CHCF, California ranked 47th in the generosity of their Medicaid fees when these figures were adjusted for geographic differences in the cost of providing health care.

This same CHCF study revealed the following conclusions:

  • Overall, Medi-Cal fees were 83% of the Medicaid national average in 2008. Among the ten largest state Medicaid programs, California ranks 9th.
  • Considerable variation exists in Medi-Cal fees across procedures in relation to national averages, with relative fees ranging from less than 70% to more than 140% of the national average.
  • From 2003 to 2008, Medi-Cal physician fees grew, on average, by only 2%. This compares to 15% growth in average Medicaid fees nationwide and 21% general inflation during this period.
  • In particular, while evaluation and management (E&M) fees increased 20% nationwide between 2003 and 2008, Medi-Cal fees only rose by 4% over this time period.  National fees for vision services increased by 21%, but decreased by 15% in California.
  • Low average Medi-Cal reimbursement extends to dental care, with fees for most procedures falling short of those for Medicaid nationally.

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