Medicaid Expansion May Fail Because of Doctors' Refusal to See Patients

There has been much discussion lately about the physician shortage in America and the effect that it might have on access to care if insurance coverage is expanded. For example, a recent survey of hospital executives found that, in their view, the doctor shortage is worsening and is likely to be exacerbated by healthcare reform. Massachusetts, which has reduced its uninsured rate to the lowest in the U.S., has discovered there are not enough primary-care doctors in the state to take care of everyone.

What has received less attention is the potential impact of the major Medicaid expansion proposed in the House and Senate reform bills. By requiring states to cover everyone (not just children and mothers) in households earning less than 133 percent of the federal poverty level, it is estimated, the legislation would add about 15 million new people to the Medicaid rolls. That doesn't even begin to equal the need: two-thirds of the uninsured are poor or near-poor, and the House and Senate bills would leave 18 million and 24 million people, respectively, without coverage by 2019. But even if we raise the number of people on Medicaid from 35 million to 50 million, will there be enough physicians willing to see them?

Nicholas D. Kristof, in a heartbreaking column in today's New York Times, tells the story of an Oregon sawmill worker who developed an abnormal growth in his brain that prevented him from working or functioning normally. He lost his job and his insurance, and had to be rushed to the ER periodically. After he and his wife had spent all their savings, he wound up on Medicaid. Surgeons could have cured him with a procedure, but they refused to take Medicaid because it paid so little.

This is the story, not only in Oregon, but across the country. By one estimate, state Medicaid programs pay, on average, only 60 percent as much as private insurance does. As a result, many physicians will not see Medicaid patients. A recent study found that 28 percent of physicians don't accept Medicaid patients, and 19 percent accept some. Only 40 percent will take anybody on Medicaid.

Primary-care physicians have an even more dismal track record. Forty percent of general internists, 35 percent of family physicians and GPs, 18 percent of pediatricians, and 28 percent of ob/gyns do not accept any Medicaid patients. Thirty-one percent of internists and FP/GPs take all Medicaid patients, 42 percent of pediatricians do, and 34 percent of ob/gyns do.

There are good reasons why many physicians don't take Medicaid or only some Medicaid patients. Some are too busy to see any new patients, and others who are in poverty-stricken areas might go out of business if they accepted too many Medicaid patients. Indeed, physicians have told me that they lose money on every Medicaid recipient that they see.

As with so much else in healthcare, none of the policy solutions is very palatable. First, the Congressional reformers could mandate a minimum level of reimbursement for Medicaid providers; but the federal government would have to supply all of the additional funds, which would certainly break the budget, and the effort would be hampered by the physician shortage. Second, the government could require physicians to take Medicaid patients as a condition of Medicare participation; but that could threaten the viability of the Medicare program if doctors began dropping out.

Third, the government could start investing a lot more in community health centers over the next few years. While this would also cost billions of dollars, it would not depend on a rapid expansion of the physician workforce or the number of doctors willing to take Medicaid. In a computerized community health center organized as a medical home, physicians could direct teams of nurse practitioners, physician assistants and other health professionals to meet the needs of the new Medicaid recipients. And perhaps these same centers could help care for the many middle-class uninsured who will be getting covered through the proposed healthcare exchanges.