The secret to getting doctors to see more Medicaid patients - pay them

For all its difficulties, Medicaid, the public insurance program for the poor, provides great coverage. In most states, it covers almost any health care service you may need. But there can be one big catch – you have to find a doctor who accepts it.

Almost every hospital accepts Medicaid. Nonprofit hospital must accept it by law, and most for-profit hospitals need the reimbursement the program provides for low-income patients.

But doctors have more leeway to turn down Medicaid, and most of them do.

Critics of the program say doctors avoid it because the program is fundamentally flawed. They see the government bureaucracy that runs it as the main culprit and argue that Medicaid will never work smoothly in its present form.

But Medicaid supporters say the problem boils down to something much simpler – money. Medicaid reimburses doctors at the lowest rates of any payer in the country. Its rates are so low that doctors often lose money on every patient they see. Pay them more, and accepting Medicaid would not be a problem.

Obamacare put this theory to the test. For the past two years, it funded an increase in Medicaid reimbursement for primary care to match the higher amounts paid by Medicare.

How did doctors respond to being paid more? A study just published in the New England Journal of Medicine by researchers at the University of Pennsylvania found that the payment bump had the desired effect. During the time it was in effect, Medicaid patients had an easier time finding care. (To read the report of the study, click here.)

The study used trained callers, who tried to schedule appointments with physicians in 10 states, including Pennsylvania and New Jersey, before and while the payment bump was in effect. Some posed as patients with Medicaid coverage and some as patients with private insurance.

Those callers who claimed to have coverage under Medicaid found that appointment slots were almost 8% more available during the period of higher reimbursement than before it. And the increase was larger in states where the payment bump was higher. The callers who claimed to have coverage under private insurance found no difference in the ability to schedule appointments.

Medicaid, it seems, works better if providers are paid enough to make ends meet. The problem is finding the funding to pay doctors at that level. Medicaid reimbursement rates are low because states can't afford to pay more. In many of them, Medicaid is already the largest single part of the budget. The ACA payment bump was initiated in the hope that some states would choose to extend the higher payments on their own. But it is unlikely that any will be able to come up with the funds needed to do so.

So, if you are having trouble finding a doctor who takes Medicaid, things may not improve much any time soon. But we know how to fix things. It is not to change Medicaid's basic structure. It is to apply simple economics.

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