For most doctors, Medicaid patients are a losing proposition.
It’s hard to find anybody opposed to healthcare for the poor.
In the past, most doctors took on Medicaid patients –- which were relatively few in number — as a public service.
Some took Medicaid patients to fill empty appointment slots and, thus, increase capacity utilization (think, airlines filling empty seats).
But, an increasing number of doctors are demotivated to serve Medicaid patients.
What’s the problem?
Let’s start with basic economics.
The reimbursement rates are far less than the rates paid by private-pay patients, are inevitably less than doctors’ fully-loaded costs-to-serve, and are less than many (most?) doctors’ marginal costs-to-serve.
In other words, the doctors lose money – on both an opportunity cost basis and on an out-of-pocket basis.
That’s certainly not motivating.
Adding to the misery, according to several doctors I’ve spoken to, Medicaid patients account for a disproportionate number of appointment “no shows” causing havoc with scheduling.
That’s simple behavioral economics.
People generally ascribe low or no value to a “free good” … and, if there are no cancellation or change fees, so what if something comes up and you have to cut an appointment?
The bottom line is that many doctors have stopped accepting new Medicaid patients … as a first step to managing out of Medicaid entirely.
With the Medicaid expansion, the demand for Medicaid services has increased.
The supply of doctors is going down as some stop serving Medicaid patients.
That’s basic economics.
And, arguably, the quality of doctors serving Medicaid patients is going down … with only underutilized doctors serving Medicaid patients.
In fact, according to Forbes, “Piles of studies have shown that people on Medicaid have health outcomes that are no better, and often worse, than those with no insurance at all.”
Doesn’t sound like a good prescription to me.