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Healthcare Markets & Regulations

Rewarding Physicians to Take Medicaid Patients 

Do physicians turn away Medicaid patients because they are paid less to see them than their other patients on private insurance or Medicare? Are doctors more likely to provide care to Medicaid patients if they are paid more? To answer these questions, IPR economist Molly Schnell and Diane Alexander of the Federal Reserve Bank of Chicago examine what happened when federal regulations required states to increase their Medicaid payments for certain primary care services to match Medicare’s levels of payment. In an IPR working paper, the economists discover that increasing payments did decrease the number of Medicaid patients turned away by doctors. If Medicaid reimbursement rates were increased by an estimated $45—enough to close the gap in payments between private insurance and Medicaid on average—it would reduce disparities in access to care by at least 70%. For children, the effect would be even larger. Although policymakers and others have argued that raising reimbursement rates by itself would not improve Medicaid recipients’ access to healthcare, the researchers’ findings demonstrate that increased reimbursements do lead to physicians treating more Medicaid patients.

How Legal and Illegal Drug Markets Affect Opioid Prescriptions 

In another working paper, Schnell examines how the entwined nature of legal and illegal drug markets has affected the U.S. opioid epidemic. Schnell designs and estimates a supply-and-demand model of how physicians’ prescribing behavior changes when they know patients have access to an illegal secondary market. Her model allows physicians to be motivated both by concern for patient health and their own financial gain. She identifies that spectrum of motivation by observing which doctors were altruistically motivated, and more or less likely to prescribe a new opioid that was less addictive, but also less profitable. The research shows that physicians decrease the number of opioid prescriptions they write to account for the secondary market, with more altruistic providers adjusting their prescribing the most. Despite this reduction in prescriptions, she finds that the total amount of opioid prescriptions is still too high. Her estimates suggest that feedback between legal and illegal markets limits the effectiveness of policies aimed at curbing abuse. To address the crisis, it will be key to target both the initial flow of medications from providers in the legal market as well as the exchange of medications across patients on the illegal market.

Measuring Cancer Caregivers’ Quality of Life 

Spouses, family members, and friends are key caregivers to cancer patients. Although there are measures of the impact on an unpaid caregiver of caring for someone with cancer, they are outdated and do not address the current reality of cancer patients living longer with treatments or the adaptations caregivers make in their careers and other parts of their lives. IPR associate David Cella, professor and founding chair of medical social sciences, examined the topic with four U.K. colleagues. They developed and tested a new scale to assess caregivers’ quality of life and their burdens, specifically for those who care for cancer patients. Caregivers, who were nominated by the patients, were interviewed in depth about their experiences. The researchers refined existing questions and created new ones based on the feedback from subsequent waves of interviews and administrations of the survey. Their “Caregiver Roles and Responsibilities Scale” consists of 41 questions in five areas of caregiver experience. The authors tested for validity against other scales and found their new measure to be a promising tool for assessing the effects of cancer and its treatment on the family and friends who care for cancer patients. Cella is the Ralph Seal Paffenbarger Professor, Chair of the Department of Medical Social Sciences, and Director of the Institute for Public Health and Medicine (IPHAM) - Center for Patient-Centered Outcomes.