The ACA provision to increase the fees paid to primary care physicians who serve Medicaid patients is based partly on the plausible intuition that raising Medicaid fees for primary care will improve access to, and use of, physician services and in turn improve health, for example, by reducing the number of hospital admissions for ACS conditions. However, there is only limited evidence to support this intuition. Our proposed research will fill in the gaps in public health knowledge. We propose to conduct a comprehensive study of the effect of Medicaid fees on outpatient services and inpatient services, as measured by ambulatory-care sensitive (ACS) conditions. ACS conditions are a particularly relevant outcome because they are measures of health that are tightly linked to receipt of primary care. Examining the association between Medicaid physician fees and ACS admissions is also important for policy because inpatient services represent a potentially important "offset" to higher fees. Indeed, if higher Medicaid physician fees do reduce ACS admissions, then savings from such a reduction has the chance to pay for the fee increase. The comprehensive nature of our proposed research, which will include examining both outpatient and inpatient services, will allow us to provide a more complete accounting than is currently available of the mechanisms that do or do not link Medicaid physician fees to health. We will identify the effect of fees on the use of outpatient services and the effect of fees on ACS inpatient admissions. Combining these analyses will allow us to infer the link between greater primary care due to higher fees and ACS conditions. Specifically, we will use data on a sample of non-aged (i.e., non-dual eligible) Medicaid recipients to do the following:1. Obtain estimates of associations between Medicaid fees for primary care and the use of physician services, laboratory and imaging services, and other outpatient services of Medicaid recipients. 2. Obtain estimates of associations between Medicaid fees for primary care and the probability of admission to the hospital for conditions thought to be amenable to primary care that are often referred to as avoidable or ambulatory- care sensitive (ACS) hospitalizations. This will be the first study to examine this question.
The application addresses fundamental and unresolved questions about how the level of physician reimbursement in Medicaid affects Medicaid beneficiaries'health care utilization and health. Findings from the proposed research will be of great relevance to current public health policy, particularly debate over funding of the increase i Medicaid reimbursement for primary acre embedded in recent health care reform legislation.