NCPA - National Center for Policy Analysis

Less Charity Care With Managed Care

April 7, 1999

The more managed care there is in an area, the less free care doctors provide to the uninsured, says a study published in the Journal of the American Medical Association. The study's authors suggest the spread of managed care and greater financial pressure to contain medical costs may limit physicians' "ability to cross- subsidize care for the medically indigent by shifting the costs onto third-party payers."

During 1996-1997, researchers from the Center for Studying Health System Change and the Kansas Health Institute surveyed 10,881 physicians about the levels of charity care they provide.

  • The study found that 77.3 percent of the physicians surveyed provided charity care in the prior month, averaging just over 10 hours per week.
  • Of the physicians who provided charity care, those "who derive 85 percent or more of total practice revenue from managed care provide about half as much charity care as physicians who derive no revenue from managed care."
  • They provide "about 40 percent less charity care than physicians who derive 1 percent to 20 percent of practice revenue from managed care."
  • Furthermore physicians in "areas with high managed care penetration provide about 25 percent fewer hours of charity care than physicians who practice in areas with low managed care penetration."

The study also found that physicians in solo or small group practices were also more likely to provide charity care.

Source: P. J. Cunningham, et al., "Managed Care and Physicians' Provision of Charity Care," Journal of the American Medical Association, March 24-31, 1999.


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