NCPA - National Center for Policy Analysis

Medicare Fees for Physicians Affect Access and Quality

October 22, 2002

Proposals in Congress would reduce proposed cuts in the fees Medicare pays doctors amid concerns that previous cuts in physicians' fees have reduced access to doctors and reduced quality of care for the nation's elderly.

The fees Medicare pays physicians are not determined in the marketplace. Instead they are set by the Centers for Medicare and Medicaid Services (CMS), based on a complex formula. When fees are cut, doctors respond by spending less time with patients, refusing to accept new patients, cutting back on the purchase of new equipment and reducing amenities.

The American Medical Association (AMA) found that many physicians who treat a significant number of Medicare patients are already limiting seniors' access to their services and that the situation will only get worse if the cuts continue. For example:

  • Almost 30 percent of physicians limit the number of new Medicare patients they will accept -- or do not accept Medicare patients at all.
  • In addition, 47 percent of physicians who treat Medicare patients are spending less time with them during office visits and are squeezing more appointments into each working day.
  • More than 38 percent of doctors and close to half of all surgeons have delayed purchasing new equipment, mostly due to Medicare fees.

By 2005, Medicare patients may have access to little more than half of all physicians. Even those who treat Medicare patients may not accept new patients. Reduced access means longer waits. According to a survey of seniors by the Center for Studying Health System Change (HSC):

  • More than one-third of seniors in 2001 reported having to wait more than three weeks for an appointment for a checkup -- up 15 percent from 1997. [See Figure I.]
  • Over 40 percent of seniors waited more than a week for an appointment to treat a specific illness -- up 16 percent from 1997.

Source: Devon Herrick (NCPA research manager), "Is Medicare Too Stingy?" Brief Analysis No. 421, October 22, 2002, National Center for Policy Analysis.

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