Physician Participation in Medicaid Revisited

Medicaid cut-backs during the Reagan Administration may have combined with other factors to affect physicians' willingness to participate in Medicaid. The author analyzed participation rates for two comparable groups of physicians: one group surveyed in 1977-78 and the other surveyed in 1984-85. Over this time period, there was a small, but statistically significant, decline in Medicaid participation rates (from 12.1-9.5%). Regression analysis showed, however, that physicians remain sensitive to important policy variables, such as fee levels and eligibility criteria. Physicians treat significantly more Medicaid patients when Medicaid fees are relatively high and when there is a relatively large number of people eligible for Medicaid in their area. These findings reinforce recent Congressional mandates to expand Medicaid eligibility and to raise payment levels for obstetric and pediatric services. Increased participation on the part of urban physicians, however, may be limited by the residential segregation of many Medicaid eligible people in the inner city.