Physician Responses to Medicare Payment Reductions: Impacts on the Public and Private Sectors, 1988-1991

The purpose of this study was to investigate the effects on physician behavior of decreases in Medicare payment rates for surgical procedures. The study examined the volume of services provided, billed charges, and the selection of diagnostic or therapeutic alternative procedures, or clinically unrelated procedures, for Medicare and privately-insured patients. Also studied were the proportion of physician income derived from Medicare and the profitability of procedures as they related to the volume of services provided. This data collection comprises observations for 21 surgical procedure groups in the specialty areas of general surgery, gastroenterology, orthopedic surgery, ophthalmology, urology, gynecological surgery, thoracic surgery, and cardiology, from up to 187 hospitals and for up to 15 quarters. Efforts were made to include high volume and expensive procedures. Excluded were radiology, pathology, or other lab procedures, and procedures that had experienced erratic changes in volume due to changes in technology or changes in national standards. Also included in this collection are hospital characteristics and county-level data pertaining to number of hospital beds, per capita income, licensed practical nurse and registered nurse wages, doctors per 1000 population, and health maintenance organization enrollees per 1000 population.