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Physicians Pulling Back from Charity Care
Issue Brief No. 42
August 2001
Marie C. Reed, Peter J. Cunningham, Jeffrey Stoddard
hysicians have long provided care to the medically indigent
for free or at reduced rates. However, recent findings from the Center for Studying
Health System Change (HSC) indicate that the proportion of physicians providing
charity care dropped from 76 percent to 72 percent between 1997 and 1999. In the
short term, most medically indigent people are still getting care. But policy
makers should take note that reduced physician participation in charity care will
hurt the poor if—as projected—growth in physician supply slows and the number
of uninsured rises along with escalating health care costs. This Issue Brief discusses
the extent of the decline in physician provision of charity care, the reasons
for the decline and implications for the future of the safety net.
Decline Is Widespread
hysicians—along with hospitals, community health centers and
free clinics—are part of the country’s safety net, and their continued commitment
to providing charity care is important to the medically indigent and policy makers.
Between 1996-97 and 1998-99, the proportion of patient care physicians providing
charity care declined from 76 percent to 72 percent, according to HSC’s Community
Tracking Study Physician Survey (see Table 1). Although
the overall number of practicing patient care physicians increased, the number
of physicians providing charity care did not change. The average amount of charity
care supplied by physicians who did provide charity care remained constant at
11 hours per month.
Although some types of physicians—for example, those working in staff or group-model
health maintenance organizations (HMOs) and those who do not own their own practices—are
less likely to provide charity care than others, the decline in charity participation
occurred in virtually all segments of the physician pool (see
Table 2), including:
- physicians who own their practices;
- employed physicians;
- primary care physicians and specialists;
- physicians in most sizes and kinds of practice settings; and
- physicians in practices receiving less than 60 percent of revenue from managed care, a group that includes nearly 75 percent of all patient care physicians.
The Changing Medical Marketplace
he decline in physicians providing charity care may be related
in part to changes in the medical marketplace, including an increase in managed
care and the trend away from physician ownership of practices during the 1990s.
For example, charity care is more common in solo or small group practices, among
physicians who own their practice and in practices with less managed care (as
measured by percent of practice revenue). Yet the percentage of physicians practicing
in these types of arrangements declined between 1996-97 and 1998-99 (see
Table 3).
A simulation of the expected proportion of physicians providing charity care indicates
that recent changes in selected physician and practice characteristics account
for approximately 25 percent of the decline in charity care participation.1
Three underlying changes in the medical
marketplace may explain why fewer physicians
are providing charity care. The first is
that physicians are increasingly becoming
employees rather than owners of their practices-
a trend that may change in the wake
of hospitals’ divestiture of practices and the
demise of physician practice management
companies in recent years. And employed
physicians are less likely than owners to
provide charity care.
Moreover, from 1996-97 to 1998-99,
the drop in charity care participation for
employed physicians (from 65 percent to 61
percent) was twice as large as that for physicians
who owned their practices (from 83
percent to 81 percent). Employed physicians
generally have less control over their time
than do owners. Because they also are more
likely to work in environments where patients
are insured and in health plans with lower
copayments, employed physicians may less
frequently encounter patients who cannot
pay for care.
A second factor that may be undermining
the provision of charity care is the financial
strain faced by many physician practices. Over
the past decade, health plan and employer
efforts to rein in health care costs resulted in
lower payment rates to physicians and, for
some, losses from managed care risk-sharing
contracts. These conditions may have constrained
practices’ willingness to provide
charity care.
The third factor that may be causing physicians to reduce participation in charity
care is a lack of time. Many physicians report increased time pressures from administrative
burdens caused by utilization controls and multiple payers.2
Such time pressures may cause some physicians to stop providing charity care to
have enough time for paying patients or for themselves and their families.
Impact on the Uninsured
ecause the reduction in the percentage of physicians providing
charity care during the 1996-97 to 1998-99 period was offset by an increase in
the overall number of physicians in practice, the effects on access to care for
medically indigent patients, including the uninsured, were probably negligible.
The number of uninsured persons did not change between 1996-97 and 1998-99.3
The average number of physician visits reported by the uninsured held steady at
two per year—about half as many as those with medical insurance—according to
findings from the HSC Household Survey.
Even so, policy makers should be concerned about the decrease in the proportion
of physicians providing charity care during a time when the overall supply of
physicians continued to grow. Physicians in private practice supply a large proportion
of health care services to the medically indigent. Nearly two-thirds of the uninsured
report that a physician is their usual source of care, and approximately half
receive care in a physician’s office. Recent estimates of physician supply indicate
that the number of active physicians is growing at only about 1 percent per year—a much lower rate of growth than the 3 percent experienced in the 1990s.4
As a result, increases in the number of active physicians may be insufficient
to offset additional decreases in physician participation in charity care.
The safety net—which includes a variety
of institutional providers as well as physicians
in private practice-remains fragile. Although
it has been improving in some communities
over the past few years, there are some recent
signs of strain. Widespread accounts of pressures
on hospital emergency departments
and academic medical centers, for example,
indicate that some key parts of the safety net
may be unable to serve the medically indigent
to the extent that they have in the past.
In addition, recent job layoffs and uncertainty
about continued economic growth,
coupled with reports of large increases in
insurance premiums, deductibles and copayments,
point to a likely increase in the number
of people needing charity care in the next
year or two. Unfortunately, this increased
need for charity care would occur at a time
of reduced safety net capacity, making it
more difficult for underinsured and uninsured
people to obtain health care.
| Table 1 Provision of Charity Care by Patient Care Physicians: Change from 1996-97 to 1998-99 | ||||
|
CHARITY CARE PROVIDED BY PATIENT CARE PHYSICIANS
|
NUMBER OF PATIENT CARE PHYSICIANS
|
|||
|
YEAR
|
PERCENT PROVIDING CHARITY CARE
|
AVERAGE NUMBER OF HOURS PER MONTHa
|
TOTAL
|
PROVIDING ANY CHARITY CARE
|
|
1996-97
|
76%
|
11.1
|
347,000
|
265,000
|
|
1998-99
|
72
|
10.6
|
363,000
|
261,000
|
|
CHANGE
|
-4**
|
-0.5*
|
+16,000**
|
-4,000*
|
|
Note: Physician survey population includes all non-federal
patient care physicians, except radiologists, anesthesiologists, pathologists
and those in selected specialties such as aerospace medicine. Residents
and fellows are excluded.
a Average number of hours per month provided by physicians providing at least some charity care. *Values for 1996-97 and 1998-99 not significantly different at p > .05. **Statistically significant change at p < .001. Sources: American Medical Association and American Osteopathic Association Master Files and HSC Community Tracking Study Physician Survey, 1996-97 and 1998-99. |
||||
| Table 2 Physicians’ Participation in Charity Care, by Practice and Physician Characteristics, 1996-97 and 1998-99 |
||
|
PERCENT OF PHYSICIANS PROVIDING CHARITY CARE
|
||
| SELECTED CHARACTERISTICS |
1996-97
|
1998-99
|
| PRACTICE SETTING |
|
|
| SOLO/2 PHYSICIANS |
83%
|
81%*
|
| SMALL GROUP (3-10 PHYSICIANS) |
82
|
79*
|
| MEDIUM GROUP (11-50 PHYSICIANS) |
77
|
75
|
| LARGE GROUP (50+ PHYSICIANS) |
73
|
74
|
| STAFF/GROUP HMO |
45
|
46
|
| HOSPITAL-OWNED |
68
|
61***
|
| MEDICAL SCHOOL |
74
|
66***
|
| OTHER |
63
|
58*
|
| OWNERSHIP OF PRACTICE |
|
|
| OWNER |
83
|
81**
|
| NOT AN OWNER |
65
|
61**
|
| PERCENT OF PRACTICE REVENUE FROM MANAGED CARE |
|
|
| NONE |
67
|
61*
|
| 1-20 |
81
|
75***
|
| 21-40 |
80
|
77***
|
| 41-60 |
79
|
73***
|
| 61-84 |
74
|
72
|
| 85+ |
54
|
56
|
| PRIMARY CARE PHYSICIAN |
|
|
| YES |
73
|
69**
|
| NO |
79
|
75**
|
| Note: Statistically significant decline
in charity care participation from 1996-97 to 1998-99 at: * p<.05; ** p<.01;
*** p<.001. Source: HSC Community Tracking Study Physician Survey, 1996-97 and 1998-99 |
||
| Table 3 Distribution of Physicians by Selected Characteristics, 1996-97 and 1998-99 |
||
|
PERCENT OF PHYSICIANS
|
||
| SELECTED CHARACTERISTICS |
1996-97
|
1998-99
|
| PRACTICE SETTING |
|
|
| SOLO/2 PHYSICIANS |
41%
|
38%***
|
| SMALL GROUP (3-10 PHYSICIANS) |
18
|
16***
|
| MEDIUM GROUP (11-50 PHYSICIANS) |
6
|
7*
|
| LARGE GROUP (50+ PHYSICIANS) |
2.9
|
3.5*
|
| STAFF/GROUP HMO |
5
|
5
|
| HOSPITAL-OWNED |
9
|
11***
|
| MEDICAL SCHOOL |
7
|
8
|
| OTHER |
10
|
12***
|
| OWNERSHIP OF PRACTICE |
|
|
| OWNER |
62
|
57***
|
| NOT AN OWNER |
38
|
43***
|
| PERCENT OF PRACTICE REVENUE FROM MANAGED CARE |
|
|
| NONE |
6
|
5
|
| 1-20 |
26
|
22***
|
| 21-40 |
28
|
28
|
| 41-60 |
19
|
21**
|
| 61-84 |
14
|
15*
|
| 85+ |
8
|
9***
|
| Note: Statistically significant change from
1996-97 to 1998-99 at: * p<.05; ** p<.01; *** p<.001. Source: HSC Community Tracking Study Physician Survey, 1996-97 and 1998-99 |
||
Notes
| 1. | The regression-based simulation model estimated the proportion of physicians in 1998-99 who would have provided charity care, assuming that physician and practice characteristics had not changed from 1996-97. The factors in the model included practice type, ownership of practice, practice revenue from managed care and physician specialty. |
| 2. | Mechanic, David, et al., “Are Patients’ Office Visits with Physicians Getting Shorter?” New England Journal of Medicine, Vol. 34, No. 3 (January 18, 2001). |
| 3. | HSC Community Tracking Study Household Survey, 1996-97 and 1998-99. |
| 4. | Kletke, Philip, “The Projected Supply of Physicians, 1998 to 2020,” Physician Characteristics and Distribution in the U.S., 2000 Edition, American Medical Association, Chicago (2000). |
ISSUE BRIEFS are published by the Center for Studying Health System Change. President: Paul B. Ginsburg
Director of Public Affairs: Ann C. Greiner
Editor: The Stein Group
