Charity Begins in ... the Medical Office?

One of our writers here at pfnlive.com, who used to work in managed care communications, told of a time his company hosted a seminar on how physicians can better provide "charity care." After the session, a doctor asked "now can you tell us how we get paid for our work." No joke.

“A serious obstacle to the improvement of the human race is indiscriminate charity.”

—Andrew Carnegie

One of our writers here at pfnlive.com, who used to work in managed care communications, told of a time his company hosted a seminar on how physicians can better provide “charity care.” After the session, a doctor asked “now, can you tell us how we get paid for our work.” No joke.

A new study by the Center for Studying Health System Change (HSC) published in the March 2008 Milbank Quarterly, finds that changes in physicians’ income, practice ownership, and practice size play a large role in the decisions to start or stop treating charity care and Medicaid patients.

The study, Effects of Changes in Incomes and Practice Circumstances on Physicians’ Decisions to Treat Charity and Medicaid Patients, by HSC Senior Fellow Peter Cunningham, PhD, and Jack Hadley, PhD., of George Mason University, used data from four rounds of the nationally representative Community Tracking Study Physician Survey, 1996-97 through 2004-05. Earlier research by Dr. Cunningham showed that the proportion of US physicians providing charity care declined from 76% in 1996-97 to 68% in 2004-05.

The researchers examined the likelihood of doctors:

1) Dropping charity care,

2) Starting to provide charity care,

3) No longer accepting new Medicaid patients, and

4) Starting to accept new Medicaid patients.

Falling income increased the likelihood that physicians would stop accepting new Medicaid patients but had no effect on their decision to provide charity care, according to the study. Physicians who switched from being owners to employees or from small to larger practices were more likely to drop charity care and to start accepting Medicaid patients. Physicians who made the opposite practice changes did the reverse.

To reverse these trends, the authors offered up a couple of no-brainers—raise Medicaid reimbursement rates and support groups that encourage doctors to provide charity care. Doctors, don’t hold you breathe.

1.9%Median annual compensation increase for a US physician.

4%Current rate of inflation in the United States.(MGMA.com and InflationData.com)