Should We Care If Doctors Drop Medicare?

A small but increasing number of doctors have stopped taking Medicare patients, according to new data from the Centers for Medicare and Medicaid Services. Reasons cited include low reimbursement rates, high paperwork burden, and pressure to adopt electronic medical records. And a few doctors are scrapping private insurance, too, for some of the same reasons.

It doesn’t bother me to see this happening. In fact it might be healthy if the trend were to accelerate, because it would provoke some interesting policy conversations. For example:

Does it really make sense to use an insurance mechanism for routine, relatively low cost expenditures such as primary care? We don’t have insurance for gasoline and oil changes for our cars. If we did away with third-party reimbursement for much of primary care it could drive down the cost of doing business and enable lower pricing. We already see this with certain “direct care” models. (One reason so much comes under the insurance mechanism is that it’s tax advantaged under current law. We should have a serious discussion about repealing the tax deductibility of health insurance to reduce the distortions and inefficiencies that it causes.)
Should different payers be allowed to pay doctors different prices for the same service, or should it be the same price for all comers? Why should Medicare pay less or more than Blue Cross or an uninsured patient for a visit or a procedure? There’s a lot of time and energy spent on negotiating and administering the rates and it’s not clear that much value is achieved.
Why is it that primary care struggles so mightily while specialists, especially those performing procedures, enjoy much cushier rates? Some light has been shed on this topic recently – but a whole lot more is needed.