Impact of the Medicare Fee Freeze on Physician Expenditures and Volumes

摘要

The purpose of the study was to analyze the impact of the fee freeze (which started in July 1984 and extended through May 1986 for participating physicians and December 1986 for nonparticipating physicians) on Medicare physician expenditures. The study used 100% Medicare physician claims data for 1983-1986 from Alabama, Connecticut, Washington, and Wisconsin. The investigators analyzed descriptive data to determine what procedures were rising faster than others, and to identify sources of expenditure increases, such as growth in volume of services, increased use of more complex billing codes, and new technology. The investigators also performed econometric analyses to explore causal relationships between the fee freeze and expenditure growth. Findings indicated that physician expenditures per beneficiary increased over 35% from 1983 to 1986 in the 4 states. Econometric analyses suggested that the fee freeze contributed to volume increases but that overall, it reduced expenditures slightly. Other factors identified as affecting volume were increases in real incomes, physicians per capita, and declining hospital utilization.