More Coverage = More Physician Visits = Less Cost?

By May 21, 2009Commentary

A recent story in the Boston Globe raises intriguing questions about the effect of health coverage expansions on physician visits and other services and consequently, costs.  (Globe Article) The story reports survey results indicating that wait times to see many specialists in the Boston area have grown over the last five years and now average over 50 days.  The wait times presumably reflect increased demand.

Boston has a relatively high number of specialists for its population, so one question is whether the increased demand reflects a phenomenon that has been noted elsewhere:  that supply may actually be a determining influence on how many services are performed.  The article reports that there is a perception that the health reform law which expanded coverage in Massachusetts is responsible for the increased demand.  If so, it could be that the new demand is reflective of truly needed services which patients did not seek because they did not have insurance which would pay for the services.  It might also be that some of the increased demand results from patients with insurance feeling freer to seek services which they may or may not really need.  In any event, whether causative or not, there would appear to at least be a correlation between insurance coverage and more demand for physician services.   That is  consistent with research finding that in general, people with insurance have higher health care spending.

All these new physician visits likely mean that existing physicians are working to capacity and that there is more demand for additional physicians to set up practice in the area.  All these visits have to be paid for somehow.  There are people who continue to claim that expanding coverage will result in lower costs, usually because they belief patients will receive more preventive care that reduces hospitalizations and other expensive services and keeps patients in better overall health.  There is very little trustworthy evidence to support that claim, but there is lots of evidence that expanding coverage always results in higher overall health care costs, usually much higher than proponents of the coverage expansion project.  The increase in demand for specialists in Boston would seem to reflect this general principle.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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