One concern consistently raised by Obamacare skeptics is the effect that the law’s optional Medicaid expansion will have on the limited supply of physicians in the United States. Some argue that a rush of newly insured low-income Americans into the health care system will overwhelm physicians, forcing them to work unsustainable hours. But a new study conducted by researchers at the Government Accountability Office (GAO) and the Center for Studying Health System Change suggests otherwise. Researchers point out that the creation of the Children’s Health Insurance Program (CHIP) in 1997 — which was a similar expansion of a health entitlement program — didn’t lead to such negative consequences, and even had the exact opposite effect in certain cases.

The “demand-driven” model of health care consumption theory assumes that greater access to care will lead to greater consumption of health care services, forcing doctors to work longer hours to meet the increased demand. But, according to report authors Fang He and Chapin White, that’s not what happened with CHIP. The new study concluded that CHIP’s implementation actually led to pediatricians working significantly less hours in states that had the most robust CHIP programs, with a 5 percent increase in the enrolled pool correlating with a 14 percent reduction in hours worked:

“These findings are clearly inconsistent with the hypothesis that physicians will work longer hours to accommodate an influx of demand following a coverage expansion,” He and White wrote. “What is less clear is whether the association we find is causal and, if so, why pediatricians would actually work fewer hours in response to a coverage expansion.”

They speculate that there could be two reasons: CHIP reduced average reimburse rates for pediatricians that led them to reduce their hours; or, the shorter hours are a reaction to the managed-care nature of CHIP and its gatekeeper mechanisms.

Assumptions that healthcare is a demand-driven model in which physicians provide the volume of service patients demand “rest on very shaky ground,” the report stated. In contrast, a supply-driven model includes physicians treating patients with a variety of insurance arrangements and tailoring their practices to the financial incentives those arrangements create. The researchers cite a 2009 finding that reimbursement for an office visit for a child on private insurance was $81 compared to $47 for a child enrolled in Medicaid or CHIP. [...]

The data is not conclusive, and the methodology is imperfect. But the study does demonstrate a point that often gets overlooked in health care policy debates: Massive systemic changes do not occur in a vacuum, and the assumption that current health care trends will proceed in perpetuity despite ongoing policy changes is a flawed one.

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A new study from the Government Accountability Office (GAO) finds that since 2008, state efforts to reform Medicaid and make the low-income safety net program more efficient — likely spurred by provisions in the Children’s Health Insurance Program Reauthorization Act (CHIPRA) and Obamacare — have resulted in lower application processing times and high beneficiary coverage satisfaction comparable to private health insurance.

The study also found that the main hurdle to ensuring beneficiary satisfaction was the shortage of caregivers who accept Medicaid patients, mainly due to low payment rates for the doctors who take on Medicaid patients. As the GAO summarizes:

States reported making numerous changes to provider payments, provider taxes, and beneficiary services since 2008. While more states reported provider-rate and supplemental payment increases each year from 2008 through 2011, the number reporting payment reductions and increased provider taxes also grew. More states reported increasing services than limiting them.

Over two-thirds of states reported challenges to ensuring enough Medicaid providers to serve beneficiaries — including dental and specialty care providers. States cited Medicaid payment rates and a general shortage of providers as adding to the challenge. To attract new providers, over half the states reported simplifying administrative requirements or increasing payment rates.

In calendar years 2008 and 2009, less than 4 percent of beneficiaries who had Medicaid coverage for a full year reported difficulty obtaining medical care, which was similar to individuals with full-year private insurance; however, more Medicaid beneficiaries reported difficulty obtaining dental care than those with private insurance.

CHIPRA and Obamacare both expand the Medicaid program by vastly increasing the program’s funding, encouraging more aggressive enrollment efforts in the states, and rewarding states that successfully expand their coverage pool by insuring the poorest Americans.

The fact that Medicaid beneficiaries are self-reporting satisfaction with their coverage at the same rates as private insurance subscribers suggests that the program is working well — at least in states where it is well-funded. Safety net programs tend to enjoy high levels of satisfaction in general, with Medicare beating out private insurance with a 92 percent approval rating. Medicaid could be on the road to that same level of success if it’s adequately funded. But that would likely happen only if Republican governors decide to accept the federal government’s extremely generous funding to implement Obamacare’s Medicaid expansion.

Republicans routinely claim that shrinking the government’s involvement in health care would eliminate waste, inefficiency and significantly lower health care costs. But during the debate over the Affordable Care Act, these same politicians lambasted Democrats for cutting $500 billion from Medicare and Medicaid, and specifically argued that the government’s overpayments to private health insurance plans participating in Medicare Advantage (MA) were essential for preserving seniors’ access to services — particularly in rural areas. “The fact of the matter is, the bottom line, is that these are 10 million people that are going to lose benefits. And that’s what it boils down to,” Sen. Orrin Hatch (R-UT) warned during the mark-up process in the Senate Finance Committee.

Since President Obama signed reform into law, however, the GOP’s doomsday predictions have gone unrealized, and today a new report from the Government Accountability Office (GAO) shows that some private plans are still abusing the system and reporting higher patient severity than is actually supported by medical records. As a result, the government is paying private insurers substantially more than it spends on traditional fee-for-service Medicare:

GAO found that diagnostic coding differences exist between MA plans and Medicare FFS. Using data on beneficiary characteristics and regression analysis, GAO estimated that before CMS’s adjustment, 2010 MA beneficiary risk scores were at least 4.8 percent, and perhaps as much as 7.1 percent, higher than they likely would have been if the same beneficiaries had been continuously enrolled in FFS. The higher risk scores were equivalent to $3.9 billion to $5.8 billion in payments to MA plans. Both GAO and CMS found that the impact of coding differences increased over time. This trend suggests that the cumulative impact of coding differences in 2011 and 2012 could be larger than in 2010.

In contrast to GAO, CMS estimated that 3.4 percent of 2010 MA beneficiary risk scores were attributable to coding differences between MA plans and Medicare FFS. CMS’s adjustment for this difference avoided $2.7 billion in excess payments to MA plans. CMS’s 2010 estimate differs from GAO’s in that CMS’s methodology did not include more current data, did not incorporate the trend of the impact of coding differences over time, and did not account for beneficiary characteristics other than age and mortality, such as sex, health status, Medicaid enrollment status, beneficiary residential location, and whether the original reason for Medicare entitlement was disability. [...]

GAO’s findings underscore the importance of both CMS continuing to adjust risk scores to account for coding differences and ensuring that those adjustments are as complete and accurate as possible.

In other words, Republicans were wrong in trying to preserve the government’s subsidies for private insurers during the health care battle and they’d be foolish to stand in the way of more reforms now. Medicare Advantage can only be a viable option for seniors if it can help control health care spending. Eliminating waste, fraud and abuse from the program is crucial to improving Medicare’s sustainability and bending the cost curve.

Sam Stein notes that a new Government Accountability Office (GAO) report has found that the Affordable Care Act — the very same law that supposed deficit hawks want to repeal — will lead to a “notable improvement in the long-term outlook under the Baseline Extended simulation” once fully implemented:

Both of these simulations incorporate effects of health care legislation enacted in March 2010, which includes a number of provisions to control the growth of federal health care spending. There is a notable improvement in the long-term outlook under the Baseline Extended simulation [that follows the CBO August 2010 baseline estimates for the first 10 years and then simply holds revenue and spending constant as a share of GDP] which assumes full implementation and effectiveness of cost control provisions, although some—including the Trustees, CBO and the CMS Actuary—have raised questions about the sustainability of certain of these cost controls.

These reports point to the biggest problem for repeal advocates: how to make up for the budget hole repeal will leave behind. So far, the GOP has handled the problem by simply dismissing the cost estimates. “Well, the assumptions are all wrong,” Minority Leader Mitch McConnell (R-KY) told CNN’s John King when pressed on the matter. “Nobody seriously believes the health care bill is actually going to save money. Nobody believes that,” McConnell insisted.

But the GAO, the CBO, and the CMS do and McConnell and the GOP will have to live by their rules if they hope to accomplish anything serious. Their dismissiveness, of course, suggests that they don’t and won’t.

Significantly, the report also notes that while reform helps control spending, it doesn’t do enough. “[E]ven under the more optimistic Baseline Extended scenario, which assumes the full implementation and effectiveness of cost control provisions, debt grows continuously over the long term indicating that more needs to be done,” it notes.