Medicaid physician fees and use of physician and hospital services.

This paper examines how physician fees affect use of physician and hospital services under the Medicaid program. Using data from the 1987 National Medical Expenditure Survey (NMES), it examines how Medicaid physician fee levels affect beneficiaries' probability of using ambulatory physician services, the site at which ambulatory physician care is usually received, and how that site affects level of use and probability of hospital admission. The results indicate that low Medicaid fees hamper access to office-based physicians and encourage use of hospital outpatient departments and emergency rooms. They also indicate that having an office-based doctor as a usual source of ambulatory physician care is associated with a higher frequency of visits and a lower probability of having an inpatient hospitalization.