Some practices dropping Medicare

In economics, there is supply and there is demand. When growth in demand outstrips growth in supply, prices increase. When a price ceiling is put in place to restrain prices, the market usually encounters a situation where not everyone who can afford to buy can actually do so. Kaiser Health News reported on the general shortage of primary care doctors in the US, with an emphasis on Medicare patients' inability to find doctors. Medicare, while heralded as a success for elderly patients, typically pays less than commercial payers. Up until somewhat recently, many practices had to accept Medicare simply because of the number of Medicare patients. With supply not being able to keep up with demand, some practices have made business decisions to not accept Medicare patients.

Some people have tried to portray greedy doctors as being the reason for the difficultly that Medicare patients have when searching for a new doctor. In reality, if commercial insurers pay significantly more than Medicare does, it can often be a very difficult business decision to continue to accept Medicare, especially when the average salary of primary care doctors is only about 80% of the average salary across all specialties (per the article). A more systematic fix would be to allow prices to adjust annually, allowing the under-compensated specialties to be paid more and hopefully drawing more doctors into the field (thus increasing supply).