Health Care Management Papers

Document Type

Journal Article

Date of this Version

2006

Publication Source

Health Care Financ Review

Volume

28

Issue

2

Start Page

97

Last Page

111

Abstract

Recent policy discussions by the Medicare Payment Advisory Commission (MedPAC) regarding physician prices in the traditional fee-for-service (FFS) Medicare Program reflect movement toward a market pricing model. Earlier objectives such as sustainable levels of spending have given way to concerns over the relationship between fees and actual costs, access to care, and the importance of demand and supply in local markets. An important objective in other policy settings is economically efficient distribution of services. We explain the meaning of economic efficiency for Medicare physician prices and explore difficulties one might encounter in pursuing economic efficiency, as well as the cost of not pursuing it.

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Date Posted: 27 November 2017