Primary care physician supply, physician compensation, and Medicare fees: what is the connection?

Abstract

Primary care, a cornerstone of several health reform efforts, is believed by many to be in a crisis because of inadequate supply to meet future demand. This belief has focused attention on the adequacy of primary care physician supply and ways to boost access to primary care. One suggested approach is to raise Medicare fees for primary care services. Whether higher Medicare fees would increase physician interest in primary care specialties by reducing compensation disparities between primary care and other specialties has not been established. Further, many questions remain about the assumptions underlying these policy concerns. Is there really a primary care physician crisis? Why does compensation across physician specialties vary so widely? Can Medicare physician fee changes affect access to primary care? These questions defy simple answers. This issue brief lays out the latest information on physician workforce, compensation differences across physician specialties, and Medicare's physician fee-setting process.