Cover: The Impact of Health Reform on Purchased Care Access

The Impact of Health Reform on Purchased Care Access

National Health Reform and Modernization of the Military Health System Study

Published Sep 27, 2017

by Andrew W. Mulcahy, Italo A. Gutierrez, Tadeja Gracner, Teague Ruder, George E. Hart, Melony E. Sorbero

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Research Questions

  1. How might Affordable Care Act coverage expansion affect TRICARE enrollees' access to care in the purchased care sector?
  2. Would the effect of expansion differ by locality across the United States?

This report assesses the impact of a key aspect of reform in the broader U.S. health care system: the Affordable Care Act's coverage expansion. The authors estimated how an influx of newly insured patients through the coverage expansion may change the way that civilian providers choose to interact with the TRICARE program. RAND's approach for this analysis combined data from the Defense Health Agency, publicly available data sources, and projections of health insurance coverage in 2016 from the RAND COMPARE microsimulation model to predict how physicians' decisions to treat TRICARE enrollees will change over time. The report culminates in lists and maps of counties where civilian physicians are most likely to face financial incentives to substitute newly insured patients for current TRICARE patients. The authors found that about 7 percent of current TRICARE visits are delivered by a community provider who could face financial incentives after the Affordable Care Act's coverage expansion to replace their current TRICARE patients with the newly insured. This work is one indicator of potential future TRICARE access concerns rather than an exact prediction of providers' decisions.

Key Findings

Results of Analysis

  • The authors found that changes in visit volume caused by the Affordable Care Act coverage expansion were larger for Medicaid enrollees, individuals covered by private insurance, and individuals without insurance. However, they estimated that 19 percent of TRICARE physicians would find that they could replace all of their current TRICARE net revenue with net revenue from the newly insured post-coverage expansion and were therefore "at risk." These physicians accounted for about 7 percent of TRICARE visits. Primary care physicians were more likely to be at risk than specialist physicians.
  • Under a scenario in which Congress increases Medicaid payment rates for certain primary care providers and services to Medicare levels (as was done in 2013 and 2014), the proportion of TRICARE visits to primary care providers able to replace all of their current TRICARE net revenue with net revenue from the newly insured increases from 7 percent under the base assumptions to 17 percent.

Policy Option to Mitigate Loss of Access

  • One short-term option to mitigate potential TRICARE purchased care access issues is to increase TRICARE rates.

This research was sponsored by the Office of the Secretary of Defense and conducted within the Forces and Resources Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

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