| Physician's private price |
Higher private prices lead to fewer physicians participating in the Medicaid program and a smaller supply of services to the program by participating physicians. Consequently, increases in private physician fees lead to lower Medicaid costs for physician services. |
| Medicaid price |
Higher Medicaid fees lead to higher rates of participation and higher levels of supply to the Medicaid program. Quantitatively, the magnitude of the effects differ between specialities. The effect of Medicaid prices on participation rates is smaller for primary care than for surgery. The effect on the supply of services by participants is fairly large, with somewhat higher elasticities for surgeons than for primary care physicians. |
| Medicaid eligibles |
More Medicaid eligibles in the physician's catchment area increases the physician's supply of services to Medicaid. Conversely, decreases in eligibility lead to program cost decreases. |
| Physician supply |
More physicians per private patient lead to a greater supply of services to the Medicaid program. Projected growth in the physician supply—although it can be expected to lead to lower program costs for a given level of services—will increase total program costs through its effect on the total amount of services supplied to Medicaid patients. |
