The changes in hospital payments based on the committee’s recommendations would not result in significant redistribution except for those providers that have benefited from special exceptions. The change in practitioner payments, however, would tend to redistribute payments to metropolitan areas from nonmetropolitan areas, including some that historically have been underserved.

The literature reviews and analyses reported in Chapter 3 concluded that there are wide discrepancies in access to and quality of care across geographic areas, but they do not appear to be strongly related to differences in, or potential changes to, fee-for-service payment adjustments. This finding was supported both by literature review and by original analysis of Medicare beneficiary survey data from the Consumer Assessments of Healthcare Providers and Systems (CAHPS) survey. Thus, geographic payment adjustments are an appropriate tool for addressing geographic differences in costs of doing business, such as inter-area variations in labor market wages, but they are a blunt instrument for addressing variation in health care quality and access. Reasons for such discrepancies are varied and sensitive to area type, such as inner-city neighborhoods or remote rural areas. Accordingly, typical geographic designations, such as metropolitan statistical areas and nonmetropolitan “rest-of-state” areas, are not well suited to applying adjustments to encourage practice in underserved areas.

The committee advocates more targeted policies and programs both within and outside the Medicare program focusing on the size, composition, and distribution of the health care workforce. In particular, the committee determined that the geographic availability of a workforce constituted to provide its population with robust primary care services is a key factor in achieving geographic access and quality objectives. This finding is especially significant with respect to racial and ethnic minority populations.

In Chapter 4, the committee reviewed numerous programs, many of them organized within the Public Health Service, designed to encourage practitioners to locate in underserved areas. Federal as well as state programs have been funded at modest levels and rarely subject to systematic rigorous evaluation. The committee concluded that there is some evidence of effectiveness of many programs but that the evidence falls short of providing a reliable guide for policy makers. The chapter also discussed the changing roles of different health professionals as Medicare’s payment incentives increasingly move toward care coordination and different care delivery models, such as accountable care organizations.

Throughout its deliberations, the committee discussed policies within the Medicare program that may also have an impact on the geographic composition and distribution of services to Medicare beneficiaries. The committee observed that the sheer size of the program, accompanied by the incentives that its payment policies exert on practitioner decisions, such as the method of subsidizing the costs of training physicians, may act as an impediment to the achievement of some access objectives. For example, the National Health Service Corps and other programs appear to have improved access, but the magnitude of spending on such programs is very small relative to the size of our health care system and the financial incentives that tend to exacerbate imbalances in access to primary care services. On the other hand, Medicare may be inadvertently contributing to these imbalances through the unaccountable ways in which health professional education is financed and health services are reimbursed.

Thus, the picture that emerges from the committee’s review of the evidence is multidimensional. Yet, the committee was tasked with determining how its recommendations about the accuracy of geographic adjustment would affect access and quality of health care and the supply and distribution of the health care workforce. With regard to access to care, the committee

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