Effect of Market Forces on Quality of Care

Background: Primary care is a gateway to other care at the Veterans Health Administration (VHA) and is considered to be an important factor in managing health risks. VHA struggles to meet the demand for primary care appointments due to limited clinical resources. Under these conditions, patients may be less likely to receive comprehensive care from VHA clinicians during their primary care visits, leading to dissatisfaction. VHA is one of the few healthcare systems that collects patient satisfaction surveys from outpatient appointments. The survey questions not only ask about satisfaction, but also characterize interactions and experiences with clinicians. Previous studies have shown shifts in market forces due to U.S. health policies, such as Medicaid expansion, affect utilization at the VHA. If market forces decrease demand for VHA primary care, economic theory suggests that the quality of care at the VHA will improve due to increased resources per appointment and VHA clinicians’ desire to retain their patients.

Method: Survey responses matched with primary care appointments during fiscal year 2010 through 2012 were used to measure the satisfaction level of each patient. Survey questions that characterized the interaction between the patient and their clinicians, activities of clinicians, and overall satisfaction of the patients were selected and their responses were dichotomized into satisfactory or not satisfactory and/or yes or no. Geographic factors that potentially characterize market forces influencing veterans to seek care outside of the VHA were used as predictors in a logistic regression model to predict patient satisfaction and quality of care. These factors included changes in Medicaid policy, Medicare Advantage penetration rates, proportion of employees with healthcare coverage from employer, household median income, housing price index, and number of non-federal primary care physicians per population (i.e. physician density).

Results: After adjusting for veterans’ characteristics that may affect patient satisfaction such as age, gender, race, self-reported health status, and access to care, geographic market factors such as primary care density, household median income, and employer sponsored insurance had significant effects on the survey responses related to quality of care. Regional physician density affected the probability of all aspects of quality of care; overall satisfaction, patients’ interaction with doctors, and clinical activities during their primary care visit. In particular, a one-standard deviation increase in regional physician density increased the probability of patients’ overall satisfaction with their most recent visit by 2.3%. In addition, one-standard deviation increases in household median income improved patients’ overall satisfaction with their clinicians by 0.28% and employer sponsored insurance rates improved patients’ overall satisfaction with the VHA by 0.9%.

Conclusion: This is one of the first studies that assess the effect of market forces on the VHA’s quality of care for primary care visits. Increases in physician density, household median income and private health insurance rates reduce the demand for VHA care and increase the probability of higher quality at VHA primary care visits.