PATIENTS CHOICE OF HOSPITAL OR OFFICE FOR MEDICAID AMBULATORY CARE INALABAMA

The primary policy option that has been suggested to states over the y ears for shifting care for Medicaid beneficiaries away from hospital s ites and toward office sites has been to raise Medicaid fees to physic ians on the assumption that this increases the geographic availability of office-based care, which then naturally attracts Medicaid clients away from hospital sites. This study uses Medicaid claims data from th e state of Alabama to assess the role of geographic provider availabil ity relative to other factors in families' decisions to select a hospi tal or an office for an illness visit to a primary care or to a specia list physician. The authors examined the last ambulatory visit for an illness made by continuously enrolled children under age 8 in the firs t half of 1991. The authors found that both higher Medicaid office pra ctice density and the presence of larger Medicaid office practices wer e associated with choice of an office for ambulatory care, whereas the presence of larger Medicaid hospital practices were associated with c hoice of a hospital for care. Controlling for provider availability, h ospital users were less likely to have sought previous care for illnes s during the year, and were more likely to be rural residents, to have traveled away from their home counties for care, and to be eligible f or Medicaid through Aid to Families with Dependent Children, rather th an through the program's income expansions. We conclude that increased office-based provider availability must be coupled with improved acce ss for new, remote, and very low income families if Medicaid clients a re to be expected to voluntarily shift their choice of site for ambula tory care.