The Increase in Disabled Workers and Healthcare Provider Incentives

Prior research has shown correlations between disability, poverty, unemployment and worker incentives. This paper examines healthcare provider incentives to have patients on disability. Medicare has historically reimbursed healthcare providers more than Medicaid for providing the same service. The percentage of disabled workers in all states and the District of Columbia is correlated with healthcare provider reimbursement. Disabled workers were defined as those qualified to receive benefits under the Social Security Old Age and disability program, OASDI. Healthcare provider incentives studied are Medicare fees, Medicaid fees, % state residents without insurance, and % state residents on Medicaid. A recipient incentive measure, median OASDI monthly beneficiary payment, was also included in the model. Percentage of residents with a college education, percentage of residents aged 45-49, and percentage of emplyment in manufacturing were also used. Four separate years (1989, 1993, 1998, and 2003) were modeled. Significant correlations between percent on OASDI disability and Medicaid insurance, Medicaid fees, and Medicare fees were seen. College education, age distribution, and manufacturing were significant. There was no correlation between the percent uninsured and the median monthly payment received by beneficiaries and the incidence of disability in states. There is evidence that healthcare providers are responding to the different government fee reimbursements by increasing the number of disabled workers in states with low Medicaid reimbursement and high number of residents on Medicaid insurance.