Time is money: opportunity cost and physicians' provision of charity care 1996-2005.

In the fragmented U.S. health care system, charity care is a crucial source of health care for the uninsured, with private practice physicians—due primarily to the sheer size of the workforce—providing upwards of 80 percent of all of the care delivered to the nation's uninsured (Blumenthal and Rizzo 1991; Fairbrother et al. 2003;). However, as the number of uninsured persons has grown over time, the percentage of physicians providing charity care nationwide has decreased from 76.3 percent in 1996 to 68.2 percent in 2005. The decrease has been observed across all geographic regions, physician specialties, and both urban and rural areas, making it increasingly likely that the uninsured are going without medical care or are increasingly clustered among fewer physicians (Cunningham and May 2006). With the current downturn in the economy, more and more persons are losing their health coverage, and still others are underinsured. Consequently, tens of millions of individuals rely on some form of charity care. While the recent passage of health reform proposes to cover most of the nation's uninsured, the fact remains that not everyone will be covered, and the problem of underinsurance is likely to persist. Therefore, it is important from a policy perspective to understand what factors, if any, are influential in a physician's decision to provide charity care, and to determine the amount of charity care provided. While a number of studies have been conducted to understand the personal motivations physicians have in choosing specialties and/or practice locations that involve caring for large proportions of underserved patients, few studies have looked closely at the physician population as a whole to assess the influence of economic factors on charity care provision (Li, Williams, and Scammon 1994; Miller, Hooker, and Mains 2006; Curlin et al. 2007;). Accounting for inflation, physicians' real income has decreased by 7.1 percent over the last decade, and this may explain physicians' reluctance to provide charity care (Tu and Ginsburg 2006). Physicians may choose to forego providing charity care because of concerns about the extent of care required by underserved populations, financial constraints, malpractice fears, and the high costs of follow-up care (Holleman et al. 1991). Cunningham and Hadley (2008) published a study that examined the effect of changes in physician income on physicians' decision to start or stop providing charity care. The authors found that both large positive and large negative changes in income were associated with physicians choosing to begin providing charity care. Cunningham and Hadley focus on physicians' decision to provide charity care and ignore the amount of charity care provided, because “… the decision to provide any charity differs in important ways from the decision on the quantity of charity care, … [and] trend data from the CTS show that the proportion of physicians providing charity care has declined in the past ten years, but that the average number of charity care hours for those who offer any care has remained relatively stable” (pp. 101–102). By contrast, this study considers the effect of hourly wage—rather than total income—on both the physician's decision to provide any charity care, and—conditional on providing any charity care—the amount of charity care provided. It also makes a new contribution by modeling charity care provision separately among salaried and nonsalaried physicians. Analyzing the data in pooled cross-sectional form permits unobserved general time trends, unobserved time-invariant differences between study sites, and unobserved time-varying differences between study sites to be controlled for while assessing potential differences in the effect of hourly wage on charity care over time.