Physicians receive less pay for outpatient care provided to Hispanic and non-Hispanic Black patients than for white patients, according to a new national study from LDI Senior Fellows Aaron Schwartz and David Asch, and LDI Executive Director Rachel M. Werner. The payment difference was even more pronounced for pediatric visits. Patients’ health insurance was a key factor in the disparities. 

“To put it plainly, doctors in the U.S. get paid more for taking care of white patients than for taking care of non-white patients,” said Asch. “Many factors explain that difference, but no factors justify it. Sometimes a single finding encapsulates the problem.”

The researchers are the first to analyze physician payments for outpatient care.

“Our study highlights the role of gaps in physician payments, which could broadly shape differences in health care across patient groups,” said Schwartz.

The study required combining several national databases, which included key patient and physician data from 2014 to 2021. Insurance payment information came from the Medical Expenditure Panel Survey, which collects detailed information on physician encounters through surveys. Once the data were assembled, the analysis included 152,336 outpatient visits from 38,772 unique patients. The patient group was 63.1% non-Hispanic white, 15.9% non-Hispanic Black, and 21.0% Hispanic.

Physicians Are Paid More for Visits With White Patients Than Black or Hispanic Patients

The researchers accounted for differences in the services patients received during their visits, the locations of practices, market characteristics, and the year of the visit. All patient groups received a similar level of outpatient care; however, payments to physicians were significantly higher for visits with white patients in every year of the study. On average, physicians received payments that were 8.8% lower for visits from Black patients and 9.8% lower for visits with Hispanic patients.

The biggest pay disparities were found in pediatric visits. Compared to payments for appointments with white children, physicians were paid 13.9% less for visits with Black children. For visits with Hispanic children, physicians received 15.1% less. The disparities were smaller among visits with geriatric patients, with an estimated 5.7% gap between Black and white patient visits. The payment difference for visits with Hispanic patients was 8.2%.

Patient Insurance Drove Pay Disparities

Among visits covered by fee-for-service Medicare, which standardizes payments for outpatient care, physicians experienced no payment disparities for appointments with Black and Hispanic patients, relative to white patients.

Medicaid was the sole insurance source for 9.1% of white patient visits, 23.2% of visits with Black patients, and 30.0% of visits with Hispanic patients. Like the overall findings, encounters among Medicaid beneficiaries resulted in physicians being paid more for visits with white patients than for visits with Black or Hispanic patients.

“Narrowing the gap in payment generosity between Medicaid and other insurers would considerably shrink the payment penalty that physicians face when they treat non-white patients,” said Schwartz.

However, a pattern of racialized payment disparities still occurred within uninsured patients and those with other types of health insurance, excluding fee-for-service Medicare.

Paying Physicians Equally for Identical Services Could Ease Disparities

Accounting for differences in visit content, geographic market, and year did not substantially affect the measures of payment disparities, nor did adjusting for demographic and patient health differences.

Differences in insurance coverage explained 44% to 43% of payment disparities. The estimated payment gaps narrowed substantially when the researchers modeled what would happen if all patients had the exact same coverage for outpatient visits.

“A 10% or 15% payment difference may not seem enormous. But we ran simulations to quantify how much these payment gaps explain differences in health care received by patients. We found that eliminating payment disparities could substantially narrow racial and ethnic disparities in health care use, particularly for children,” said Schwartz.

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The study, “Payments to Physician Practices and Incentives to Serve Different Racial and Ethnic Groups,” was published November 26, 2025 in JAMA Health Forum, by Aaron L. Schwartz, David A. Asch, and Rachel M. Werner.

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