Health insurance expansion and physician supply

When new bills pass in Congress or state legislatures that expand health insurance coverage, most researcher look at the demand side effect.  How does the insurance expansion affect the number uninsured?  How does it affect access to care?  How does it affect out of pocket cost?

What is less frequently studied is the supply side effects.  Namely, does expanding insurance coverage increase the number of doctors, nurses, medical assistants and other stuff in the U.S?  This is the question that Chen et al. (2017) examine.  In particular, they look at the re-authorization and expansion of the Children’s Health Insurance Program (CHIP) in 2009 and they test whether the number of pediatricians increase after the CHIP expansion.  They find:

…newly trained pediatricians are 8 percentage points more likely to subspecialize and as much as 17 percentage points more likely to enter private practice after the law passed. There is also suggestive evidence of greater private practice growth in more rural locations. The sharp supply-side changes that we observe indicate that expanding public insurance can have important spillover effects on provider training and practice choices.

Very interesting study.

Source:

• Chen A, Lo Sasso AT, Richards MR. Supply-side effects from public insurance expansions: Evidence from physician labor markets. Health Economics. 2017;1–19. https://doi.org/10.1002/hec.3625

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