The Impact of Provider Network Breadth on Outpatient Care Utilization of Medicaid Beneficiaries

This paper examines how provider network breadth affects outpatient care utilization among Medicaid beneficiaries in Arkansas, where enrollees were assigned to private health insurance plans with varying network sizes under a unique Medicaid expansion waiver. Using cross-sectional and temporal variation in network breadth, I find that narrower networks reduce in-network visits to primary care providers (PCPs) and specialists. However, beneficiaries often substitute to out-of-network providers, particularly for specialist care, resulting in no net change in total specialist utilization. For PCP visits, substitution is incomplete, leading to modest reductions in total visits. Additional analyses provide evidence that this incomplete substitution stems from persistent access barriers, which in turn reduce the use of preventive services. These findings indicate that while flexible out-of-network coverage—as permitted under Arkansas’s waiver—can mitigate some effects of narrow networks, ensuring robust in-network access remains critical for promoting access to primary care and maintaining care quality among Medicaid beneficiaries.