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Public Payment Mandates and Provider Supply

Author

Listed:
  • Hoehn-Velasco, Lauren

    (Georgia State University)

  • Huang, Yu-Ting

    (Georgia State University)

  • Yusuff, Olanrewaju

    (Georgia State University)

Abstract

Public insurance reimbursement policies shape the structure and reach of healthcare markets. In this study, we examine the 1980 federal Medicaid mandate requiring states to reimburse Certified Nurse-Midwives, one of the first reforms targeting non-physician providers. We find the mandate increased midwife-attended deliveries by 1.1 percentage points, an 80% rise, adding about 1,100 midwife births annually per state by 1985. We also document a geographic expansion of midwife services into unserved areas and increased hospital employment, consistent with supply-side labor market responses. Our findings demonstrate that reimbursement mandates directly alter healthcare delivery by expanding provider use and reshaping the workforce.

Suggested Citation

  • Hoehn-Velasco, Lauren & Huang, Yu-Ting & Yusuff, Olanrewaju, 2025. "Public Payment Mandates and Provider Supply," IZA Discussion Papers 18149, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp18149
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    Keywords

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    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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