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Medicaid Policy, Physician Behavior, and Health Care for the Low-Income Population

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  • Laurence Baker
  • Anne Beeson Royalty

Abstract

June 1998 (Revised) Concerns about the health of poor children and mothers produced major changes in the Medicaid public insurance program during the last decade, including expansions in program eligibility and increases in fees paid to physicians who care for covered patients. We examine physician responses to Medicaid policy changes aimed at improving care for pregnant women in order to understand the effects of Medicaid policy on physician behavior as well as to study the effectiveness of the expansions in improving access to care. We find that expanded eligibility for Medicaid did increase access to physician services. However, contrary to the findings of some previous studies, increases in access are only apparent for the physicians in "public" institutions such as public clinics and hospital clinics; we find no evidence that increases in eligibility increase access to the physicians in our sample who are based in private offices. Our evidence also suggests that the impact of fees on physician behavior may be smaller than previous estimates would imply. We find that increases in fees are associated with increases in service to poor populations by these young private physicians, but some of this increase simply reflects shifting of patients from "public" sites to private physician offices.

Suggested Citation

  • Laurence Baker & Anne Beeson Royalty, "undated". "Medicaid Policy, Physician Behavior, and Health Care for the Low-Income Population," Working Papers 97003, Stanford University, Department of Economics.
  • Handle: RePEc:wop:stanec:97003
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    1. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
    2. Currie, Janet & Gruber, Jonathan & Fischer, Michael, 1995. "Physician Payments and Infant Mortality: Evidence from Medicaid Fee Policy," American Economic Review, American Economic Association, vol. 85(2), pages 106-111, May.
    3. Janet Currie & Jonathan Gruber, 1994. "Saving Babies: The Efficacy and Cost of Recent Expansions of Medicaid Eligibility for Pregnant Women," NBER Working Papers 4644, National Bureau of Economic Research, Inc.
    4. Hope Corman & Theodore J. Joyce & Michael Grossman, 1987. "Birth Outcome Production Function in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 22(3), pages 339-360.
    5. Grossman, Michael & Joyce, Theodore J, 1990. "Unobservables, Pregnancy Resolutions, and Birth Weight Production Functions in New York City," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 983-1007, October.
    6. Aaron S. Yelowitz, 1995. "The Medicaid Notch, Labor Supply, and Welfare Participation: Evidence from Eligibility Expansions," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 909-939.
    7. Jeffrey E. Harris, 1982. "Prenatal Medical Care and Infant Mortality," NBER Chapters,in: Economic Aspects of Health, pages 13-52 National Bureau of Economic Research, Inc.
    8. Long, Stephen H. & Settle, Russell F. & Stuart, Bruce C., 1986. "Reimbursement and access to physicians' services under Medicaid," Journal of Health Economics, Elsevier, vol. 5(3), pages 235-251, September.
    9. Baker, Laurence C., 1997. "The effect of HMOs on fee-for-service health care expenditures: Evidence from Medicare," Journal of Health Economics, Elsevier, vol. 16(4), pages 453-481, August.
    10. David M. Cutler & Jonathan Gruber, 1996. "Does Public Insurance Crowd out Private Insurance?," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 391-430.
    11. Hope Corman & Theodore J. Joyce & Michael Grossman, 1985. "Birth Outcome Production Functions in the U.S," NBER Working Papers 1729, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Gray, Bradley, 2001. "Do Medicaid physician fees for prenatal services affect birth outcomes?," Journal of Health Economics, Elsevier, vol. 20(4), pages 571-590, July.
    2. Johanna Catherine Maclean & Ioana Popovici & Elisheva Stern, 2015. "Health Insurance Expansions and Provider Behavior: Evidence from Substance Use Disorder Providers," DETU Working Papers 1510, Department of Economics, Temple University.
    3. Hahn, Youjin, 2013. "The effect of Medicaid physician fees on take-up of public health insurance among children in poverty," Journal of Health Economics, Elsevier, vol. 32(2), pages 452-462.
    4. McInerney, Melissa & Mellor, Jennifer M., 2012. "Recessions and seniors’ health, health behaviors, and healthcare use: Analysis of the Medicare Current Beneficiary Survey," Journal of Health Economics, Elsevier, vol. 31(5), pages 744-751.
    5. Sonchak, Lyudmyla, 2015. "Medicaid reimbursement, prenatal care and infant health," Journal of Health Economics, Elsevier, vol. 44(C), pages 10-24.
    6. Craig L. Garthwaite, 2011. "The Doctor Might See You Now: The Supply Side Effects of Public Health Insurance Expansions," NBER Working Papers 17070, National Bureau of Economic Research, Inc.
    7. Thomas C. Buchmueller & Sean Orzol & Lara D. Shore-Sheppard, 2015. "The Effect of Medicaid Payment Rates on Access to Dental Care among Children," American Journal of Health Economics, MIT Press, vol. 1(2), pages 194-223, Spring.
    8. Thomas C. Buchmueller & Sarah Miller & Marko Vujicic, 2014. "How Do Providers Respond to Public Health Insurance Expansions? Evidence from Adult Medicaid Dental Benefits," NBER Working Papers 20053, National Bureau of Economic Research, Inc.
    9. Jonathan Gruber & Kathleen Adams & Joseph P. Newhouse, 1997. "Physician Fee Policy and Medicaid Program Costs," Journal of Human Resources, University of Wisconsin Press, vol. 32(4), pages 611-634.
    10. He, Daifeng & McInerney, Melissa & Mellor, Jennifer, 2015. "Physician responses to rising local unemployment rates: Healthcare provision to Medicare and privately insured patients," Journal of Health Economics, Elsevier, vol. 40(C), pages 97-108.
    11. Thomas Buchmueller & John C. Ham & Lara D. Shore-Sheppard, 2015. "The Medicaid Program," NBER Chapters,in: Economics of Means-Tested Transfer Programs in the United States, volume 1, pages 21-136 National Bureau of Economic Research, Inc.
    12. repec:mpr:mprres:3323 is not listed on IDEAS
    13. Larry Howard, 2014. "Do the Medicaid and Medicare programs compete for access to health care services? A longitudinal analysis of physician fees, 1998–2004," International Journal of Health Economics and Management, Springer, vol. 14(3), pages 229-250, September.
    14. Justin B. Bullock & W. David Bradford, 2016. "The differential effect of compensation structures on the likelihood that firms accept new patients by insurance type," International Journal of Health Economics and Management, Springer, vol. 16(1), pages 65-88, March.
    15. Thomas Buchmueller & Sarah Miller & Marko Vujicic, 2016. "How Do Providers Respond to Changes in Public Health Insurance Coverage? Evidence from Adult Medicaid Dental Benefits," American Economic Journal: Economic Policy, American Economic Association, vol. 8(4), pages 70-102, November.

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