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

  • Laurence Baker
  • Anne Beeson Royalty

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.

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Paper provided by Stanford University, Department of Economics in its series Working Papers with number 97003.

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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. 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.
  3. 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.
  4. 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.
  5. 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 106-11, May.
  6. Cutler, David M & Gruber, Jonathan, 1996. "Does Public Insurance Crowd Out Private Insurance?," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 391-430, May.
  7. 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.
  8. A. S. Yelowitz, . "The Medicaid notch, labor supply, and welfare participation: Evidence from eligibility expansions," Institute for Research on Poverty Discussion Papers 1084-96, University of Wisconsin Institute for Research on Poverty.
  9. 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.
  10. Gruber, J. & Currie, J., 1994. "Saving Babies: The Efficacy and Cost of Recent Expansions of Medicaid Eligibility for Pregnant Women," Working papers 94-11, Massachusetts Institute of Technology (MIT), Department of Economics.
  11. 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.
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