Doctoral Dissertation Research in Economics: The Effect of Certified Nurse Midwife Scope-of-Practice Laws on Health Costs, Prices, and Outcomes

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This research project will study the effects of changes in scope of practice (SOP) laws on hospital cost, price of health services, and the quality of health care. Specifically, this research studies whether changing SOP laws to allow Certified Nurse Midwives (CNMs) to provide obstetrics care without the supervision of medical doctors (MDs) reduce the hospital cost of giving birth without reducing the quality of care and if this cost savings are passed on to patients by charging lower prices. The research will also study the mechanisms through which allowing CNMs more independence lead to cost savings in the provision of birth services reduces cost. The researchers will use hospital data from seven states that recently have changed SOP laws. This research project studies an important economic issue that has important policy implications. The research results will provide guidance on how to decrease or slow the growth rate of health care cost. This can help establish the U.S. as the global leader in healthcare cost reforms. This research project leverages quasi-random variation in the strictness of SOP laws across states and time to estimate the effect of relaxing these laws on hospital cost, service quality, and pass-through of cost savings to patients. Using generalized difference-in-difference and event-study methods, the study will: (i) identify the causal impact of SOP laws on costs; (ii) estimate whether these savings are passed on to consumers via reductions in price or increases in quality; (iii) examine how market structure mediates these effects; and (iv) identify causal mechanisms for the effects of SOP laws. This approach will be able to estimate the causal effect of relaxing SOP laws because it adjusts for fixed differences across states that change their laws and those that do not. The effect is unlikely to be confounded by differential trends in the outcome of interest because political processes drive the timing of SOP law changes and these changes are unrelated to trends in the outcomes of interest. Finally, states adopt new SOP laws at different times, making it unlikely that there are other simultaneous shocks that would confound the effect of the policy. The project’s detailed discharge-level data will enable it to calculate more precise measures of cost and resource use. Finally, the detailed data can help estimate the relative importance of different causal mechanisms. The results of this research can help establish the U.S. as the global leader in healthcare cost reforms.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.