Health Insurance Expansion and Physician Distribution

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ABSTRACT Two of the concerns that have historically dominated discussions of the physician workforce in the US are the adequacy of the total supply of physicians and physicians' geographical distribution. While several articles have observed that the recent insurance expansion may increase demand for physician services and consequently amplify the concern of physician shortages, no study to date has systematically analyzed the potential influence of the expansion on physicians' geographical distribution. Gains in insurance coverage in recent years have been much larger in states that expanded Medicaid than in non-expansion states, thereby increasing demand for health care and creating more new earnings opportunities for physicians in expansion states. Further, within expansion states, earnings opportunities are likely to have expanded to the greatest degree in disadvantaged communities, where baseline rates of insurance coverage were lowest and gains in coverage greatest. Greater coverage gains in disadvantaged communities through the marketplace exchanges are likely to have contributed to the creation of new earnings opportunities in these communities as well. Taken together, these effects could, over time, attract more physicians to those communities that have historically been most deprived of them. To our knowledge, the proposed project will be the first study to assess the effect of the insurance expansion on the practice location decisions of physicians in the US. Specifically, it will examine four Aims: Aim 1. To assess the effect of the insurance expansion – specifically, of the Medicaid expansion and the growth in marketplace exchange coverage – on new physicians' (i.e., physicians just finishing graduate medical education) decisions regarding where to set up their first practices. Aim 2. To assess whether the expansion disproportionately led more new physicians to set up their first practices in disadvantaged communities, e.g., disadvantaged urban areas, small towns, and rural areas. Aim 3. To assess whether new physicians who set up their first practices in disadvantaged communities after the insurance expansion differed in education and qualifications (i.e., board certification, country, and prestige of medical school) from new physicians who set up their first practices in other communities. Aim 4. To assess the effect of the insurance expansion on established physicians' (i.e., physicians with already established practices) decisions regarding whether and where to relocate their practices. To examine the aims, we will analyze multiple large national data sets. Our empirical model of physicians' practice local choices will capture a wide range of attributes of physician market areas, including earnings opportunities, and permit us to simulate the effects of a variety of potential policy interventions. The study findings will have enormous relevance for health care policy over the next decade.