Nurse Practitioner Scope-of-Practice Regulations, Migration, and Labor Market Outcomes

Many states have recently reduced or are considering reducing physician oversight of nurse practitioner (NP) practice. Weakening physicians’ monopoly over the supply of primary care services may impact medical sector wages, labor force participation, and the geographic distribution of providers. However, empirical evidence on the effects of these regulatory changes on physician and NP migration and labor market choices remains sparse. In this paper, we investigate the impact of expanded nurse practitioner scope of practice on geographic dispersion and labor market outcomes of physicians and NPs.

Strict scope-of-practice regulations impose barriers to entry into certain practice areas for nurse practitioners. These regulations may suppress NP earnings while increasing income for primary care physicians, as these two providers generally provide similar services. Some scope-of-practice regulations require NPs to have a physician as a supervisor or collaborator when providing services, which may allow physicians to extract payments from NPs for this legally required oversight. Alternatively, physicians and NPs may be complements in providing primary care and both enjoy higher wages from their higher joint productivity when working together in supervisory or collaborative arrangements.

Scope-of-practice regulations may restrict the allowable physical distance between the practice sites of NPs and supervising physicians. Removing these laws may therefore impact the inter-state or intra-state geographic distribution of providers, with implications for access to care, wages, and competitive pressures in health care labor markets. Each of these effects is challenging to identify because of numerous confounding unobserved factors that might drive provider location choice and labor market outcomes.

In this paper, we address these questions using income and labor market outcomes data from the American Community Survey (ACS) and the Decennial Census, and individual-level geographic location of nurse practitioners and physicians from the Master Address File (MAF) maintained by the U.S. Census Bureau. We exploit exogenous variation in the timing of changes in nurse practitioner scope-of-practice laws from Traczynski and Udalova (2018) to examine responses in nurse practitioner and physician income and mobility. Using difference-in-difference and event study designs, we identify effects of scope-of-practice laws through changes in income in repeated cross-sections and changes in location within a provider over time as different states adopt less restrictive NP scope-of-practice laws at different times.

We link data from the ACS, the Decennial Census, and the MAF with the National Plan and Provider Enumeration System (NPPES), allowing us to identify the universe of nurse practitioners and primary care physicians in the U.S. The main advantage of the proposed linkage is the ability to observe location history over time in a panel framework and both income and location for past and current medical service providers. We follow individual providers’ geographic location decisions over time to understand the impact of regulation changes on provider dispersion and rural access to care. Additionally, we explore the effects of changes in state nurse practitioner scope-of-practice laws on the self-employment rate and retirement timing among nurse practitioners and primary care physicians.