Understanding Physicians' Response to the Medicaid Expansion

Mounting evidence of increased health care utilization associated with the Medicaid expansion suggests that providers expanded capacity to meet increased demand. However, researchers have yet to fully understand the supply-side response to the Medicaid expansion. We use a recent source of national all-payer claims and practice management data (2011-2017) from a health technology company (athenahealth Inc.) to study the labor supply and patient panel composition of providers in expansion states versus nonexpansion states, before and after the expansion.

Providers in expansion states treated a significantly greater number of Medicaid patients following the expansion, compared to providers in non-expansion states. We test for response heterogeneity by provider characteristics, finding similar increases in the number of Medicaid patients treated by specialty (specialist vs. primary care) and provider type (physician vs. nurse practitioner). However, provider response to the Medicaid expansion differed considerably by pre-2014 Medicaid participation. Providers who treated Medicaid patients prior to the expansion drove our overall finding, while providers who had not treated Medicaid patients before 2014 did not do so after.

To understand how providers expanded capacity for Medicaid patients, we examine total labor supply (i.e., number of appointments for all payer types), visit length (i.e., scheduled appointment duration), and wait time (i.e., number of days between scheduling and appointment). We find some evidence of an increase in total labor supply and a decrease in visit length for Medicaid patients, suggesting multiple mechanisms to accommodate increased demand for Medicaid patients.

Finally, we test for spillover effects on patients with Medicare and commercial insurance. We find no change in the number of established non-Medicaid patients treated, their scheduled visit length, nor how long they waited for an appointment. However, we find some evidence that providers who treated more Medicaid patients following the expansion saw fewer new patients. Overall, our results largely run counter to concerns that Medicaid expansions impaired access to care for non-Medicaid patients, with some caveats.