The effect of Medicaid expansion on Medicaid participation, payer mix, and labor supply in primary care

Abstract

Evidence of increased health care utilization associated with the Medicaid expansion suggests that clinicians increased capacity to meet demand. However, little is known about the mechanism underlying this response. Using a novel source of all-payer data, we quantified clinicians' response to the Medicaid expansion - examining whether and how they changed their Medicaid participation decisions, payer mix, and overall labor supply. Primary care clinicians in expansion states provided an average of 49 additional appointments per year (a 21% relative increase) for patients insured by Medicaid, compared to clinicians in non-expansion states - with new-patient visits representing half (25 appointments) of this overall increase. Clinicians did not increase their labor supply to accommodate these additional appointments. They instead offset the 1.7 percentage point average increase in Medicaid payer mix with an equivalent reduction in commercial payer mix. However, this reduction in commercial patient share represented only a 2.8% relative decrease, with commercially insured patients still comprising the majority of the average clinician's patient panel. Subsample analyses revealed a larger increase in care for Medicaid patients among clinicians with high Medicaid participation preceding the eligibility expansion.

Keywords: Labor supply; Medicaid; Payer mix; Primary care.