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The Impacts of Physician Payments on Patient Access, Use, and Health (WP-19-23)

Diane Alexander and Molly Schnell

Alexander and Schnell examine how the amount a physician is paid influences who they are willing to see. Exploiting large, exogenous changes in Medicaid reimbursement rates, the researchers find that increasing payments for new patient office visits reduces reports of providers turning away beneficiaries: Closing the gap in payments between Medicaid and private insurers would reduce more than two-thirds of disparities in access among adults and would eliminate disparities among children. These improvements in access lead to more office visits, better self-reported health, and reduced school absenteeism. The authors’ results demonstrate that financial incentives for physicians drive access to care and have important implications for patient health.

Diane Alexander, Economist, Federal Reserve Bank of Chicago

Molly Schnell, Assistant Professor of Economics and IPR Fellow, Northwestern University

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