The Effect of a Major Coverage Expansion on Physician Work Hours: Evidence from the Children’s Health Insurance Program

Abstract:     
The passage of health reform has raised a number of questions, including the following: how will physicians respond to a major coverage expansion? In particular, will they work longer hours to accommodate an influx of demand? Our study addresses this question with a natural experiment - we use the introduction of the Children’s Health Insurance Program (CHIP) in 1997, which significantly expanded children’s eligibility for public health insurance coverage. The magnitude of the CHIP expansion varied across states and over time, allowing its effects to be identified using a state-year fixed effects model. We focus on pediatricians, and we measure their self-reported work hours using multiple waves of the physician survey component of the Community Tracking Study. We test whether pediatricians in states with larger CHIP expansions increased their annual work hours relative to pediatricians in states with smaller CHIP expansions. We find a large negative relationship between the magnitude of a state's CHIP expansion and trends in pediatricians' work hours. One possible explanation for this finding is that reimbursement rates in the CHIP program are well below that of private insurers. If CHIP expansions reduced average reimbursement rates, and if pediatricians exhibit a normal supply curve, then lower average reimbursement rates could account for the observed association with work hours.

Number of Pages in PDF File: 49

Keywords: Children’s Health Insurance Program, health insurance, pediatrician, labor supply, Community Tracking Study

JEL Classification: I11, J21, J44

working papers series