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Research ArticleArticles

Public Insurance Expansions and Labor Demand in Physician Practices

Hilary Barnes, Alice J. Chen, Matthew D. McHugh and Michael R. Richards
Published online before print May 08, 2023, 0920-11176R2; DOI: https://doi.org/10.3368/jhr.0920-11176R2
Hilary Barnes
Hilary Barnes is an assistant professor at Widener University.
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Alice J. Chen
Alice Chen is an associate professor at the University of Southern California ().
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  • For correspondence: [email protected]
Matthew D. McHugh
Matthew McHugh is a professor of nursing at University of Pennsylvania.
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Michael R. Richards
Michael Richards is a professor at Baylor University.
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Abstract

Existing research has examined the demand-side effects of ACA Medicaid expansions, but supply-side implications are not well-understood. Using a model of uncertain demand, we show how firms choose between fixed- and variable-cost labor investments. We empirically test the model predictions via a difference-in-differences strategy that uses Medicaid expansions and detailed staffing information on over 129,000 physician practices. We find no substitution toward less expensive provider types whose employment carries fixed costs in the short run; instead, practices are 4-8 percent less likely to employ any nurse practitioner or physician assistant post-expansion. Small practices seem to drive the restrained labor demand effects.

JEL Codes:
  • I11
  • J21
  • J44
Keywords:
  • firm production
  • labor inputs
  • physician practices
  • health care workforce
  • Medicaid insurance expansion

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Journal of Human Resources: 60 (3)
Journal of Human Resources
Vol. 60, Issue 3
1 May 2025
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Public Insurance Expansions and Labor Demand in Physician Practices
Hilary Barnes, Alice J. Chen, Matthew D. McHugh, Michael R. Richards
Journal of Human Resources May 2023, 0920-11176R2; DOI: 10.3368/jhr.0920-11176R2

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Public Insurance Expansions and Labor Demand in Physician Practices
Hilary Barnes, Alice J. Chen, Matthew D. McHugh, Michael R. Richards
Journal of Human Resources May 2023, 0920-11176R2; DOI: 10.3368/jhr.0920-11176R2
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Keywords

  • I11
  • J21
  • J44
  • firm production
  • labor inputs
  • physician practices
  • health care workforce
  • Medicaid insurance expansion
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