Impact of Physician Supply on Health Outcomes of Underserved Populations

• In Event: Provider Supply and Assessment

Abstract

Large geographic disparities in physician supply persist in the United States, and drug-overdose mortality is disproportionately concentrated in areas with provider shortages. This paper studies the effect of Health Professional Shortage Area (HPSA) designations, a federal policy that provides a 10 percent bonus on Medicare reimbursement to physicians practicing in designated regions, on drug-overdose mortality and primary care delivery at the county level. Despite the longstanding use of HPSA designations as a policy lever, little is known about the mechanisms through which this physician supply policy affects health outcomes.

Using Health Resources and Services Administration records, I identify 260 counties first designated as HPSAs between 2010 and 2019 as the treatment group. The control group consists of counties that were never designated through 2020. I combine these designation records with Medicare Fee-For-Service Provider Utilization and Payment data (2013-2019), Medicare Part D Prescribers data (2013-2019), and county-level drug-overdose mortality rates for the population aged 65 and over from the CDC (2010-2019). I adopt a difference-in-differences event study framework, exploiting variation in the timing and geography of HPSA designations at the county level.

I find that HPSA designation leads to a decrease of 34 drug-overdose deaths per 100,000 population aged 65 and over within five years, accounting for approximately 6 percent of average drug-overdose deaths. This reduction occurs despite a 4 percent increase in opioid claims per Medicare Part D enrollee, driven by more patients receiving prescriptions rather than higher-volume prescriptions per patient. I provide evidence that incumbent physicians shift their time allocation from brief visits (under 20 minutes) toward moderate-length visits (15-30 minutes), suggesting that enhanced physician-patient interaction contributes to safer medication management. This visit composition shift is concentrated in counties with low baseline presence of young physicians, indicating that existing physicians drive the change in care patterns. Placebo tests confirm that deaths from external causes unrelated to primary care are unaffected by the designation.

These findings carry three policy implications. First, modest financial incentives can alter incumbent physician behavior and improve health outcomes in underserved regions without requiring new physician recruitment. Second, supply-side reimbursement policies can complement clinical opioid guidelines by improving the quality of physician-patient interactions. Third, the intensity of primary care oversight matters more than prescription volume for patient safety.

Author

• Sooa Ahn, The Ohio State University
  Presenting Author