The Effect of the Supply of Physicians on Health in Underserved Areas
with Shreya Tandon
Millions of Americans live in federally designated areas with an undersupply of primary care physicians. We estimate the causal effects of new physician arrivals to underserved areas on net physician supply, healthcare utilization, and health outcomes of local residents using quasi-random variation in the timing of physician placements through the National Health Service Corps program, linked to Medicare claims data. We find that physician arrivals increase overall primary care supply. Half of the healthcare provided by new entrants would have been satisfied by other doctors, while the other half constitutes an increase in overall utilization. The additional utilization is concentrated in preventive care services and elective inpatient procedures and leads to significant reductions in emergency hospitalizations and mortality. Health improvements persist for at least four years following physician arrival and are particularly pronounced for beneficiaries with chronic conditions and those living in more disadvantaged and rural locations.