Working Paper: NBER ID: w10445
Authors: Anna Aizer; Adriana Lleras-Muney; Mark Stabile
Abstract: This paper explores whether choice of provider explains any of the observed infant health gradients, and if so, why poor women choose different providers than their richer neighbors. We exploit an exogenous change in policy that occurred in California in the early 1990s that suddenly increased Medicaid payments to hospitals and which lead to a sharp change in where women with Medicaid delivered. To characterize the extent to which poor women responded to the increase in provider access, we calculate hospital segregation indices (which measure the extent to which Medicaid mothers delivered in separate hospitals than privately insured mothers residing in the same geographic area) both before and after the policy change for each market in California and show that it fell sharply after the policy change. Even though black mothers responded least to the increase in provider choice afforded by the policy change, they benefited the most from hospital desegregation in terms of reduced neonatal mortality and decreased incidence of very low birth weight. In contrast, other groups with lower initial neonatal mortality moved more and gained less in terms of improvements in birth outcomes.
Keywords: infant mortality; health disparities; Medicaid; hospital choice; racial disparities
JEL Codes: I12; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increase in Medicaid payments to hospitals (I18) | Increase in hospital choice (I11) |
| Increase in hospital choice (I11) | Improved hospital quality (I19) |
| Improved hospital quality (I19) | Improved health outcomes (I14) |
| Increase in Medicaid payments to hospitals (I18) | Decline in neonatal mortality rates for black mothers (J13) |
| Access to care (I11) | Improved health outcomes (I14) |
| Hospital desegregation (I19) | Improved health outcomes for black mothers (I14) |
| Increase in Medicaid payments to hospitals (I18) | Improved health outcomes for lower-income and less educated mothers (I14) |