Panel Paper: Does the Healthcare Educational Market Respond to Local Demand?

Saturday, November 9, 2019
I.M Pei Tower: Terrace Level, Terrace (Sheraton Denver Downtown)

*Names in bold indicate Presenter

Marcus Dillender, W.E. Upjohn Institute for Employment Research, Andrew Friedson, University of Colorado, Denver, Cong Gian, Indiana University, Bloomington and Kosali Simon, Indiana University

The US has been concerned about the adequacy of the health care workforce for several decades, as is evidenced by the many policies (e.g., visa waivers, federal loan programs, etc.) that address workforce availability by geography and specialty. As Affordable Care Act (ACA) expansions occurred, the sector has kept a watchful eye on how the system will respond, i.e. whether there be room in the healthcare system to absorb those seeking new forms of care or there will be changes in way health care delivery models (shorter appointments, more use of technology, diagnostics, physician extenders or telemedicine)

Recent empirical evidence suggests that the ACA increased demand for healthcare across the U.S. However, it is unclear if or how the supply side has responded to meet this demand, either by maintaining the pool of existing workers, or by attracting workers from other countries or sectors, or training new workers. Similarly, it is not clear if students or schools have reacted to the increased demand, or if they even perceived the increased demand to be a long-term increase given uncertainty about the ACA. Moreover, the ACA might also induce the behavior of educational institutions; since graduation outcomes are the joint product of individual- and organization-level choices, it is unclear how the educational sector’s output would be affected.

In this paper, we utilize graduation counts in health professional training programs that were mandatorily reported via the Integrated PostSecondary Education Data System (IPEDS) to examine whether states that expanded Medicaid saw increased numbers entering the healthcare workforce through educational programs in Medicaid expanding. Using a combination of difference-in-differences framework, a triple-difference specification employing baseline health un-insurance rate at county level, and synthetic control regressions, we find no evidence of educational pipeline increases and are able to rule out fairly small magnitudes, even in the case of sub-sectors that might be particularly responsive (such as one-year degrees), implying that pipeline increases for healthcare degrees do not represent one of the major ways in which the supply side is adjusting.

Our research is significant because past literature does not provide much guidance on how the educational pipeline responds, and literature on general healthcare labor market response to insurance expansions is also limited. Given our findings, which do not necessarily indicate a future shortfall in capacity, more research is needed to fully understand how the healthcare workforce has adjusted to the new post-ACA levels of utilization and how these health care markets are performing.