Public Reimbursement Mandates and Healthcare Supply: Evidence from Nurse Midwives

Public insurance reimbursement policies shape the structure and reach of healthcare markets.In this study, we examine the impact of mandated public insurance reimbursements for Certified Nurse-Midwives (CNMs), focusing on the 1980 federal Medicaid mandate requiring states to reimburse CNM services. We find that the mandate led to a 42% increase in midwife-attended deliveries. We also find a geographic expansion of midwife deliveries, suggesting that financial incentives affect both provider supply and service distribution. Despite these shifts, we observe little change in health outcomes, indicating that CNMs deliver safe care comparable to physicians. These results highlight how reimbursement mandates can reshape healthcare labor markets and expand access without compromising healthcare quality.