Are family physicians good for you? Endogenous doctor supply and individual health

Objective. To investigate the impact of family physician (FP) supply on individual health, adjusting for factors that affect both health and FPs' choice of location. Study Population. A total of 49,541 individuals in 351 English local authorities (LAs). Data Sources. Data on individual health and personal characteristics from three rounds (1998, 1999, and 2000) of the Health Survey for England were linked to LA data on FP supply. Study Design. Three methods for analyzing self-reported health were used. FP supply, instrumented by house prices and by age-weighted capitation payments for patients on FP lists, was included in individual-level health regressions along with individual and LA covariates. Results. When no instruments are used FPs have a positive but statistically insignificant effect on health. When FP supply is instrumented by age-related capitation it has markedly larger and statistically significant effects. A 10 percent increase in FP supply increases the probability of reporting very good health by 6 percent. Conclusion. After allowing for endogeneity, an increase in FP supply has a significant positive effect on self-reported individual health.