Physician payment and prenatal care access for heterogeneous patients

Changes in prospective payments to reimburse physicians for serving Medicaid patients have been rising in many States. Policy makers anticipate that higher fees will increase access to services. This paper explores whether physicians respond to the increased payment by increasing access differentially by patient type. Physicians may gain from serving only chose patients expected to be of low medical risk and cost Empirical tests using Medicaid data from 1988 to 1991 for prenatal care provision in Washington State show fees are significant in improving access to care for the average patient with significantly greater improvement for Hispanics and single patients. (JEL III, I18).