Assist. Prof. Molly Schnell, PhD

Supply-side Responses to Health Insurance Provision

While visiting CES, Molly Schnell will study factors that affect access to health care in the United States. In particular, she will examine how the supply side responds to expansions of different types of health insurance coverage that differ in their provider reimbursement generosity. As is well known, health insurance expansions increase demand for health care by decreasing the prices paid by consumers. This increase in demand is in turn anticipated to cause supply-side responses that increase the market-level supply of health care resources (Arrow, 1963). Recent empirical work has confirmed these positive general equilibrium effects, showing that firm entry, technology adoption, and labor supply in the health care sector increase in response to sizable insurance expansions. However, all health insurance is not created equal, and expansions of insurance with generous patient cost-sharing but low reimbursement rates for providers might generate the anticipated demand-side, but not supply-side, responses. As an increasing number of countries adopt two-tiered health care systems with both private and public insurance coverage, an understanding of how relative insurance generosity affects supply-side responses to health insurance provision is key.

Molly Schnell is a health economist with interests in health care and industrial organization. Her research focuses on understanding local drivers of demand for and supply of health and health care services.

Ms. Schnell is an Assistant Professor at Northwestern University and a Faculty Research Fellow at the National Bureau of Economic Research. She is also a Saieh Family Fellow at the Becker Friedman Institute at the University of Chicago. She received her PhD from Princeton University and spent a year as a postdoctoral research fellow at the Stanford Institute for Policy Research.