Substitution of physicians and other providers in outpatient mental health care

This paper evaluates the extent to which patients may substitute physician and non-physician outpatient mental health services in response to insurance coverage which differs by provider type. Using data from the National Medical Expenditure Survey, a semi-flexible two-stage demand specification is used to estimate substitution elasticities. Our results indicate that insurance coverage significantly affects the choice of provider from whom care is sought and, for individuals who seek care from both provider types, that physician and non-physician services are substitutes. Our elasticity estimates provide a welfare economic argument supporting coverage parity of physician and non-physician mental health services.