Physician Supply and Public Health: Historical Insights into Mortality Rates

A new study, published in the March 2026 issue of The Review of Economics and Statistics, examines the relationship between physician availability and public health outcomes during a critical period of medical transition. Researchers Helge Liebert of the Swiss National Bank and University of Zürich, and Beatrice Mäder of the University of St. Gallen (now at Polynomics), investigated healthcare provision in Germany between 1928 and 1936, revealing key insights into the impact of physician supply on mortality rates.

The Impact of Physician Availability

The study focused on a unique historical circumstance – the expulsion of Jewish physicians from statutory health insurance in Germany. This event created an exogenous shock to the supply of physicians in different regions, allowing Liebert and Mäder to isolate the effect of physician availability on public health. Their research demonstrated that increases in the number of physicians led to reductions in both infant mortality and mortality from common childhood diseases.

Diminishing Returns to Healthcare Provision

While increased physician supply demonstrably improved health outcomes, the study also identified a phenomenon known as diminishing marginal returns. This means that while the initial increase in physicians had a significant impact, the benefit of adding even more physicians decreased over time. This suggests that there’s a point at which simply increasing the number of healthcare providers doesn’t translate into proportional improvements in public health.

Methodology and Data

Liebert and Mäder constructed a new panel dataset covering German municipalities from 1928 to 1936. They employed a semiparametric control function approach to address the potential endogeneity of healthcare supply – meaning they accounted for factors that could simultaneously influence both physician supply and mortality rates. The expulsion of Jewish physicians served as a natural experiment, providing a credible way to determine the causal effect of physician availability.

Historical Context and Modern Relevance

The findings align with observed historical trends in infant mortality throughout the 20th century. Understanding these historical dynamics can inform contemporary healthcare policy and resource allocation. While the context of 1930s Germany is specific, the principle of diminishing returns to healthcare provision remains relevant in modern healthcare systems worldwide.

About the Researchers

Helge Liebert is a data scientist at the Swiss National Bank, with a background in forecasting and time series analysis. He previously held positions at the University of Zurich and Harvard Medical School and is a Research Fellow at IZA – Institute of Labor Economics [1]. Beatrice Mäder is currently at Polynomics, having previously been at the University of St. Gallen [2].

Key Takeaways

• Increases in physician supply are associated with reduced infant mortality and mortality from common childhood diseases.
• The relationship between physician supply and health outcomes exhibits diminishing marginal returns.
• Historical analysis can provide valuable insights for contemporary healthcare policy.

Source: Liebert, H., & Mäder, B. (2026). Physicians and the Production of Health: Returns to Health Care during the Mortality Transition. The Review of Economics and Statistics, 108(2), 452-469. [2]