Resolving the Debate on Medicaid Coverage’s Impact on Emergency Department Use

Guest post Ken Perez, vice president of healthcare policy, Omnicell.

Ken Perez

One of the Affordable Care Act’s overarching goals is to lower cost, and one way it intended to accomplish this was by providing Medicaid coverage to more low-income adults, giving them greater access to and ability to pay for sources of care outside the emergency department (ED), resulting, in theory, in reduced ED use.

ED use is a significant driver of cost, accounting for 5 percent to 6 percent of U.S. health expenditures. Medicaid alone spends $23 billion to $47 billion each year on ED care.

There have been a number of different studies on the impact of providing Medicaid coverage to previously uninsured adults.

Some high-level research suggests that Medicaid coverage does not affect ED use. Pines, et al. analyzed ED use in 36 states—some of which were Medicaid expansion states and some were nonexpansion—for 2014, the first year of expanded Medicaid eligibility. The researchers concluded that there were no significant differences in overall ED use between expansion and nonexpansion states, though Medicaid-paid ED visits rose by 27.1 percent in the expansion states, while uninsured visits dropped by 31.4 percent and privately insured visits fell by 6.7 percent.

Most importantly, the researchers admitted, “…we do not know which visits were by patients who obtained new health insurance (Medicaid) in 2014, as opposed to those who were continuously enrolled, were uninsured, or may have switched insurance type” (Pines, et al., “Medicaid Expansion In 2014 Did Not Increase Emergency Department Use Bud Did Change Insurance Payer Mix,” Health Affairs, Aug. 2016).

In contrast, a randomized, controlled study by Finkelstein, et al. in involving 24,646 lottery-selected uninsured individuals in Oregon who were granted Medicaid coverage in 2008 showed that they increased their ED visits by 40 percent in the first 15 months after receiving coverage. Many observers speculated that the rise in ED use was due to pent-up demand and would therefore dissipate over time as the newly insured found and used other sites of care or as their health needs were met and their health improved. However, the researchers were unable to find any evidence that the increase in ED use due to Medicaid coverage is driven by pent-up demand that decreases over time; in fact, they found that the effect on ED use appears to persist over the first two years of coverage.

In addition, the study determined that Medicaid coverage increased the joint probability of a person’s having both an ED visit and an office visit by 13.2 percentage points, indicating that expanded coverage will not necessarily drive material substitution of office visits for ED use (Finkelstein, et al., “Effect of Medicaid Coverage on ED Use—Further Evidence from Oregon’s Experiment,” New England Journal of Medicine, Oct. 20, 2016).

As the randomized, controlled trial is the gold standard of research, Oregon’s study and its conclusions get the nod in the debate about the impact of Medicaid coverage on ED use.

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