Medicaid Expansion Results in Sustained Increase in ED Use

Tara Haelle

October 25, 2016

Two years after an expansion of Medicaid in Oregon, the balloon of emergency department (ED) visits that occurred immediately afterward has yet to deflate, according to a commentary published in the October 20 issue of the New England Journal of Medicine. The continued trend is unexpected, and the reasons are not entirely clear, experts say.

When Oregon used a random lottery to expand Medicaid to potential enrollees on a waiting list in 2008, ED visits increased 40% in the first 15 months after new individuals had the opportunity to enroll.

"This finding was greeted with considerable attention and surprise, given the widespread belief that expanding Medicaid coverage to more uninsured people would encourage the use of primary care and thereby reduce ED use," writes Amy N. Finkelstein, PhD, the John & Jennie S. MacDonald Professor of Economics at the Massachusetts Institute of Technology in Boston, and colleagues.

Despite the surprise, a variety of explanations could have accounted for the sudden increase, according to health economist Adam Powell, PhD, founder of Payer+Provider Syndicate, a healthcare consulting firm in Boston.

"ED use may have initially increased because newly insured people no longer had to worry about the cost of using ED services," Dr Powell told Medscape Medical News. "Previously, they may have been on their own to negotiate charity care or have had to deal with collections. Through its coverage of emergency services, Medicaid lessens the downsides of making a trip to the ED."

Another possibility mentioned by Dr Finkelstein's team is that enrollees might have needed time to find and develop relationships with new primary care providers.

"Many observers speculated that the increase in ED use would abate over time as the newly insured found alternative sites of care or as their health needs were addressed and their health improved," the authors write.

But that is not what happened. Continued analysis of data from 2007 through 2010 revealed no changes in the average number of ED visits per person, or whether a person visited the ED at all during each of the four 6-month periods after the 2008 expansion.

"Medicaid coverage increased the mean number of ED visits per person by 0.17 (standard error, 0.04) over the first 6 months or about 65% relative to the mean in the control group of individuals not selected in the lottery," Dr Finkelstein and colleagues report. Point estimates then remained similar over the next 18 months.

"Thus, using another year of ED data, we found no evidence that the increase in ED use due to Medicaid coverage is driven by pent-up demand that dissipates over time," the authors write. No change occurred in hospital admissions during that period either, so the authors decided to look more closely at possible relationships between physician office visits and ED use.

They found that the joint likelihood of a person visiting both the ED and a physician's office was approximately 13.2 percentage points higher among those with Medicaid coverage. Then they separated the two types of visits "to predict the effect that Medicaid coverage would have on the joint probability of having both types of visits if the increases in the two types of visits were independent of each other." The result was an increase of 9.9 percentage points, which was less than the actual rate of increase.

"We thus found no evidence that Medicaid coverage makes use of the physician's office and use of the ED more substitutable for one another," the authors conclude. "If anything, the results suggest that it makes them complementary."

The authors speculate that one explanation for this is that individuals who now seek more healthcare after enrolling in Medicaid will do so across multiple settings, rather than just primary care. It is also possible that primary care use contributes to use of ED care if, for example, a primary care physician sends a patient to the ED for a condition that would be too difficult or time-consuming to manage at the office compared with what the ED could do.

But other explanations exist as well, Dr Powell suggests.

"When people receive healthcare services, they may uncover actual and potential problems which require investigation and treatment," he said. "Increased contact with the healthcare system through both the emergency room and the outpatient setting may lead to more follow-up healthcare utilization."

Another consideration is that outpatient care may not offer the necessary incentives to shift Medicaid enrollees to use those services instead of the ED, he said. "While people with commercial insurance face strong economic incentives to seek outpatient care, people with Medicaid do not," Dr Powell said. "As people with Medicaid may not be able to afford copayments, copayments are kept far lower for Medicaid plans than they are for commercial health plans. Although low copayments ensure that services are financially accessible, they remove incentives to avoid high-cost services."

He points out that office visits charge a $3 copayment, whereas emergency services have no copayment. Further, emergency services require no advance planning, whereas an office visit requires making an appointment.

"This gives members both a financial and convenience incentive to continue to use the [ED]," Dr Powell explained. "The incentives that patients have for using primary care services are better continuity of care and less time spent in the waiting room." But that promise of better continuity of care may not be tempting enough for new enrollees who lack a strong preexisting relationship with a primary care physician, he added.

The implications of these findings, at least from this single experiment in Oregon, is that EDs should not cut capacity when Medicaid becomes available to more people, Dr Powell pointed out.

"The findings also suggest that primary care physicians may need to work to entice people with Medicaid to visit them instead of the ED, as it is possible that some of the ED needs could have been addressed through office visits," Dr Powell said. "One way that primary care physicians might do this is by offering better convenience by increasing the availability of same-day appointments."

The authors reported no external funding. Several authors have received grant funding from the California HealthCare Foundation, the John D. and Catherine T. MacArthur Foundation, the Robert Wood Johnson Foundation, the Sloan Foundation, and the Smith Richardson Foundation. One coauthor has also received personal fees from Eli Lilly. Dr Powell has disclosed no relevant financial relationships.

N Engl J Med. 2016;376:1505-1507. Article full text

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