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Study indicates Medicaid expansion may result in more ED use

Friday January 3, 2014
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Adults covered by Medicaid use EDs 40% more often than people in similar circumstances who do not have health insurance, according to a study.

Researchers focused on Oregon’s recent use of a lottery to assign access to Medicaid to certain uninsured adults. They examined ED records for roughly 25,000 people over 18 months.

With the implementation of the Affordable Care Act, Medicaid is expanding in many states to cover a population similar to the one that gained Medicaid coverage through Oregon’s lottery.

“When you cover the uninsured, emergency room use goes up by a large magnitude,” Amy Finkelstein, professor of economics at MIT, said in a news release. Finkelstein is a principal investigator of the study, along with Katherine Baicker, a professor at the Harvard School of Public Health.

The study, published Jan. 2 on the website of the journal Science, also documents that having Medicaid consistently increases ED visits across a range of demographic groups, types of visits and medical conditions, including types of conditions that may be most readily treatable in primary care settings.

“In no case were we able to find any subpopulations, or types of conditions, for which Medicaid caused a significant decrease in emergency department visits,” Finkelstein said in the news release. “Although one always needs to be careful generalizing to other [geographic] settings, these results suggest that other Medicaid expansions are unlikely to decrease emergency room use.”

On one level, the results accord with a traditional economics framework suggesting that insurance, by lowering out-of-pocket costs, would increase the use of medical care. “If we’ve lowered the price of the emergency department, we would expect people to use it more,” Finkelstein said.

However, Medicaid also lowers the out-of-pocket costs of other types of healthcare, such as primary-care visits. Some analysts have suggested that expanding Medicaid could reduce ED visits by the formerly uninsured, bringing them into more regular contact with primary-care physicians and clinics for preventive care. Such a trend would theoretically reduce overall system costs.

Prior work by Finkelstein, Baicker and others on Oregon’s lottery applicants showed that people who obtain Medicaid coverage increase their use of primary and preventive care. But the net effect of Medicaid in the study was to also increase use of emergency services.

Study background

In 2008, Oregon officials realized they had Medicaid funds for about 10,000 additional low-income adults. They developed a lottery for those slots and received applications from about 90,000 state residents.

For academic researchers, the lottery system presented the opportunity for a randomized controlled evaluation of Medicaid by creating a group of residents who obtained Medicaid coverage and otherwise were similar, on aggregate, to applicants who continued to lack coverage.

“We are the very first to have a randomized controlled trial of the effect of covering the uninsured with Medicaid,” Finkelstein said.

Study abstract: www.sciencemag.org/content/early/2014/01/02/science.1246183.abstract


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