Is Medicaid-Associated Overuse of Emergency Departments Just a Surge?

Research from the UCLA Center for Health Policy Research suggests that rising Medicaid dependency does not result in a secular increase in use of hospitals’ emergency departments. Rather, the jump in ED use is just pent-up demand being satisfied, and drops off. This is the conclusion of a study that examined ED visits by California patients newly enrolled in a government program similar to Medicaid, called the Low Income Health Program (LIHP).

This suggests different consequences to Medicaid expansion than the Oregon Medicaid experiment showed:

Although our results are not directly comparable to those of the Oregon Health Insurance Experiment, they suggest that the higher costs and utilization among newly enrolled Medicaid beneficiaries is a temporary rather than permanent phenomenon. To the extent that California’s experience with the pre-ACA HCCI and LIHP programs is generalizable to other states, policymakers and service providers can expect a reduction in demand for high-cost services after the first year of Medicaid enrollment.

If true, this contradicts the story I’ve been telling, and should make us happy that the new Medicaid dependents will get timely, quality, preventive care that will reduce their need to go to EDs:

“We found that the surge doesn’t last long once people get coverage,” said Nigel Lo, a research analyst at the UCLA Center for Health Policy Research and the study’s lead author. “Our findings suggest that early and significant investments in infrastructure and in improving the process of care delivery can effectively address the pent-up demand for health care services of previously uninsured people. Fears that these new enrollees will overuse health care services are just not true.”

Unfortunately, this conclusion is unconvincing.

In the first three months after enrollment, there were six ED visits for every ten new beneficiaries in the “highest-demand” group. This is the group which was previously uninsured but had not used county indigent services prior to enrolling in the government program. It comprised 37 percent of the newly insured. However, there was no barrier to them using the ED when they had been uninsured: Nine percent of the newly insured had used EDs before getting coverage. (The rest of the newly insured had been on another government program, Health Care Coverage Initiative, which was cancelled.)

What is important to remember about Medicaid and similar programs is that you can sign up when you need care. People with private insurance can sign up only during open-enrolment periods.

Sure, the people who sign up for Medicaid will consume a lot of medical care and then dial it back. But they will also drop out of Medicaid until they need it again. Meanwhile eligible people who become sick will sign up next quarter. It never stops.

And it certainly does not address the problem that Medicaid provides poor access to physicians. If it did, the newly covered would not have had to flood hospitals’ emergency departments.

 

 

John R. Graham is a Senior Fellow at the Independent Institute.
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