Concerns that Medicaid expansion could put pressure on budgets because of greater use of emergency department services may be put to rest, if California’s experience is reflected in other states.
That state’s Medicaid program saw an initial spike in usage of hospital inpatient and emergency department services; however, there was a “significant decline” in the use of these services the year after following expansion, according to the UCLA Center for Health Policy Research.
However, part of that may be tied to how California prepared for expansion, as authors notes that the research findings “suggest that early and significant investments in infrastructure and in improving the process of care delivery can effectively address some pent-up demand for health care services of previously uninsured populations. Lead author Nigel Lo, a research analyst at the center, and his colleagues note that in California, there was a Low-Income Health Program (LIHP) that served as a bridge to the state’s Medicaid expansion under the Affordable Care Act.
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Pent-up demand may be partially to blame for last year's high Medicaid costs, Mr. Lo suggested.
As the state planned to expand Medicaid services, the authors noted concern in California, not unlike elsewhere in the nation, newly eligible Medicaid enrollees “are expected to have a significant level of unmet need (pent-up demand) and disproportionately higher rates of costly emergency room visits and hospitalizations.”
But over time, those with the highest demand (defined as individuals who had previously not used county services prior to enrolling in LIHP) ultimately had usage on par with those who had the lowest demand.
High-demand LIHP enrollees in the first quarter of the program in July 2011 had 600 emergency room visits per 1,000 enrollees. By April 2013, visits dropped dramatically to 183 visits per 1,000 enrollees, a number that was relatively flat during the second full year enrolled in the LIHP program. By comparison, those with the lowest demand had 148 visits per 1,000 enrollees in July 2011 and 140 visits per 1,000 enrollees in April 2013. Hospitalization rates mirrored emergency room visits during this same period, while outpatient services were constant among all groups looked at.
In an interview, Mr. Lo said that the findings should address fears of runaway utilization. “We definitely didn’t see that,” he said. “The fact that there was no runaway utilization, I think, is really important because it implies that once they get into the system, [costs and utilization] become very predictable.”
Authors conclude that the findings have two significant implications for California and the nation.
“First, although newly eligible Medicaid enrollees have pent-up demand for care, this demand appears to decline rapidly after the first year of enrollment and becomes comparable to the demand with those with previous comprehensive coverage. Second, for the populations who were ‘pre-enrolled’ in coverage programs prior to Medicaid expansion in January 2014, much of the pent-up demand for expensive emergency room and hospital care has already been met.”
When looked at as a whole, the findings suggest that “the higher costs and utilization among newly enrolled Medicaid beneficiaries is a temporary rather than permanent phenomenon.”