Changes in hospital service demand, cost, and patient illness severity following health reform

The Effect of Large-scale Health Coverage Expansions in Wealthy Nations on Society-Wide Healthcare Utilization

Most analysts project that a reform like Medicare-for-All that lowers financial barriers to care would cause a surge in the utilization of services, raising costs despite stable or even reduced prices. However, the finite supply of physicians and hospital beds could constrain such utilization increases. We reviewed the effects of 13 universal coverage expansions in capitalist nations on physician and hospital utilization, beginning with New Zealand's 1938 Social Security Act up through the 2010 Affordable Care Act in the USA. Almost all coverage expansions had either a small (i.e., < 10%) or no effect on society-wide utilization. However, coverage expansions often redistributed care-increasing use among newly covered groups while producing small, offsetting reductions among those already covered. We conclude that in wealthy nations, large-scale coverage expansions need not cause overall utilization to surge if provider supply is controlled. However, such reforms could redirect care towards patients who most need it.

Changes in hospital service demand, cost, and patient illness severity following health reform

OBJECTIVE

To estimate the effects of the health insurance exchange and Medicaid coverage expansions on hospital inpatient and emergency department (ED) utilization rates, cost, and patient illness severity, and also to test the association between changes in outcomes and the size of the uninsured population eligible for coverage in states.

DATA SOURCES

Healthcare Cost and Utilization Project State Inpatient and Emergency Department Databases, 2011-2015, Nielsen Demographic Data, and the American Community Survey.

STUDY DESIGN

Retrospective study using fixed-effects regression to estimate the effects in expansion and nonexpansion states by age/sex demographic groups.

FINDINGS

In Medicaid expansion states, rates of uninsured inpatient discharges and ED visits fell sharply in many demographic groups. For example, uninsured inpatient discharge rates across groups, except young females, decreased by ≥39 percent per capita on average in expansion states. In nonexpansion states, uninsured utilization rates remained unchanged or increased slightly (0-9.2 percent). Changes in all-payer and private insurance rates were more muted. Changes in inpatient costs per discharge were negative, and all-payer inpatient costs per discharge declined <6 percent in most age/sex groups. The size of the uninsured population eligible for coverage was strongly associated with changes in outcomes. For example, among males aged 35-54 years in expansion states, there was a 0.793 percent decrease in the uninsured discharge rate per unit increase in the coverage expansion ratio (the ratio of the size of the population eligible for coverage to the size of the previously covered population within an age/sex/payer/geographic group).

CONCLUSIONS

Significant shifts in cost per discharge and patient severity were consistent with selective take-up of insurance. The "treatment intensity" of expansions may be useful for anticipating future effects.