Results mixed in coverage expansion test

Mixed results in coverage expansion experimentPhoto used with permission from

Adding more varied evidence to the Medicaid expansion debate, health researchers found that extending coverage to low-income, childless adults in Wisconsin corresponded with a decrease in preventable hospitalizations -- but also increases in outpatient and emergency department visits.

In 2009, Wisconsin created a new public insurance program for childless adults earning up to 200 percent of the federal poverty level, called the BadgerCare Plus Core Plan. Compared to Medicaid, it has a somewhat limited benefit package: no vision, home health, nursing or hospice services; limited visits for physical, occupational, speech and cardiac rehabilitation; only emergency dental service; and only outpatient mental health services provided by a psychiatrist.

In early 2009, the state automatically enrolled 12,941 childless adult residents from Milwaukee County. That offered a “natural experiment” largely “free of selection bias” for a team of researchers led by University of Wisconsin economist Thomas DeLeire, who published the findings in Health Affairs.

They studied administrative claims data from a group of 9,619 residents automatically enrolled in the BadgerCare Plus Core Plan in January 2009, and found outpatient visits for the group increased by 29 percent and emergency department (ED) visits increased 46 percent.

Inpatient hospitalizations, though, declined by 59 percent and preventable hospitalizations fell by 48 percent, they found.

DeLeire and colleagues said their findings jibe with other research showing a link between public insurance enrollment and increases in non-hospital care use, and they also offer a few hypotheses for the increases in emergency visits — which, like hospitalizations, can be costly.

The increase in ED use among the new enrollees in BadgerCare Plus Core suggests that, despite the increases in the outpatient visits, “outpatient care capacity may be inadequate.” Another reason could be that Medicaid coverage can’t always “avert ED among people who face other barriers, such as lack of transportation or mismatch in available hours for primary care visits,” as a 2012 Annals of Emergency Medicine study also found.

The reduction in hospitalization rates, DeLeire and colleagues surmise, may stem from increased access to outpatient care and improvements to chronic illness management, or from increased access to specialist referrals.

Either way, the observed decline in hospitalizations is “strikingly different from the results of several previous studies, which tended to find that insurance coverage led to increased hospitalizations among young adults and children and among low-income adults.”

The researchers did not examine costs and also cautioned that the administrative claims data for outpatient visits could be somewhat incomplete, leading to an overstating of the increase in outpatient use. But the report said there is the “possibility that a coverage expansion could reduce costs by reducing hospitalizations.”

At the same time, with coverage expansions under Medicaid or through the individual mandate, there is the possibility of “a large increase in the demand for outpatient services,” the researchers wrote. “Unless there is sufficient capacity of outpatient services to meet increased demand, coverage expansions may lead to increases in ED visits and corresponding increases in cost.”

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