Expanding Medicaid Will Hurt Emergency Departments

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“[P]eople are no longer going to the emergency room and they now have good health care, they’re now getting preventive care.”President Barack Obama, September 24, 2013

Read the counterpoint by Seth Trueger here

The optimism of those emergency physicians who have supported the expansion of Medicaid through the Affordable Care Act is built on the assumption that ‘some pay’ is better than ‘no pay’. And, of course, if it were that simple, they would be correct. But I would humbly submit that we need to take the problem apart a little more to see the details before drawing such conclusions.


When the ACA was proposed in Congress, the promise was that having insurance of any kind, either mandated private insurance or government provided Medicaid, would allow more patients to go to their family doctor and ignore the ED. And to the extent that some patients who have availed themselves of that service, hospitalizations and unneeded ED visits have been avoided. But the legislators failed to recognize the primary reason anyone, insured or otherwise, goes to the ED – to get care in a time frame acceptable to them. And with fewer primary care providers accepting Medicaid, office visits are simply not available in the time frame sick or injured people generally have. We are the medical home for everyone after office hours and for everyone when the office schedule is full. So if you can get into a primary care office with your Medicaid card then you are likely to stay out of the ED. But if you don’t choose to wait for an office appointment or can’t get one, then you will still go to the ED. And that’s what happened in Oregon where newly insured patients (through an expanded Medicaid program) visited the ED 40% more than their uninsured comparison group.

This study was particularly important because when Massachusetts instituted mandatory private insurance they also experienced a spike in ED visits. But the spike was actually lower than the increase seen in surrounding states without mandatory private insurance, which was presumably due to the natural expansion of ED demand for timely medical care. And this is where, I believe, supporters of the ACA have seen the same facts, but drawn the wrong conclusions.

The first assumption is that uninsured patients don’t pay anything (i.e. ‘no pay’). As Dr. Trueger correctly notes, the uninsured category is not a homogeneous group. There is a subset of uninsured – particularly newly uninsured or the young uninsured – who are not ‘dead beats’, who will pay a portion of their bills given time. So the basic ‘no pay’ assumption is incorrect. In fact, as Renee Hsia, MD, noted in her landmark study published in the Annals in 2007, uninsured patients actually paid a larger percentage of their ED bills than was paid by Medicaid. Although Dr. Hsia’s study did not address subspecialty availability, I suspect that it would have had similar results. Patients who were required to have money to see a specialist, and who really needed it, begged, borrowed, or saved the money to get the care they desired. Dr. Hsia’s study alone debunks the basic assumption that a simple expansion of Medicaid will improve EM reimbursement. But I believe that there is even more to the story.


We all know the chronically uninsured patient. He comes to the ED knowing, even telling you, that he came because he had no money for a private doctor. He’s also not on Medicaid, even though he might qualify. Why should he? He won’t pay either way. Why should he waste his time. He will ignore the bills if they can find him. Expansion of Medicaid will have no impact on him. Even getting temporary coverage in the ED, as some departments provide, has to have follow up by the patient. And this has very low compliance without a substantial costly bureaucracy chasing the patient down.

The other subset are the recently uninsured or working poor or young patients who didn’t think it necessary to have insurance. This is the group who used to pay part of their bills over time, but now will have Medicaid. And this, I believe, is the group that has chosen to come to the ED with more frequency now that they are “insured”. The impact on their bottom line is better, no doubt. But if the Hsia’s study is still true in 2014, it will not be better for those who treat them. The combined effect is that the percentage of patients who are chronically uninsured stays roughly the same and they will continue to come to the ED with roughly the same frequency. The newly uninsured or underinsured, however, shift to paying a lower percent of their bills and show up in higher frequency. This requires increased staffing and support that is not likely to be offset with the modest increase in compensation. Even worse, since many EDs actually lose money on a per capita basis treating Medicaid patients, treating a larger number will only mean larger losses that must be covered by cost shifting to insured patients.

And that is where, I think, the Massachusetts experience might be instructive. Newly insured patients will only avail themselves of medical care in higher numbers if there is a real financial incentive, such as a low or no co-pay and/or low deductibles. Free Medicaid is just such an incentive. Your old insurance (you know, the policy you were promised you could keep) if it was provided by an employer probably had a low co-pay and low deductibles. But the new policies with expanded coverages, in order to keep premiums within reach, have huge deductibles, some upward of $10,000. The effect of that is that the previously insured patients who now have new policies will likely behave like self pay and avoid medical care, especially expensive emergency care, whenever possible.

The bottom line is that medical reimbursement is all about payor mix. Like insurance companies who are threatened with a ‘death spiral’ if their payor mix is too heavily weighted with older, sicker patients, EDs will be threatened by the new shift in payor mix. Previously uninsured patients will shift into Medicaid and use the ED more, while better insured patients will become ‘pseudo self pay’ due to high deductibles and start to decline their discretionary use of the ED. The effect will be a double whammy, more patients who pay less and fewer patients who would have paid more. And that math just doesn’t work.



FOUNDER/EXECUTIVE EDITOR Dr. Plaster has been an emergency physician for more than 30 years, working exclusively night shifts for the past 20 years in emergency departments across the country. During that period, he joined the U.S. Navy and served two tours in Iraq. Dr. Plaster is the founder and executive editor of Emergency Physicians Monthly and the founder of Plaster Publishing.

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