Projecting the Use of Inpatient and Emergency Department Services After the Affordable Care Act Medicaid Expansion

Purpose and Background.   Medicaid expansion under the Patient Protection and Affordable Care Act (ACA) will add new enrollees to Medicaid programs in states that elect to expand eligibility. While there is substantial amount of research has been conducted on the expected size and composition of the newly covered Medicaid population under different assumptions, less is known about the use of health care—particularly hospital care—that is likely to occur in this newly insured population. The objective of this study is to provide projections of inpatient hospital and emergency department (ED) use after ACA Medicaid expansion. 

Data and Methods. Hospital Inpatient and ED records were extracted from Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases (SID) for the years 2007–2011and State Emergency Department Databases (SEDD) for the years 2007–2010. Medicaid enrollee characteristics, program factors, and state context variables were collected.  State Medicaid expansion stances were determined. Inpatient discharge records were aggregated by the state of the patient’s residence, year, and major service line including Medicine, Surgery, Maternity & Newborn, Injuries and Mental Health. Data were restricted to adults aged 19–64 years who reported a primary expected payment source of Medicaid, because this age group is likely to contribute the vast majority of new Medicaid enrollees. Hospital utilization metrics were total discharges, preventable admissions, and emergency department visits. Discharge and ED visit rates were estimated using the state- and year-specific Medicaid enrollment estimates.  The enrollment estimates were based on the Centers for Medicare & Medicaid Services (CMS) Medicaid statistics and information from the American Community Surveys for 2007–2011. ED visit records were summarized in a similar fashion for 2007–2010.  Data for Medicaid patients were aggregated by state, year, and type of service. The sole utilization metric for the ED encounters was visit volume, and visit rates were computed using the same Medicaid enrollment estimates employed for inpatient discharge volumes. This was a retrospective observational study measuring inpatient discharges, and ED visits. Regression models estimated utilization measures from predictor variables. Our models incorporate population characteristics and state context factors that may be influenced by policy.

 Principal Findings. Our models project that change in population composition alone results in a 22% increase in inpatient discharges and a 30% increase in ED visits, while use rates fall 6% and 0%, respectively.  With the additional capacity, reimbursement, and innovation policy effects in place, inpatient discharges increase by 7% and ED visits by only 1%, while use rates fall 18% and 22%.  Among the policy effects, increases in primary care physicians’ acceptance rates of Medicaid patients appears to have a greater impact on hospital use than increases in capacity (physician and bed supply) or delivery system innovation (Medicaid managed care penetration). 

 Conclusions. Medicaid expansion will increase inpatient and ED volumes, but utilization rates will be below current levels.  States can limit increases through provider capacity, Medicaid managed care, and increasing physician acceptance of Medicaid patients.