New research from the United States suggests that we can expect increased consumption of medical services as a result of healthcare reform, because privately owned hospitals are more willing to care for insured patients than for uninsured patients.
Over one-quarter of nonelderly adults in the United States lacked health insurance during at some point in 2007. A large body of research documents a strong association between insurance status and particular patterns of health care utilization. The uninsured are less likely to consume preventative care such as diagnostic exams and routine checkups. They are more likely to be hospitalized for conditions that – if treated promptly – do not require hospitalization. ….
But would the uninsured behave differently if they had health insurance?
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Most studies cannot determine whether the large differences in healthcare utilization between the insured and the uninsured are due to insurance status or to other unobserved differences between the two groups. In this paper, we exploit a sharp change in insurance coverage rates that results from young adults “aging out” of their parents’ insurance plans to estimate the effect of insurance coverage on the utilization of emergency department (ED) and inpatient services. Using the National Health Interview Survey (NHIS) and a census of emergency department records and hospital discharge records from seven states, we find that aging out results in an abrupt 5 to 8 percentage point reduction in the probability of having health insurance. We find that not having insurance leads to a 40 percent reduction in ED visits and a 61 percent reduction in inpatient hospital admissions. The drop in ED visits and inpatient admissions is due entirely to reductions in the care provided by privately owned hospitals, with particularly large reductions at for profit hospitals. The results imply that expanding health insurance coverage would result in a substantial increase in care provided to currently uninsured individuals.
Michael Anderson, Carlos Dobkin and Tal Gross, “The Effect of Health Insurance Coverage on the Use of Medical Services”, NBER Working Paper 15823, 20 February 2010.
An ungated version of the paper can be downloaded here.
I was surprised to see that loss of insurance decreases visits to hospital emergency rooms. Conventional wisdom is that emergency rooms are the medical services of choice for the uninsured. Larger – and related – questions are “What is the effect of insurance on visits to a doctor’s office or clinic?” and “What is the effect of insurance on health status (outcomes)?” The researchers ignore both questions, but NHIS data displayed in appendix 10 reveal no discontinuity by age in reported visits to “a doctor or other health care professional at a doctor’s office, a clinic, an emergency room, or some other place”. This suggests that the uninsured might be substituting visits to doctor’s offices and clinics for more expensive visits to hospitals. More analysis is needed. This is not a definitive study of the effect of insurance on the use of medical services, but it raises interesting questions and could stimulate further research.
