Medicaid expansion is not a good idea, and here’s why: It fails to improve the quality of care.
Support for Medicaid expansion often looks like a new op-ed titled “Refusing to expand Medicaid is wrong call.” Although its author highlights the need to focus on the quality of care for specific individuals, he misses the fact that Medicaid expansion has statistically proven to decrease the quality of care. Not only does the quality of care go down, but taxpayer dollars are wasted. This combination would compromise economic prosperity in Texas and fall short of making a significant impact on anyone.
As of 2018, Medicaid currently consists of a population of over 4 million people—and constitutes one of the biggest portions of the Texas state budget. Health care is far from cheap, and in order to sustain this ever-increasing cost, it is imperative to make fundamental changes now.
The data presented by TPPF’s Texas Medicaid Utilization of ER by County outlines state-allocated funds to Medicaid patients in fiscal year 2018. We found that ER spending accounted for more than $1.1 billion of the health services budget. Of this $1.1 billion, $684.3 million was used on non-urgent ER visits. This cost is hefty and can be avoided by encouraging and helping Medicaid beneficiaries transition from unnecessarily racing to the ER to visiting primary care doctors instead.
Texas Medicaid beneficiaries make an average of 5.8 million ER visits annually. The cost of ER visits range dramatically but the average price for an urgent and non-urgent visit respectively is $206.58 and $184.89. Of the 4 million Texas Medicaid beneficiaries, 1.8 million (44%) go to the ER each year. This means that the group of individuals who go to the ER more often tend to visit at an average of 3.3 times annually. Of the 3.3 times, 1.2 (36%) are for urgent visits but 2.1 (64%) are for non-urgent visits. These numbers show that nearly two-thirds of visits are non-urgent and did not require a trip to the ER.
The two main reasons that so many Medicaid beneficiaries rely on ER treatments are because they either perceive their condition to be too severe for a primary care visit or because they simply default to the ER as their usual place of care. Urgent Care (UC) centers exist for most non-urgent visits, but emergency departments fear the accusation of rejecting patients, leading them to at least notify patients of the 30 minutes UC wait time versus the wait times at the ER, which can be three to fourn hours.
When using these numbers to calculate a “wasted” expense (the amount used on non-urgent ER visits) it seems Texas is wasting about $388 per patient who goes to the ER on average per year. We are unable to target specific individuals and it’s impossible to tell if a new Medicaid enrollee is going to fall into the 44% that goes to the ER or the 56% that does not. Yet we can determine an average cost of everyone on Medicaid related to ER expenses; this way we can see how many dollars are expected to be wasted for each new individual that enrolls.
To do this we simply calculate an average cost per Medicaid beneficiary and break it down between urgent and non-urgent visits to see the average amount we can expect to be wasted. This average annual cost spent per Medicaid patient from ER expenses totals $276.30. Of that figure $170.16 is going towards non-urgent ER visits. This means for every single one of the 4 million Medicaid beneficiaries, $170.16 is being wasted. Of course, as we noted earlier, not every specific individual is going to the ER. This number helps us look at one specific individual and say, given the chance that they do go to the ER (44%), they go 3.3 times per year. Of those 3.3 times, 2.1 are non-urgent. Now we can expect that $170.16 is going to be “wasted” on non-urgent ER visits to every specific unique beneficiary. Once again, this is significant since we are unable to distinguish whether one person is going to go to the ER in any given year.
This money that is wasted could be saved and better optimized. It can go to better social programs, or better yet, given back to the taxpayers to allow them to use it in the free market. Releasing the floodgates of Medicaid expansion will ultimately increase the total number of dollars wasted on non-urgent ER visits. Thus, the focus must be on minimizing that number so we can use these dollars to increase economic prosperity in Texas.
See our one-pager here.