ER expenditures for privately insured increased faster than Medicare, Medicaid

Between 1996 and 2015, the number of emergency department (ED) visits per individual paid for by Medicare increased at a greater rate than those paid for by private insurance or Medicaid. The annual increases in per-visit expenditures, however, were greater for private insurance than either of the federal programs.

The study was led by University of North Carolina research fellow Jonathan Yun, MD, and the results were presented at the 2018 AcademyHealth National Health Policy Conference In Washington, D.C.

Using a cross-sectional analysis of more than 655,00 individuals and 122,000 ED visits from the 1996-2015 Medical Expenditure Panel Survey, Yun and his coauthors found annual increases in per-visit ED expenditures were greater for private insurance ($44.65 per year) than Medicare ($15.88 per year), Medicaid ($8.47 per year) and no insurance ($25.31 per year).

The growth in per-visit ED expenditures for injuries and respiratory illness was greater for the privately insured than for Medicare and Medicaid, but the study authors said medical inflation, not variables based on visits or socio-demographics, is the primary driver of why ED expenditures by private insurance rose disproportionately to those of Medicare and Medicaid.

“Private insurance’s weaker bargaining position is at least partly responsible for its greater annual rate of ED expenditure increase,” Yun and his coauthors wrote. “Strengthening the weak bargaining position of private insurance may be one way to decrease future ED expenditure growth.”

On the other hand, the results may show why freestanding EDs—which don’t receive reimbursement from Medicare or Medicaid—have become more widespread. Other studies have shown they’ve been built largely in wealthier areas with a greater percentage of privately insured patients.

The report also noted that while the percentage of ED visits covered by each payer changed after the Affordable Care Act (ACA) came into effect, pre-ACA expenditure trends among private insurance and Medicaid visits “were similar to trends after full-scale ACA implementation in 2014.”