Introduction and background

In the United States (U.S.), Medicaid is a public health insurance program that covers roughly 70 million low-income and financially needy Americans. Since the early 1990s state governments, which administer Medicaid, have increasingly turned to “managed care” as a way to structure Medicaid insurance and provide for the delivery of health services. Managed care also appears in other publicly funded health insurance programs in the US like Medicare Advantage and private delivery of subsidized coverage through the marketplace. Nationwide, the percentage of Medicaid recipients enrolled in some form of managed care has increased more than seven-fold since 1990, up from 11% in 1991 to 82% in 2017 [1, 2]. Yet little is known about whether and how this major change in the structure of Medicaid affects recipients’ use of hospital emergency departments (EDs). This paper examines this issue.

Managed care within Medicaid encompasses a broad array of contract arrangements between state Medicaid programs and private companies. All forms of Medicaid managed care share in common insurance rules for accessing care and the actual provision of health services are more integrated than under conventional fee-for-service (FFS) Medicaid [3]. The most prevalent forms of Medicaid managed care are Medicaid health maintenance organizations (HMOs); the other two forms of Medicaid managed care are primary care case management (PCCM) and limited-benefits plans [4]. Medicaid HMOs, typically, are private-sector HMOs that contract with Medicaid to provide the delivery of health services to Medicaid recipients in exchange for a fixed fee per recipient per month (capitation). These HMOs link each Medicaid enrollee with a primary care physician (PCP) who serves as a care coordinator and gatekeeper for the enrollee’s access to services. Because a Medicaid HMO is paid via capitation, it should have incentives to structure its payments to providers and its rules for PCPs and enrollees so that health services are delivered cost-effectively with PCP oversight and continuity of care.

States pay HMOs’ capitation fees rather than act themselves as health insurers for Medicaid. States have turned to managed care for several reasons, including: (1) achieving greater control and predictability over their spending on Medicaid, (2) improving accountability for program performance, access to services, and care quality, and (3) improving care coordination, reducing duplicate and/or unnecessary services, and promoting greater efficiency in care provision [3]. Unlike FFS Medicaid, paying for care through capitation might also deter physicians and hospitals from possibly oversupplying services of questionable benefit as a way of enhancing revenue [5].

Several countries with national healthcare systems have also introduced various forms of managed care in their programs, including the United Kingdom, the Netherlands, Germany, Switzerland, Israel, Estonia, Latvia, and Lithuania [5–9]. Outside the U.S., however, managed care models are often described using different terminology, including “integrated care,” “shared care,” “transmural care,” and “comprehensive care” [10].

Ideally, managed care plans aim to reduce costs, provide preventive services and discourage the overutilization of healthcare resources via care provided by the PCP or the gatekeeper. Thus, it is reasonable to expect that Medicaid recipients in managed care plans might have fewer ED visits, and have a lower prevalence of ED visits which might have been “potentially preventable,” compared to recipients with conventional Medicaid. Estimates suggest that around 13% to 27% of ED visits in the United States could instead have been managed and taken care of in physician offices, clinics and urgent care centers [11]. These potentially preventable ED visits are associated with ambulatory care sensitive conditions (ACSCs) and are considered to be an indicator of health care quality [12, 13]. Although ED use for ACSCs is not the only measure of assessing health care quality, it is an important measure of quality particularly when preventable. As such, it is important to assess whether managed care within Medicaid, given its gatekeeper structure, is capable of better controlling preventable ED utilization as compared to conventional Medicaid.

In this study, we use nationally representative data on Medicaid recipients to examine the association between type of Medicaid coverage and recipient visits to the ED. We address the following question: Do Medicaid recipients in managed care plans use ED services differently than recipients in conventional fee-for-service (FFS) Medicaid, and if so, in what ways? Comparing FFS and HMO recipients within Medicaid is complicated by the fact that there are two distinct subpopulations that tend to differ dramatically in terms of their demographics and medical needs. The first, includes recipients whose only source of health insurance is Medicaid, the other, encompasses recipients who are eligible for both Medicare and Medicaid (called “dual eligibles” or “duals”). Compared to recipients with Medicaid only (called “non-duals”), duals typically have greater and more complex healthcare needs, including more mental and physical disabilities and multiple chronic conditions, and although duals comprise just 15% of all Medicaid enrollees, they account for 32% of all Medicaid spending [14–16]. Because of their very different health needs, these two groups may use the hospital ED differently. To address this issue, we conduct separate analyses of the effects of Medicaid HMOs for each group, i.e., one analysis for duals, another analysis for non-duals.

There is some limited evidence that managed care plans within Medicaid, especially Health Maintenance Organizations (HMOs), are associated with a decrease in ED utilization [17–22]. However, two more recent studies found that Medicaid managed care market penetration is associated with an increase in ER use [23, 24]. A recent study by Hu and colleagues assessed the impact of mandatory Medicaid managed care implementation in Florida on preventable ED visits but its focus was on racial/ethnic disparities in such visits [25]. They found that making managed care mandatory for Medicaid recipients slowed the growth of preventable ED visits for minorities relative to whites. No studies, to our knowledge, have used nationally representative data to examine whether and how a recipient’s type of Medicaid coverage, e.g., whether managed care or conventional Medicaid, affects their preventable ED utilization. This study does so, and examines the occurrence of potentially preventable ED visits.

Our paper contributes to the literature in three ways. First, instead of focusing on a single or a few states, we analyze nationally representative data from the Medical Expenditure Panel Survey (MEPS) spanning 2003–2015 on all nonelderly U.S. adults with Medicaid. Over this period, the percentage of Medicaid recipients under some form of managed care grew from around 58% to 75% [26, 27]. Second, since there is potential for managed care to enroll healthier patients and discourage participation of high utilizers, we explicitly address the possibility of selection bias into Medicaid HMOs by using propensity score weighting. Third, and most importantly, we pay close attention to potential differences by dual-eligibility status, and as such we stratify our analyses to examine whether the effects of Medicaid managed care plans differ between dual eligibles and non-duals. Whether there are differential effects of Medicaid managed care on ED use based on dual vs. non-dual status has not been studied before. Attending to potential differences is important given the greater health needs and higher healthcare spending among dual eligibles.

Methods

Results

Differences between HMO and FFS recipients

Among non-duals, we found some important differences in characteristics of HMO and FFS Medicaid recipients. As shown in Table 1, we found statistically significant differences in region, income, self-reported physical health, BMI, access to usual source of care, almost all the preventive care services utilization, attitudes towards insurance and risk variables, and some clinical conditions (asthma and high blood pressure). Among duals the characteristics of HMO and FFS Medicaid recipients were statistically different for use of cholesterol check only.

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Table 1. Characteristics of the medicaid population with preventable Emergency Department (ED) admission ages 18–64 by dual-eligibility^a and Medicaid HMO^b status.

Results are based on aggregated data from the Medical Expenditures Panel Survey^c.

https://doi.org/10.1371/journal.pone.0240603.t001

Medicaid HMO Status and the odds of preventable ED visits

Table 2 (and S2 and S3 Tables) presents our findings regarding the association of Medicaid HMO status and the odds of having preventable ED visits during the year controlling for other covariates. Regardless of our method of estimation, among non-duals we found no relationship between the type of Medicaid held by the recipient, i.e., whether an HMO or conventional FFS, and the occurrence of preventable ED visits during the year, after controlling for other possible determinants of such visits. The same finding emerged in the sample of duals, i.e., the models estimated suggest there is no relationship between the type of Medicaid plan held by the recipient and whether he or she had preventable ED visits. However, among both non-duals and duals, there were some significant predictors of having preventable ED use. For non-duals, males had significantly lower odds of having preventable ED visits, while worse physical health status was associated with significantly higher odds of having preventable ED visits. For duals, individuals who were advised by a doctor to restrict fatty foods had significantly higher odds of having preventable ED visits.

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Table 2. Association between medicaid Health Maintenance Organizations (HMO) coverage and Emergency Department (ED) visits among non-duals and dual eligibles^a, ages 18–64.

Results are based on data from the Medical Expenditures Panel Survey^b.

https://doi.org/10.1371/journal.pone.0240603.t002

Discussion

From this nationally representative sample of Medicaid recipients, ages 18–64, in the U.S. we found that the type of Medicaid held by a recipient, i.e., whether an HMO or FFS coverage, was unrelated to the probability that an ED visit was potentially preventable. This finding emerged among dual eligibles and among non-duals, and it occurred irrespective of the adopted analytical strategy. Dual eligibles were more likely to have potentially preventable ED visits than non-duals, however, within each of these Medicaid subpopulations, there were no differences in the odds of experiencing potentially preventable ED use based on Medicaid HMO enrollment. This suggests that Medicaid HMO and FFS enrollees are indistinguishable in terms of their potentially preventable use of EDs.

Previous studies have found mixed evidence regarding the effect of Medicaid managed care on overall ED use [17–24]. This is somewhat surprising given that HMO enrollees (among both duals and non-duals) more often report having a usual source of care (see Table 1), and other studies have shown that, at least in more general populations (not specific to Medicaid recipients), having a usual source of care is associated with having fewer ED visits, including non-emergent visits [46, 47]. One possible explanation for why we did not find any effects for HMOs is that all of our models also controlled for whether the recipient reported having a usual source of care, and that variable might have picked up some of the effects of being in an HMO. To assess whether this is what happened we re-estimated all of our models, this time excluding the variable that measures having a usual source of care. Our findings remained unchanged, i.e., being in a Medicaid HMO still had no effects on potentially preventable ED utilization. Another possibility is that we failed to find effects of HMOs because we ran separate analyses for duals and non-duals, rather than pooling them together, as most previous studies have done. (Recall, duals have higher rates of ED use but are less likely to have Medicaid HMO coverage). To assess the validity of this explanation, we re-estimated all of our models, this time pooling duals and non-duals together. For these models too our findings remained unchanged.

In the case of ED visits for ACSCs, we found no differences between Medicaid HMO and FFS Medicaid recipients. Previous work suggests that such visits may not necessarily be a result of poor judgement on the part of patients, but instead may indicate that they have poor access to quality primary patient centered and continuous care [48, 49]. For example, it is not uncommon for office staff in primary care practices and clinics to advise Medicaid patients who call in seeking treatment for a minor problem to go to the ED instead [49]. This may be happening because there is simply more demand for primary care services than the U.S. healthcare system can handle due to the continuing shortage of PCPs and PCP-extenders in the U.S. [50], or because Medicaid fee levels for office visits tend to be so much lower than those from other insurers [51]. If so, it is not clear that Medicaid HMOs can fix these underlying problems.

Our findings raise important considerations for state policymakers regarding their growing preference for Medicaid HMOs within Medicaid. There is some evidence that enrollment in Medicaid managed care (including Medicaid HMOs) results in increased healthcare costs and spending for Medicaid recipients and for state Medicaid programs [52, 53]. Additionally, in most states Medicaid HMOs have been documented as having higher overhead than FFS Medicaid, so it is less expensive to administer FFS Medicaid [54].

One of the arguments for Medicaid HMOs has been that the private sector can improve access to care and the quality of care provided to recipients. In line with previous work, as noted earlier, we found that Medicaid recipients in the HMOs were indeed more likely to report having a usual source of care (Table 1), a key indicator of better access to care. Yet, their likelihood of receiving some preventive services was no better than among recipients in FFS Medicaid. Compared to their FFS counterparts, HMO enrollees, surprisingly, had similar rates of flu vaccinations and were less likely to report receiving an annual cholesterol check, or a routine check-up by a physician (Table 1). Thus, at least in terms of these preventive services, there is scant evidence from out data that Medicaid HMOs are providing higher quality care.

Still, states may favor adopting Medicaid HMOs for other reasons. Capitation makes Medicaid spending more predictable. This is critical for policymakers and administrators who often operate within uncompromising political environments and work within strict budgetary constraints. Additionally, contracting with the plans reduces the state’s own administrative burden of Medicaid, even if quality gains are not exceptional or sufficiently realized through such arrangements.

Our paper has shown that potentially preventable ED use is no different under these two models

for Medicaid. Our findings provide an added perspective for assessing and comparing care quality between Medicaid HMOs and Medicaid FFS. However, we believe that more research is needed to more thoroughly evaluate the advantages and disadvantages of Medicaid HMOs, so that policymakers can make more informed decisions regarding the best model to adopt on behalf of vulnerable Medicaid recipients. Future work should focus on comparing additional measures of (1) care quality outcomes, (2) health of Medicaid recipients, (3) risk of mortality, (4) satisfaction with care and coverage, and (5) long term costs associated with each model. In addition to stratifying the analysis on the basis of dual-eligibility status, future work can analyze other special needs and high healthcare utilizing populations. Also, since we were only interested in whether individuals had any preventable ED visit in a year, future work can use alternative modeling strategies to explore the association of Medicaid managed care enrollment and the number of such visits in a year.

Conclusions

In summary, this study examined the prevalence of potentially preventable ED use within the Medicaid population, and whether Medicaid HMOs have any impact on their occurrence. Separate analyses were conducted for dually eligible recipients (individuals with both Medicaid and Medicare) and non-duals. Using the MEPS data from 2003–2015, we found that Medicaid HMOs were not associated with either an increase or a decrease in the occurrence of potentially preventable ED use, when compared with conventional FFS Medicaid.

Supporting information