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The effect of the Massachusetts reform on health care utilization.

The 2006 Massachusetts health care reform expanded insurance coverage in the state to near-universal levels. As the uninsured gained coverage, their out-of-pocket costs of medical care fell, inducing them to seek more care. This paper analyzes the effect of the reform on reported health care utilization and outcomes by both synthesizing the existing research on the Massachusetts health care reform and providing new evidence using the National Health Interview Survey. The results show evidence that the Massachusetts reform increased residents' use of health care services including primary and preventive care, reduced reliance on the hospital emergency room as a usual source of care, and improved self-reported health.

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In 2006, Massachusetts enacted a major health care reform bill aimed at achieving universal health insurance coverage within the state. The law used a three-pronged approach to expand health insurance coverage: it mandated that residents have health insurance coverage or pay a non-compliance fee, it expanded subsidies to low-income families to make health insurance affordable, and it improved the market for nongroup insurance through a series of reforms. In many ways, the Massachusetts reform also served as the basis for the Affordable Care Act (ACA), the federal health care reform legislation that followed in 2010.

This three-pronged approach was successful in substantially increasing health insurance coverage in the state. Prior to the reform, about 12.5% of adults ages 18 to 64 were uninsured. According to the Massachusetts Health Reform Survey, that number fell to 4.8% by 2009, a reduction in the uninsurance rate of over 60% (Long, Stockley, and Dahlen 2012). Other surveys have found comparable insurance rates in Massachusetts after the reform. For example, the National Health Interview Survey (NHIS) puts the Massachusetts uninsurance rate at 3.9%, the Current Population Survey estimates a 4.5% uninsurance rate, and the American Community Survey puts that figure at 4.4%. (1) All three surveys rank Massachusetts first in the nation for insurance coverage. The reform was broad and affected the insurance status of all races, genders, and age groups, including children and the elderly (Kolstad and Kowalski 2012).

The provision of coverage to the uninsured lowers their out-of-pocket costs of medical care and encourages them to use more health services, increasing the total amount of resources in the economy devoted to providing health care. One hope of the proponents of health reform is that this increase in utilization will lead to more appropriate care, better health outcomes, and fewer medical emergencies in the future, ultimately lowering costs over the long term. For example, the 1986 Emergency Medical Treatment and Active Labor Act (EMTALA, which prohibits hospitals from denying patients emergency care based on their ability to pay), potentially induces the uninsured to use the emergency room for conditions that can be treated in a physician's office simply because they cannot be turned away. Expanding insurance coverage may therefore lead the newly insured to seek care in more appropriate venues. However, while other studies have examined how insurance coverage affects health and utilization in certain groups (e.g., the elderly or children), until recently there was little evidence on how health insurance coverage changes utilization patterns among the general uninsured population. Because it affected the coverage of almost all uninsured residents, the legislation in Massachusetts presents an excellent opportunity to investigate the interwoven relationships among insurance coverage, health care utilization, emergency room care, preventable health problems, and, ultimately, the health of those affected by the reform.

In this paper, I review the evidence on the impact of the Massachusetts reform on the health and use of health services of those affected. Several studies have found that the reform increased the use of primary care and preventive services, such as office visits, checkups, and flu shots (Miller 2012b; Long, Stockley, and Dahlen 2012; Kolstad and Kowalski 2012). As a result, preventable hospitalizations fell modestly (Kolstad and Kowalski 2012). Furthermore, the reform reduced reliance on hospital emergency room care, particularly for visits classified as non-urgent or primary care treatable (Miller 2012a). The reform also resulted in Massachusetts residents reporting that they were in better health (Courtemanche and Zapata 2012; Miller 2012b). There is no evidence, however, of a reduction in total hospital discharges (Kolstad and Kowalski 2012), although it is possible that better health and more preventive care will eventually reduce hospitalizations over a longer time horizon.

Using data from the National Health Interview Survey, I present additional evidence on the effect of the reform on health service use by comparing changes in utilization among Massachusetts residents before and after the reform with changes in other states in the region over the same time period, a technique called "difference-in-differences." (2) Consistent with other studies, I find evidence that the reform increased the use of primary and preventive services. In particular, I find significant increases in office visits and flu shots. I also find that the reform reduced reliance on hospital emergency rooms as a usual source of medical care among survey respondents. Finally, I find that the reform significantly improved self-reported health.

What Did We Know Before Massachusetts?

One hope of the reform's proponents was that providing insurance coverage to the uninsured would not only improve their health and well-being, but also reduce their total medical costs over time by preventing medical problems before they occur and by encouraging more appropriate use of the health care system. Although prevention of expensive medical emergencies is a worthy goal, a large and growing literature has established that the expansion of insurance coverage usually increases, rather than decreases, health care utilization and the total cost of medical services used.

The RAND Health Insurance Experiment (RHIE) is perhaps the most widely cited study of the relationship between the generosity of health insurance coverage and the use of health services. Between 1971 and 1980, the RAND Corporation recruited 2,750 families to participate in a study of the effects of patient cost-sharing on the utilization of health services. These families were randomized into one of five types of health insurance plans that varied in generosity from free care to 95% coinsurance. Results from the study presented in Newhouse (1993) show that more generous health insurance coverage increases health care utilization: families that received free care made more doctor's visits annually and had approximately 20% more hospitalizations than those with coinsurance. The only gains in health resulting from more extensive use of the health care system were found among the very poorest and sickest participants. For over 90% of participants, the increase in utilization resulting from being randomized into a lower cost-sharing policy had no measurable effect on health outcomes.

Without a randomized controlled study such as the RAND experiment, it is difficult to assess the relationship between insurance status and health care utilization. Those who choose to purchase health insurance may differ in important ways from those who do not. The insured may have a greater aversion to risk, higher socioeconomic status, or more education, leading them to use health care differently than the uninsured even if they lose their insurance coverage. A simple comparison of the health and utilization patterns of the insured relative to the uninsured may not account for these (often unobserved) underlying differences.

To overcome the nonrandom selection into insurance coverage, several studies have used changes in public policy or random variation in access to insurance coverage as "natural experiments" to evaluate the relationship between insurance coverage and utilization. These studies also found that insurance leads patients to use more health care. Currie and Gruber (1996) evaluated the expansion of the Medicaid program to low-income children. The authors found that this expansion increased the use of medical care and decreased child mortality. Card, Dobkin, and Maestas (2007) showed that gaining insurance coverage through Medicare at age 65 increases hospitalizations, particularly for elective procedures. Anderson, Dobkin, and Gross (2012) found that as children "age out" of their parents' coverage at age 18 they use fewer medical services.

The empirical evidence on the ability of insurance coverage to lead patients to choose more appropriate care or prevent medical problems before they occur is mixed. Dafny and Gruber (2005) observed that the expansion of Medicaid coverage to children during the 1990s increased utilization of the hospital for non-preventable medical conditions, but did not increase utilization for preventable conditions. Kaestner and LoSasso (2012) found that increased contact with medical professionals, rather than preventing hospitalizations, actually encourages patients to use the hospital more, particularly for hospital visits over which physicians have some discretion. Early evidence from the Oregon Health Insurance Experiment (Finkelstein et al. 2012) has shown that those who gained Medicaid coverage through a lottery used more preventive services but had the same rates of hospitalization as those who did not gain coverage through the lottery.

While previous studies have shed light on certain aspects of the relationship between the demand for health services and insurance coverage, analysis of the Massachusetts reform provides many important insights for several reasons. First, studies that use quasi-experimental methods focus on certain subgroups of the uninsured population: either the elderly, the poor, or children and teenagers. These special groups may respond differently to insurance coverage than the general population. The Massachusetts experience, in contrast, is the first instance of a reform that expanded coverage to almost the entire uninsured population. Second, the Massachusetts reform is relatively recent and may be more relevant for understanding the current relationship between health insurance coverage and utilization, in contrast to the RHIE, that is now over three decades old. Because many policies were introduced only after the RHIE was completed, including the EMTALA, evidence from the Massachusetts reform provides a critical update to these classic results. Finally, because the Affordable Care Act so closely mirrors the Massachusetts reform, learning about the experience in Massachusetts is important to evaluate how the upcoming implementation of the federal health care reform will affect demand for health services.

What Have We Learned So Far from the Massachusetts Experience?

With the implementation of the 2006 health care reform, more than 400,000 adults in Massachusetts gained health insurance coverage and were able to use health services at a reduced out-of-pocket cost. In this section, I review the evidence on how this expansion of coverage affected the use of health services in the state.

Primary and Preventive Care

Following the reform, routine office-based care, primary care, and preventive services all experienced large increases in utilization. Comparing utilization before and after the reform, Long, Stockley, and Dahlen (2012) found a statistically significant increase of 4.7 percentage points in the fraction of Massachusetts Health Reform Survey respondents reporting that they had a usual source of health care that was not an emergency department. Prior to the reform, 85.7% of respondents reported that they had a usual source of care, so this change represents an increase of 5.4%. The fraction reporting office visits for preventive care increased by about six percentage points and dental care increased by about five percentage points. Those reporting having multiple office visits in the last year also increased by about five percentage points.

Kolstad and Kowalski (2012) also observed increases in primary and preventive care using data from the Behavioral Risk Factor Surveillance System (BRFSS). Rather than analyze the before and after rates in Massachusetts, the authors compared the growth in the utilization of certain services in Massachusetts with the growth in the use of these services in other states employing a difference-in-differences model. They found that the reform increased the probability of individuals in Massachusetts reporting that they had a personal doctor and received a flu shot and decreased the probability of reporting not being able to access care due to costs. I (Miller 2012b) used the same difference-indifferences approach to analyze data about children under age 18 from the National Health Interview Survey. I found that children in Massachusetts were reported to have more office visits and check-ups following the reform relative to children in other states, although the effect was statistically significant in only some models.

Hospital Care

As previous work (e.g., the RAND Health Insurance Experiment) has shown that patients are fairly sensitive to changes in the costs of care, it is unsurprising that the expansion of insurance coverage would lead to greater utilization of routine care. In particular, routine care may seem discretionary and easy to skip for patients who face high out-of-pocket costs. Still, while utilization increased for primary care and preventive services, the use of hospitals for preventable conditions declined modestly even as the cost of hospital care to consumers fell. Kolstad and Kowalski (2012) used data from the Nationwide Inpatient Sample (NIS), a sample of hospital discharge data covering approximately 20% of all hospitals in the United States, to evaluate the effect of the reform on hospital care. In models that controlled for the severity of patient comorbidities, the authors saw that the reform resulted in a small reduction in overnight hospitalizations for conditions deemed preventable with quality outpatient care. For example, hospital admission for adult asthma, appendicitis resulting in perforation of the appendix, and complications due to diabetes are all considered preventable with timely outpatient care. (3) Of the 13 preventable conditions included in the analysis, the authors observed significant reductions in six and an increase in only one. Using a summary measure, the authors found that the reform reduced the fraction of hospital visits considered preventable by 2.7%. This reduction in preventable hospitalizations reflects improved access to and utilization of primary care.

Kolstad and Kowalski (2012) also found that the reform reduced the fraction of hospital admissions that originated in the emergency room (ER) by about 5% overall, with the effect on ER admissions varying by patient zip code. Patients from wealthy zip codes experienced almost no effect of the reform; however, patients from the poorest zip codes saw an effect that was more than double the average. Since patients with lower incomes were also more likely to have gained coverage through the reform, the authors concluded that the expansion of insurance coverage drove the observed reduction in the fraction of hospital admissions originating in the ER.

Despite the reduction in preventable and ER hospitalizations, the authors' results indicated that the total number of hospital discharges did not change as a result of the reform. Because the provision of insurance coverage to the uninsured lowers their out-of-pocket costs, it is possible that the newly insured increased their use of hospital services for discretionary care, even as preventable and emergency room visits fell. It is also possible that as the uninsured gained coverage and began to access primary care, physicians identified previously undiagnosed conditions, leading to an increase in hospitalizations. The authors also suggest that the reduction in emergency room use could reflect a change in a patient's point of entry to the hospital rather than a reduction in that patient's overall use of hospital care. That is, rather than showing up in the emergency room once their illness becomes severe, patients who gain insurance instead enter the hospital by appointment through their primary care provider or another health care professional.

Emergency Room Care

Emergency room visits that result in an admission to the hospital tend to be for severe medical conditions. However, there is reason to believe that the uninsured have an incentive to use the ER for nonurgent conditions, and that providing them with insurance may cause them to use office-based care in lieu of visiting the ER. In Massachusetts, approximately 20% of all ER visits result in an admission to the hospital. Visits that do not result in a hospital admission tend to be for less serious diagnoses.

Although hospital ERs are intended to treat acute medical conditions, the federal EMTALA mandates that hospitals treat all patients with medical emergencies regardless of their ability to pay. As already suggested, this may have encouraged the uninsured to use hospital ERs even for conditions that could have been treated elsewhere because hospitals were unlikely to turn these people away. Furthermore, Massachusetts had relatively generous laws in place prior to the reform governing the use of ERs for low-income uninsured patients, and these policies may have further encouraged inappropriate use of the ER. Specifically, in response to the federal mandate to provide emergency room care, Massachusetts created a state program called the Uncompensated Care Pool to cover the cost of emergency room visits for low-income uninsured and under-insured patients. (4) The uninsured covered by this program did not face a copay when visiting the emergency room. The program, however, did not cover office visits to private physicians' offices, although it did reimburse community health centers for the care they provided patients covered by the Uncompensated Care Pool. This may have encouraged the uninsured to seek care in the hospital emergency room where they would not be required to pay for care (and would not be turned away) even for conditions that were not medical emergencies. Using the emergency room for non-emergency medical conditions is problematic because it may increase wait times for other patients and because emergency room visits are significantly more expensive than office-based care (Bamezai, Melnick, and Nawathe 2005).

A classification system developed by Billings, Parikh, and Mijanovich (2000) categorizes emergency room visits into six groups. Visits that are "non-urgent" such as a sore throat, do not require medical attention within 12 hours. "Emergent, but primary care treatable" visits occur when the patient needs immediate medical attention, but appropriate medical care could safely be provided in an office setting. For example, an ear infection may fall into this category. "Preventable or avoidable emergencies" require emergency department care and cannot be safely treated in an office setting, but these visits could have been avoided if the patient received timely outpatient care. For example, a severe asthma attack may be considered a preventable emergency. "Non-preventable emergencies" are medical emergencies that could not have been avoided with routine care, such as a heart attack, and "injuries" are considered a separate category. Finally, visits related to alcohol, substance abuse, or mental health are not included for consideration in the previous five classifications and may be considered part of the ubiquitous "other" category. Using this classification system, I (Miller 2012a) found that in Massachusetts prior to the reform, emergency department visits from the uninsured were significantly more likely to fall into the non-urgent and primary care treatable categories, with over 40% of ER visits from uninsured patients falling into these categories.

To evaluate the effect of the reform on emergency room use, I (Miller 2012a) assumed that counties in Massachusetts with higher uninsurance rates before the reform experienced a larger increase in coverage than counties where most of the population was already insured. Using administrative data on all emergency room visits (including those not leading to a hospital admission) that occurred in Massachusetts between 2002 and 2008, I analyzed the relative change in emergency room use within Massachusetts before and after the reform based on the pre-reform uninsurance rate. I also compared counties in Massachusetts to similar counties in other states over this period. I found that the reform reduced emergency room use by about 5%. Most of this reduction--over 80%--was attributable to a reduction in visits classified as non-urgent or primary care treatable. In contrast, non-preventable emergencies and injuries were not affected by the reform. Consistent with Kolstad and Kowalski (2012), I (Miller 2012a) also found a small reduction in ER visits that result in admission to the hospital, although the effect of the reform on these types of ER visits was not statistically significant in most models. Additionally, the reduction in emergency room visits was largest on week days and smallest overnight and on the weekends, when physicians' offices tend to be closed, implying that physician availability plays an important role in the use of the hospital ER. This evidence suggests that expanding insurance coverage to the uninsured caused them to use office-based care in lieu of hospital emergency room care for conditions where such substitution is appropriate.

Evidence from survey data also suggests emergency room visits fell modestly. Long, Stockley, and Dahlen (2012) noted that by 2010, the probability of a Massachusetts survey respondent reporting a hospital emergency room visit fell by 3.8%. In particular, the probability of heavy emergency room use (three times or more in the last year) fell by 1.9% and the probability of reporting a non-urgent emergency room visit fell by 3.8%. I (Miller 2012b) similarly found a significant reduction in emergency room visits among children.

The reduction in ER visits following the Massachusetts health reform is surprising because previous research had suggested that expanding insurance coverage would increase, rather than decrease, hospital emergency room use. Work by Anderson, Dobkin, and Gross (2012) showed that as children "age out" of their parents' coverage upon turning 19, they tend to use less emergency room care, not more. The difference in these results may be driven by two factors. First, it could be that young adults respond differently to insurance coverage than a typical uninsured person. The evidence from Massachusetts captures the average effect of the reform among all who gained insurance, a broad group of uninsured residents. Second, the Uncompensated Care Pool policies that were in place in Massachusetts may have encouraged low-income residents to use emergency room care more before the reform, resulting in a greater reduction in ER use than would be observed in a state with less generous policies. The applicability of the Massachusetts experience to other states may therefore depend on how similar policies governing the provision of hospital care to the uninsured are across states.

Health Outcomes

Ultimately, an important goal of the Massachusetts health care reform legislation is to improve the health and well-being of Massachusetts residents. However, the effect of expanding insurance coverage on self-reported health is ambiguous: while the use of primary and preventive care should improve health, increased contact with medical professionals could lead individuals to discover medical problems they did not realize they had, potentially lowering their personal assessment of the quality of their own health. The most extensive study to investigate how the Massachusetts reform affected self-reported health is Courtemanche and Zapata (2012), who used data from the BRFSS to assess the effect of the Massachusetts reform on self-reported overall health, mental health, and physical health. Using a difference-in-differences approach, the authors found that all categories of health improved substantially as a result of the reform: Massachusetts residents were more likely to rate their health as "very good" or "excellent" and less likely to rate their health as "fair" or "poor." After the reform, the number of days Massachusetts residents reported not being in good mental health fell by .02 standard deviations relative to residents of other states; the number of days not in good physical health fell by .03 standard deviations. In addition, the reform reduced the number of days individuals reported having health limitations or function-limiting joint pain, increased the amount of moderate exercise undertaken by individuals, and lowered body mass index.

New Evidence: The Effect of the Reform on Emergency Room Use, Preventive Care, and Health Outcomes

In this section, I provide additional evidence on the effect of the Massachusetts reform on the utilization of health services and self-reported health using data on adults ages 18 to 64 from the NHIS. The National Health Interview Survey is a large cross-sectional survey conducted by the National Center for Health Statistics (NCHS) on a broad range of health topics. The analysis I present is similar to the evidence given by Long and Stockley (2011), although I focus on different outcomes and use a different methodology. (5)

Prior to the reform, there were substantial differences in how insured and uninsured nonelderly adults in Massachusetts used health services. Table 1 displays descriptive statistics from the 2003 to 2005 NHIS by insurance status. Eighty-seven percent of the insured reported having an office visit in the last 12 months, but only 61% of the uninsured reported such a visit. The insured were almost twice as likely to receive a flu shot as the uninsured. Strikingly, the uninsured were almost 10 times more likely than the insured to report that they usually went to the emergency room when sick and that there was no place where they received routine preventive care. These differences are statistically significant at the 1% level. The uninsured were more likely to visit the emergency room over the last 12 months, although the difference in utilization between the two groups is small and not statistically significant. Finally, the probability that an uninsured person reported being in excellent health was about four percentage points, or about 10%, lower than that of an insured respondent, although the difference is not statistically distinguishable from zero.

Using data from the 2003 to 2008 National Health Interview Surveys, I employ a difference-in-differences technique to evaluate the reform's effect on the way Massachusetts residents used the hospital emergency room and preventive care. I also investigate whether the reform affected self-reported health. As noted earlier, the difference-in-differences method compares the change in the outcome variable in Massachusetts before and after the 2006 reform with the change in the same outcome in other states. I define the pre-reform period as the 2003 to 2005 surveys, which asked about retrospective health use in the previous 12 months. For the post-reform period, I employ the 2008 survey. Because the NHIS is conducted throughout the year, the responses to the 2008 survey reflect health service use that could date back to as early as January 2007 and as late as December 2008; that is, it encompasses, in part, the implementation period of the reform and the period immediately following that implementation. For this reason, this analysis may not capture changes in utilization that evolve over a longer time frame.

For comparison, I use the other states in the northeast census region: New Jersey, New York, Pennsylvania, Connecticut, Maine, New Hampshire, Rhode Island and Vermont. Other difference-in-differences studies, such as Kolstad and Kowalski (2012) and Courtemanche and Zapata (2012), included results from this comparison group. In these models, I control for an individual's age, gender, race, and ethnicity, and limit the sample only to adults age 18 to 64. Sample sizes vary across models since only one household member is given a more detailed survey regarding his use of health services and some outcome variables are only available for these respondents. There is also variation in the frequency of outcome variables that are missing. For binary dependent variables, I use a linear probability model.

Table 2 presents the results. I find that the reform significantly increased the probability that a survey respondent would report having an office visit by three percentage points or about 4%. The reform also increased the probability the survey respondent reported receiving a flu shot in the last year by three percentage points or about 30%. The reform decreased reports that the respondent had no regular place to receive preventive care, although this decrease was small (about .4 percentage points) and not statistically significant. These results confirm the analysis conducted with other surveys (Kolstad and Kowalski 2012; Long, Stockley, and Dahlen 2012) that found the reform increased the use of routine and preventive care.

I find no significant effect of the reform on emergency room use, although the point estimate indicates a two-percentage-point reduction in the probability of using the ER in the last 12 months. I do find that the reform reduced the fraction of respondents reporting that their usual source of care when sick was the ER. This effect is significant at the 10% level. Although the effect on total emergency department usage is not measured precisely, the point estimate is close in magnitude to the effect of the reform on statewide ER use documented in my other study (Miller 2012a), a reduction of 2.4 percentage points. My results in Miller (2012a) are more precise because I used administrative data on all ER visits, rather than a sample of only some Massachusetts residents.

Despite the documented increases in the use of primary and preventive services following the reform, I do not find that reported hospital use decreased. The effect of the reform on reports of staying overnight in the hospital is not statistically significant, and the point estimate indicates that, if anything, respondents were more likely to stay overnight in the hospital following the reform. However, this analysis is based on data only one year after the reform. It is possible that the increased use of preventive care will be effective in reducing hospitalizations in the future.

Finally, this analysis also finds evidence that self-reported health and well-being improved, consistent with the results presented in Courtemanche and Zapata (2012). The probability that a survey respondent in Massachusetts reported having excellent health increased by four percentage points, or about 10%. This effect is statistically significant at the 1% level.

Taken together, the results from this analysis of the National Health Interview Survey are broadly consistent with the evidence available to date on the effect of the Massachusetts health care reform on access and utilization. The reform spurred usage of routine and preventive care, resulting in a modest reduction of over-reliance on emergency rooms and an increase in those reporting better health.

Conclusion

The provision of insurance to the uninsured lowers their out-of-pocket costs of health care and encourages them to use more medical services in general. However, expanding insurance coverage also may lead the uninsured to use services more effectively, preventing costly medical problems later in life or encouraging individuals to seek care in more cost-effective settings, such as a physician's office rather than a hospital emergency room. The evidence to date on the effect of the 2006 Massachusetts reform on utilization confirms both of these aspects of insurance provision. Following the reform, the use of primary care increased. There were fewer hospital visits for conditions that are considered preventable with routine care. The reform reduced hospital emergency room usage, particularly for visits classified as non-urgent or primary care treatable. Furthermore, self-reported physical and mental health improved in Massachusetts as a result of the reform.

This paper presents evidence from the National Health Interview Survey that the Massachusetts reform increased the use of office-based care and the probability that a respondent received a flu shot. The reform reduced individuals' reliance on hospital emergency rooms as their usual source of care, and self-reported health improved. While there is not yet evidence that the reform generated significant cost savings in the form of fewer hospital admissions, the increased use of preventive services, the fall in preventable hospitalizations, and the better self-assessments of health are all signs of a meaningful improvement in the way patients interact with the health care system.

References

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Anderson, M., C. Dobkin, and T. Gross. 2012. The Effect of Health Insurance Coverage on the Use of Medical Services. American Economic Journal: Economic Policy 4(1): 1-27.

Bamezai, A., G. Melnick, and A. Nawathe. 2005. The Cost of an Emergency Department Visit and its Relationship to Emergency Department Volume. Annals of Emergency Medicine 45(5):483-490.

Billings, J., N. Parikh, and T. Mijanovich. 2000. Emergency Department Use in New York City: A Substitute for Primary Care? Issue Brief. New York: The Commonwealth Fund.

Card, D., C. Dobkin, and N. Maestas. 2007. The Impact of Nearly Universal Insurance Coverage on Health Care: Evidence from Medicare. American Economic Review 98(5):2242-2258.

Congressional Budget Office (CBO). 2006. Non-profit Hospitals and the Provision of Community Benefits. Washington, D.C.: CBO.

Courtemanche, C. J., and D. Zapatas. 2012. Does Universal Coverage Improve Health? The Massachusetts Experience. Working paper. Atlanta, Ga.: Georgia State University.

Currie, J., and J. Gruber. 1996. Health Insurance Eligibility, Utilization of Medical Care, and Child Health. Quarterly Journal of Economics 111(2):431-466.

Dafny, L., and J. Gruber. 2005. Public Insurance and Child Hospitalizations: Access and Efficiency Effects. Journal of Public Economics 89:109-129.

Finkelstein, A., S. Taubman, B. Wright, M. Bernstein, J. Gruber, J. P. Newhouse, H. Allen, K. Baicker, the Oregon Health Study Group. Forthcoming. The Oregon Health Insurance Experiment: Evidence from the First Year. Quarterly Journal of Economics.

Kaestner, R., and A. Lo Sasso. 2012. Does Seeing the Doctor More Often Keep You Out of the Hospital? NBER Working Paper. Cambridge, Mass.: National Bureau of Economic Research.

Kolstad, J. T., and A. E. Kowalski. 2012. The Impact of an Individual Health Insurance Mandate on Hospital and Preventive Care: Evidence From Massachusetts. Journal of Public Economics 96(11-12):909-929.

Langland-Orban, B., E. Pracht, and S. Salyani. 2005. Uncompensated Care Provided by Emergency Physicians in Florida Emergency Departments. Health Care Management Review 30(4):315-321.

Long, S., and K. Stockley. 2011. The Impacts of State Health Reform Initiatives on Adults in New York and Massachusetts. Health Services Research 46(1):365-387.

Long, S., K. Stockley, and H. Dahlen. 2012. Health Reform in Massachusetts as of Fall 2010: Getting Ready for the Affordable Care Act and Addressing Affordability. Urban Institute Research Report. Washington, D.C.: The Urban Institute.

Meyer, B. D. 1993. Natural and Quasi-experiments in Economics. Journal of Business and Economic Statistics 13(2):151-161.

Miller, S. 2012a. The Effect of Insurance on Emergency Room Visits: An Analysis of the 2006 Massachusetts Health Reform. Journal of Public Economics 96(11-12):893-908.

--. 2012b. The Impact of the Massachusetts Health Care Reform on Health Care Use among Children. American Economic Review: Papers and Proceedings 102(3):502-507.

Newhouse, J. 1993. Free For All? Lessons from the Rand Health Insurance Experiment. First ed. Cambridge, Mass.: Harvard University Press.

Notes

The author thanks NCHS analyst Robert Krasowski for his preparation of the National Health Interview Survey data and helpful communications.

(1) Based on data downloaded from: http://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201206.pdf (National Health Interview Survey), http:// www.census.gov/hhes/www/hlthins/index.html (Current Population Survey) and http://www.census.gov/acs/www/ (American Community Survey) on Sept. 10, 2012.

(2) For more information on difference-in-differences, see Meyer (1993).

(3) These prevention quality indicators were developed by the Agency for Healthcare Research and Quality. See http://www.qualityindicators.ahrq.gov/ for a complete list of preventable conditions including a description of each condition and justification for its inclusion.

(4) Even in states without uncompensated care pools, a significant portion of emergency room care is given without the hospital ever receiving payment (see, e.g., Congressional Budget Office 2006; Langland-Orban, Pracht, and Salyani 2005).

(5) The variables that overlap between Long and Stockley (2011) and this analysis are: whether the respondent had an office visit in the last 12 months, and if the respondent visited the emergency room. Results are qualitatively similar for emergency room use; however, I find that the reform increased office visits whereas Long and Stockley (2011) found no significant effect. This discrepency may result from methodological differences; for example, I do not control for health status, which is correlated with health care utilization and was directly affected by the reform.

Sarah Miller, Ph.D., is a Robert Wood Johnson Foundation Scholar in Health Policy Research at the University of Michigan, and an assistant professor at the University of Notre Dame. Address correspondence to Dr. Miller at University of Michigan, SPH-II M2208, 1415 Washington Heights, Ann Arbor, MI 48109. Email: mille@umich.edu
Table 1. Health and health care utilization among adult Massachusetts
residents prior to reform, by insurance status

                                          Insured       Uninsured
In the last 12 months did you have at
    least one ...
  Office visit                          .87 (.01)     .61 (.04) ***
                                          [1,904]         [185]
  Emergency room visit                  .23 (.01)     .25 (03)
                                          [1,9121         [187]
  Overnight hospital stay               .07 (.004)    .05 (.01) *
                                          [4,100]         [4621
  Flu shot                              .10 (.005)    .06 (.01) ***
                                          [4,065]         [459]
Health reported as "excellent"          .39 (.01)     .35 (.02)
                                          [4,103]         [461]
Usual source of care is ER              .002 (.001)   .02 (.01) ***
                                          [4,108]         [465]
No usual source of                      .02 (.002)    .15 (.02) ***
  preventive care                         [4,090]         [461]

Source: Author's own analysis of the National Health Interview
Survey, 2003-2005, for respondents ages 18 to 64.

Notes: Standard errors are reported in parentheses. Sample size is
reported in brackets. Sample size differs between questions because
only one adult per household completes full interview. Sample size
also differs due to missing values in the outcome variable.

* Significant at 10% level; ** significant at 5% level;
*** significant at 1% level.

Table 2. Difference-in-differences effect of
the Massachusetts reform on utlization and
health measures

Outcome variable        Effect of the reform

Office visit               .03 (.01) ***
                              [21,509]
Flu shot                   .03 (.004) ***
                              [52,999]
No regular place to       -.004 (.005)
  get preventive care         [53,208]
ER visit                  -.02 (.01)
                              [21,663]
ER is place usually       -.003 (.001) *
  go when sick                [21,663]
Overnight in hospital      .005 (.004)
                              [53,207]
Excellent health           .04 (.01) **
                              [53.367]

Notes: Robust standard errors clustered by state are in
parentheses. Sample size is in brackets. Sample size differs
between questions because only one adult per household
completes full interview. Sample size also differs due to
missing values in the outcome variable. The sample includes
all respondents age 18 to 64 in Massachusetts and other
states in the Northeast census region. These models control
for race, gender, age, and ethnicity.

* Significant at 10% level; ** significant at 5% level;
*** significant at 1% level.
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Title Annotation:Findings from Massachusetts Health Reform: Lessons for Other States
Author:Miller, Sarah
Publication:Inquiry
Geographic Code:1U1MA
Date:Dec 22, 2012
Words:6227
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