Reducing Hospitalizations

Will the ACA Really Reduce Hospitalizations?

The Affordable Care Act is an exercise in balancing contingencies. To make the idea work, virtually everyone needs to have health insurance. To ensure that people have insurance, the government offers subsidies as well as tax penalties for those who don’t sign up—a carrot-and-stick approach. And to lower costs, the entire system pushes greater efficiencies through technology and preventative care to reduce the need for acute treatment. If the entire approach works, it should result over time in reduced health disparities by race and economic strata.

Much of the ACA was modeled on the health care reform that Massachusetts undertook some years ago. But some recent research raises questions about whether the state reforms achieved the goals they had set. That could be bad news for the ACA.

One study out of Harvard suggests that Massachusetts didn’t lower preventable hospitalizations, a significant cost to the overall healthcare system.

According to the study of 900,000 patient records from late 2004 to 2009, the period of the Massachusetts healthcare reform’s implementation, preventable hospital admissions for such diseases as asthma, diabetes, and heart failure dropped by 2.1 percent. However, that may not have been due to the legislation. In three other states near Massachusetts—New York, New Jersey, and Pennsylvania—that had not changed their healthcare laws, preventable admissions dropped by 3.5 percent.

In addition, preventable admissions for African-Americans actually rose 1.8 percent in Massachusetts. The rise in the other three states was 2.1 percent.

Preventable hospital admissions are one major drain on hospital resources and, therefore, expensive to the overall system. If the Massachusetts reform was effective, why would other relative near states have seen a faster drop?

The state also reimbursed hospitals for poor patient treatment and started at an uninsured rate of 12 percent, less than half of what such states as California and Texas have. In other words, there may have been fewer gains to make.

In a separate study from Harvard studies out of the University of Chicago, researchers looked at records of knee and hip replacement surgery and found that broader healthcare coverage did increase the use of the procedures among Hispanics and African-Americans but not among low-income households compared to higher-income ones.

Massachusetts already had a stronger healthcare system than many parts of the country, but there are some significant differences. The state only offered subsidies for healthcare if someone was at 300 percent of the poverty level, not the 400 percent figure the ACA uses, which means the federal law might cover more people.

But it still provides some potential warning signs that some of the high hopes for the ACA could be disappointed.

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