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The Effect of Large-scale Health Coverage Expansions in Wealthy Nations on Society-Wide Healthcare Utilization [1]

['Gaffney', 'Agaffney Challiance.Org', 'Harvard Medical School', 'Cambridge Health Alliance', 'Cambridge', 'Woolhandler', 'Swoolhan Hunter.Cuny.Edu', 'City University Of New York At Hunter College', 'New York', 'Himmelstein']

Date: 2020-08-18  

Thirteen UHC expansions in 11 affluent nations spanning eight decades were mostly associated with small (< 10%), or no, increases in society-wide hospital and physician utilization. However, many redistributed care from well-off populations to more disadvantaged ones. These findings suggest that healthcare supply may constrain utilization increases, even when financial barriers are lifted. Most,9,10,12,13 but not all,11 cost projections of Medicare-for-All have failed to account for such supply constraints.

Milton Roemer famously noted that “a hospital bed built is a hospital bed filled,”112 and conversely that a limited bed supply constrains utilization. Many studies113,114,115—and our finding that UHC rarely caused a surge in hospital utilization—support “Roemer’s law.” Only New Zealand’s UHC was associated with a spike in hospitalizations, although its implementation during World War II complicates interpretation.

While US hospitals’ average occupancy rate of about 70% suggests that they have spare capacity, the limited supply of nurses and physicians, age- and condition-specific wards, and other factors constrain utilization increases,116,117 a conclusion supported by the lack of increased hospital utilization after the ACA.15,99,103 However, if expanded coverage leads to a boom in hospital construction, as occurred a few years after Medicare’s implementation, inpatient utilization could rise,15,59 emphasizing the salience of regulating hospital expansion.

Physician utilization in the wake of UHC rose sharply only in Taiwan (where physician supply surged, suggesting the need for regulations on the healthcare workforce), with smaller increases in nations such as Great Britain and Finland with particularly large coverage expansions, and no increases in several nations. These findings are consistent with other studies of providers’ responses to coverage changes. After a US miners’ union added copayments in its insurance plan, members’ physician visits decreased, but the miners’ doctors provided more care to their other patients.118 Similarly, when Oregon expanded Medicaid, clinic visits by newly insured patients rose, but fell among those whose insurance was unchanged.119 After Saskatchewan imposed copayments in 1968, overall inpatient use did not change;120 physician visits by poor individuals fell 18%, but probably increased among the affluent.120,121,122 And although visits fell overall by 6%, more were billed as costlier “complete” physician examinations.120,121

Many,123,124,125 but not all,110 econometric analyses have similarly found that doctors provide slightly less care to the previously insured when coverage expands—and slightly more care to those remaining insured when coverage shrinks. Several studies suggest that such utilization reductions among insured populations predominantly affect low-value services, with no evidence of harm.123,124 Similarly, an oversupply of hospital beds in a community apparently does not improve health113 and may increase overutilization of low-value services.114

Our study has limitations. Data for many expansions was incomplete or unavailable, and formal statistical analyses, as well as rigorous study designs (except for the US expansions), often absent. All of the expansions coincided with secular changes in provider supply, which might confound the “demand-side” effect of expansions; consequently, we focused on rapid UHC expansions and short-term utilization changes. We did not analyze UHC’s impact on the utilization of items such as prescription drugs or imaging that may not be supply-constrained, or qualitative changes, such as in the site (i.e., office-based vs. hospital-based) or type (e.g., primary care vs. specialty) of care provided. Nor did we try to assess the effect of coverage expansions on prices, or examine the complex relationship between price changes and utilization. Importantly, as mentioned, our review focused on short-term effects, when supply is constrained; if expanded coverage leads to the expansion of supply over a longer-term horizon (and if regulators permit such expansion), larger utilization increase may well occur.

The expansions we examined also differed in scope. Some achieved UHC without cost-sharing from a low baseline of population coverage, while others were less sweeping. The political, economic, and medical contexts for coverage expansions varied widely, mandating caution in directly extrapolating from those experiences to the current US context. Yet the consistent patterns we observed suggest that our findings can help inform predictions of utilization effects of future coverage expansions in high-income nations.

In summary, history suggests that coverage expansions such as Medicare-for-All redirect care to the poor and sick, but need not drive up overall utilization if growth in supply is regulated.

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[1] Url: https://link.springer.com/article/10.1007%2Fs11606-019-05529-y

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