Hospitals more likely to admit children with private insurance

Medicaid on paper and a stethoscope

New research shows hospitals are more likely to admit children with private insurance over those with publicly funded plans, particularly during times when there are limited inpatient beds, an indication that reimbursement rates play a role in how hospitals manage pediatric patients in the emergency room. 

Researchers from the National Bureau of Economic Research studied billing patterns for children in New Jersey that visited an emergency room between 2006 and 2012. The economists found that children with Medicaid or Children’s Health Insurance Program that presented to the ER with flu symptoms were 10 percent less likely to be hospitalized than those with private plans, according to the Washington Post.  During peak flu season, when there was a shortage of inpatient beds, children between 2 and 10 years old on Medicaid and CHIP were 20 percent less likely to be admitted.

Furthermore, children with Medicaid plans that do receive an inpatient bed often require more services than those with private plans, an indication that the threshold for admission is often higher. Given Medicaid’s notoriously low reimbursement rates, it appear hospitals are at least aware of the business implications of admitting patients with public plans. However, these decisions did not appear to impact the health outcomes of Medicaid patients. 

“Our results suggest that hospitals are more likely to admit children with private insurance than with public insurance when beds are scarce,” Princeton economist and lead study author Diane Alexander told the Washington Post. “However, we find no evidence that this differential treatment translates into differential health outcomes, which raises the possibility that overall admission rates may be too high.”

Physicians groups have previously said that low Medicaid reimbursement rates hamper access to care since physicians are less likely to accept Medicaid patients. Although physician and emergency room visits have declined between 2014, per capita healthcare spending has grown for children with employer-sponsored plans.