Factors Impacting Emergency Department Use

Abstract

This paper uses data from the 1999 to 2005 Medical Expenditures Panels (MEPS) to evaluate issues pertaining to the impact of family income and insurance coverage on Emergency Department (ED) utilization by working-age adults. In the current health care system, working-age uninsured and publicly insured working-age adults are highly dependent on ED services for their health care. However, ED utilization by the uninsured working-age population is lower than the ED utilization for the privately insured population. Repeat-ED usage is higher for the uninsured than for the privately insured. One out of every four publicly insured working-age adults will use an ED room at some point during the year and one of ten will be a repeat ED visitor. ED expenditures by the uninsured and publicly insured are around 23% of total ED expenditures and 0.7% of total health care expenditures. Reductions in ED compensation from treating the uninsured or publicly insured individuals will have very little impact on total health care expenditures but will have a substantial impact on ED budgets. Economists have defined an good as a good or service with decreased consumer demand at higher income levels. The evidence presented here suggests emergency room services are an inferior good as defined in the economics literature. However, inferiority in the context of the microeconomic definition pertains exclusively to the income elasticity of demand and is not a commentary on either the quality or importance of services.