Impact of universal healthcare on patient choice and quality of care

Diwas Kc and Tongil Kim

Production and Operations Management, 2022, vol. 31, issue 5, 2167-2184

Abstract: This paper examines the role of universal healthcare on patient choice and quality of care. Lack of health insurance is a leading contributor to emergency department (ED) visits from the uninsured. Using a natural experiment from Massachusetts, we follow previously uninsured individuals over time—both before and after the implementation of universal healthcare—to study the effects of insurance availability on their healthcare seeking behavior. We find that the availability of health insurance has a significant impact on the type of healthcare sought by the previously uninsured. Specifically, individuals are less likely to continue visiting the ED and instead more likely to choose hospital inpatient and outpatient services. We find that frequent fliers and patients with chronic conditions, who are both known to account for a substantial share of healthcare costs, exhibit heterogeneity in this behavior. Finally, we examine the effect of the policy on quality of care, as measured by short‐term ED revisits. Although the overall revisit rates remain unchanged, frequent ED users and chronic patients experience a decline in short‐term ED revisits. With key features of the Affordable Care Act being frequently criticized for repeal, understanding how these changes influence patient choice and quality of care is significantly policy relevant.

Date: 2022
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