John Ayanian, director of the Institute for Healthcare Policy and Innovation.

Medicaid Expansion’s Early Impact in Michigan

IHPI study findings exceed expectations

By Allison Wilson With additional reporting by Kara Gavin
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Members of the University of Michigan Institute for Healthcare Policy and Innovation, or IHPI, recently shared some encouraging — and in some cases surprising — discoveries about Medicaid expansion in the state of Michigan.

Michigan's model for the expansion of Medicaid coverage under the Affordable Care Act is called the Healthy Michigan Plan. It launched in 2014 and made health care benefits available for individuals age 19–64 with an income at or below 138 percent of the federal poverty level. The plan includes additional reforms such as the creation of individual MI Health Accounts for health care expenses and cost-sharing contributions, and opportunities for beneficiaries to reduce their cost-sharing by completing health risk assessments and engaging in healthy behaviors. The Michigan Department of Health and Human Services, or MDHHS, has tapped IHPI to conduct an independent evaluation of the plan’s impact on participants and on the state’s health care system. IHPI researchers are also conducting their own studies in addition to the official evaluation.

During the Healthy Michigan Plan’s first year, approximately 600,000 Michiganders enrolled. The rapid increase of insured patients was greater than expected, and new enrollees were required to establish care with a primary care physician within 90 days. The combination of those factors led to concerns about the capacity for clinics to provide timely health care services for this new population, says Renuka Tipirneni, M.D., a clinical lecturer in the U-M Division of General Medicine, who led a simulated patient, or "secret shopper," study to determine the ability of patients to fulfill that 90-day requirement.

Researchers acting as patients requesting routine checkups with new providers called nearly 300 primary care clinics several months before the expansion took effect, and three times in the first year afterward. Appointment availability for new Medicaid patients increased about 6 percent, and wait times remained within two weeks for both Medicaid and privately insured patients.

"For people who were worried, we found a much more optimistic result than expected," Tipirneni says. “We also saw steady increases in appointments scheduled with nurse practitioners, physician assistants and other non-physician professionals. After expansion, appointments with those professionals nearly doubled for Medicaid patients, and 1 in 5 of both types of patients were scheduled with non-physician professionals. Whether that’s due to new hiring practices, changing roles in health care, or other underlying factors is something that we plan to look into going forward.”

Tipirneni says researchers also plan to use the same secret shopper method to study the patient experience as federal funding for Medicaid coverage decreases and cost-sharing for enrollees increases in 2017 and subsequent years. Her team may also investigate the impact of another change to the plan that begins in 2018: Enrollees with incomes at 100–138 percent of the federal poverty level will be required to either complete a healthy behavior commitment to continue on the Healthy Michigan Plan, or get assistance to obtain a plan through (the "Marketplace Option").

Meanwhile, Tipirneni’s colleagues at IHPI are investigating the impact of Medicaid expansion on inpatient care, and also recently shared some results based on the first year’s data. Published in the Journal of the American Medical Association, their study found that in Michigan hospitals, the portion of uninsured patients dropped four percentage points, and the portion of patients covered by Medicaid rose more than 6 percentage points. This study was the first to describe statewide trends in Michigan under the ACA.

"We expected that, statewide, we would see a substantial increase in Medicaid coverage and a decrease in the portion of patients who were uninsured at the time of hospitalization," says John Z. Ayanian, M.D., the study’s senior author and director of IHPI. “But to see how consistent it was across approximately 90 percent of all Michigan hospitals was a surprising and important finding of our study.”

The expectation is that reducing the number of patients who are uninsured at the time of hospitalizations may translate into better financial margins for hospitals, as they will have less charity care they need to cover for uninsured patients, Ayanian says.

"That’s the next phase of research," adds Ayanian, who is also the Alice Hamilton Collegiate Professor of Medicine. "As part of [IHPI’s] evaluation of Medicaid expansion, the state has asked us to look at what happens to uncompensated care. Over the next year, we’ll be conducting those analyses to better understand how the changes in the insurance patterns of patients being hospitalized are affecting the levels of uncompensated care that hospitals are required to provide."

So far, 31 states have expanded Medicaid coverage under the ACA, and the IHPI studies could prove influential for the 19 states that have not expanded their coverage. The institute has assembled an interdisciplinary team of 17 University of Michigan faculty members across multiple schools and departments. Researchers will work with MDHHS over a five-year demonstration period to provide periodic findings and will develop a final report at the end of the demonstration period in 2019.

John Ayanian, director of the Institute for Healthcare Policy and Innovation.