Role of primary care in reducing hospitalizations

This study analyzed whether disabled cash-assisted Medicaid-only beneficiaries (CAMODs) in high-spending Medicaid spending areas have better outcomes than their counterparts in lower spending areas. In particular, Waidmann assessed whether CAMODs living in areas with higher spending for ambulatory care and other acute care services (prescription drugs, home health, durable medical equipment) have higher (or lower) number of hospital admissions, hospital admissions for ambulatory care sensitive conditions, hospital readmissions and ambulatory care follow up after an inpatient admission. These assessments were made both without any adjustment and after controlling for area differences in health status and demographic characteristics of Medicaid beneficiaries and health care prices. Results indicated that adding controls for reimbursement rates and beneficiary age and observable health status explained a significant portion of, but by no means all geographic variation in Medicaid spending. However, even after these adjustments, we find a positive correlation between hospital and non-hospital spending. This could mean that there are geographic patterns in CAMODs' access to care or in the intensity of care delivered by health care providers, or that there are geographic differences in need that are not observable in claims data.