Filling hospital beds

Experts predict the potential effects of universal health coverage.

Your hospital is probably often full or close to it, right? All the way back in the 1950s, researchers had observed that U.S. hospital beds tended to stay mostly occupied, regardless of facilities' size or location. Public health researcher Milton Roemer, MD, in 1959 posited his law that a hospital bed built is a hospital bed filled.

That was true despite there being many fewer people in the health insurance system at the time. Now, with presidential candidates' universal coverage proposals offering the prospect of expanded health care access, experts are pondering what such changes might mean for hospital care and overall health care costs.

Image by Getty Images
Image by Getty Images

“The biggest reason why coverage expansions [may] cost society is if it drives up utilization of health care, which isn't necessarily a bad thing, but we still have to have a sense of how much health care use is rising if we're going to be able to know in advance what these coverage expansions will do,” said Adam Gaffney, MD, a pulmonary and critical care subspecialist and instructor in medicine at Harvard Medical School in Boston.

To make some predictions, he and colleagues recently studied how past coverage expansions—the 1965 passage of Medicare and Medicaid and the 2014 implementation of the Affordable Care Act (ACA)—affected hospital utilization. They looked at the number of bed days and the number of hospitalizations per capita before and after each coverage expansion.

“What we found was that at least early on, there wasn't really any major effect overall in terms of hospital use,” reported Dr. Gaffney. This was true with both coverage expansions, according to their study, published by Annals of Internal Medicine earlier this year (see sidebar).

The results were not terribly surprising to other experts who have studied the use of hospitals. “We don't have good measures of what actual need for hospital beds is,” said Paul L. Delamater, PhD, assistant professor of geography and a fellow at the Cecil G. Sheps Center for Health Services Research at University of North Carolina at Chapel Hill.

Further complicating estimations of the need for hospital beds, current factors are pulling demand in opposite directions—there's increasing ability to treat sick patients out of the hospital, but also more sick patients.

“The demographics of the population are such that it's aging and there's more need for health care, including hospital care. That's going to somewhat offset the changes in practice that will enable people to be treated on an outpatient basis,” said Joseph Restuccia, DrPH, MPH, a professor of operations and technology management at Boston University's Questrom School of Business.

It all adds up to a lot of uncertainty about how more insured patients would affect hospitals. “The health care system does flex in these weird ways that you would not expect sometimes,” Dr. Delamater said. “If there's a whole new set of insured people, it's not like you're just going to add that on top.”

Regional variation

The U.S. already has a lot of regional variation in hospital utilization, a finding that has been a research focus of Elliott Fisher, MD, MPH, a professor of family and community medicine, and his colleagues at the Dartmouth Institute in New Hampshire.

Their investigation of this topic began at home in New England in the 1980s. “Back when those studies were done, patients in Boston were hospitalized 60% more than patients in New Haven,” said Dr. Fisher. Since then, such variation has proven to be widespread. “There are almost twofold differences in spending and utilization across the United States and within some states,” he said.

The higher-spending areas, where the hospitals were used more, did not seem to get any better results. “We followed heart attack patients, hip fracture patients, colon cancer patients, and a representative sample of the Medicare population,” said Dr. Fisher. “In terms of measures of quality, they were very similar. In terms of measures of outcomes, they were nearly identical.”

Many aspects of patient care were the same across the regions, he noted. “Evidence-based practices were pretty similar in high- and low-spending regions. There was variation, but it was totally unassociated with spending. Physicians try to do the best they can, the interpretation was,” Dr. Fisher said.

The findings likely match up with the experiences of many frontline clinicians. “I'm sure hospitalists recognize that many of the patients who come into the hospital for medical conditions could also have been managed at home,” he said.

The Annals study also found evidence of this dynamic. While the number of hospitalized patients didn't increase with the coverage expansions, their demographics did change. When Medicare and Medicaid began, hospital use increased among elderly and low-income populations and decreased among younger and higher-income populations. The ACA was associated with a reduction in hospital use by people in good health and a slight increase by those with fair or poor health.

“What we really think is going on here is that there's a little bit of what we call supplier-induced demand, that before Medicare, hospitals were being kept full to some extent anyway by elective admissions that maybe didn't need to happen,” said Dr. Gaffney.

Given the business model of health care, that only makes sense, noted Dr. Delamater. “If the physicians aren't admitting people into the inpatient hospital, the hospital's going to have empty beds, and we know that empty beds are bad for hospitals generally,” he said.

For hospitalists who already aren't seeing any empty beds, the study's results suggest that another coverage expansion could increase their patients' severity of illness. But it's likely to be so small as to be imperceptible on a local level, according to Dr. Gaffney.

“For instance, let's say 9% of the population is uninsured right now,” he said. “Let's say those 9% newly covered people use a little bit more hospital care. Let's say they use 25% more hospital care, 50% more hospital care even. That would only mean a very minor offset among the already insured population.”

A caveat for hospitals

What coverage expansion means for hospitals will depend on the crucial caveat in the Annals study's conclusions. The authors wrote that “universal coverage is unlikely to cause a surge in hospital use if growth in hospital capacity is carefully constrained.” Such constraints were not in place last time around, Dr. Gaffney noted. Other experts' longer-term research on the effects of Medicare has found that the increase in coverage was eventually associated with more hospital construction, he said.

And there aren't currently many constraints in place to prevent a repeat, according to Dr. Fisher. “We won't necessarily spend more if we go to universal coverage, unless hospitals are allowed to continue building sprees,” he said. “There are very few places where hospitals don't want to grow.”

Potential constraining factors on such sprees include certificate-of-need policies, Dr. Delamater noted. “State-based regulation of where hospitals can be and how big they can be as well—that's kind of another finger on this that can potentially move the needle a little bit about basically who can offer services and where they can offer them,” he said.

More local initiatives have also found some success. “The best example is probably Rochester, New York, where they have had a collaborative process really for the last 30 years to try to limit the unnecessary growth of hospital capacity and they have among the lowest per capita spending rates in the country,” Dr. Fisher said.

Other options include capitated or global payment models for hospitals, according to Dr. Fisher. “[Hospitals] have to either be disrupted by new payment models . . . or they have to become part of the solution and say, ‘We need to right-size ourselves so that we can deliver better care at much lower costs,’” he said.