Cost and utilization analysis of a pediatric emergency department diversion project

States are struggling to find effective means to decrease Medicaid costs. The objective of this pilot study was to compare emergency department (ED) cost and utilization by members who were enrolled in a pilot program (designed to reduce the use of hospital EDs) with the costs and utilization incurred by a control group.

A large, private, primary care pediatric practice launched a pilot ED diversion program that provided extended office hours, multiple access locations, and care coordination. Participants in the program were Medicaid recipients who were younger than 18 years. Enrollment in the program was through either patient self-selection or mandatory assignment by the state Medicaid agency. A total of 17,382 children who were enrolled in the enhanced access program (intervention group) and 26,066 Medicaid-eligible children who received services from other local community primary care providers (control group) were included in the study. Children who had chronic health conditions and were receiving Supplemental Security Income benefits were excluded from this analysis. Regression analyses and t tests were applied to analyze the medical claim data that were collected for this project. Three variables were used as dependent variables to measure different aspects of the ED cost and utilization: per member per month cost, per thousand member per month encounter frequency, and per encounter cost. These variables were used to compare the intervention group with the control group for ED claims, as well as for the overall cost of care during the study period.

In the 12-month period subsequent to program initiation, the average per member per month cost for ED utilization of the intervention group was 1.36 dollars less than that of the control group. However, there was no significant difference in terms of per-visit cost related to ED utilization. Therefore, the savings seemed to come as a result of a reduction in ED visits, not from reduced cost per visit. On average, children in the intervention group visited the ED approximately 8 fewer times per thousand members per month than the control group, yet there was no significant difference in the overall (ED and non-ED) cost of care between the intervention and control groups.

Analysis from the first year of this pilot program demonstrates that by providing enhanced, coordinated, primary care access to Medicaid children, the utilization of the ED was significantly lowered among healthy children, whereas the overall cost of care remained the same.