Anticipating Medicaid Expansion’s Impact on Psychiatric Hospitalizations

At the dawn of the new year (Jan. 1, 2019), many more low-income Virginians will be eligible to enroll in the Commonwealth’s Medicaid health care coverage program, which is jointly funded with federal and state dollars. Expanded Medicaid eligibility means as many as 400,000 more Virginians will qualify for health insurance, including some who are dealing with mental illness. In a hospital setting, psychosis, alcohol or drug dependence, or depression are the most common mental illnesses among patients seeking treatment (see Table 1 below). Following childbirth, psychosis is the second most common diagnostic-related group for which a patient seeks hospital care. Looking ahead to January when new coverage commences, it is reasonable to wonder whether newly covered adults will drive an increase in hospitalizations, and if so, might such a trend have an impact on specific hospital services. To examine this question, it is important to assess the potential mental health treatment needs of adults in the newly covered population. Statistically speaking, mental illness diagnoses are most prevalent in people ages 18-44.These are also the years when people are expected to be most economically productive. Yet data tell us that about half of the patients diagnosed with a mental illness will experience sustained unemployment.1 Medical needs related to pregnant women who suffer from drug dependency, which can be passed to a developing infant in the womb, are another factor to consider. This is a growing health challenge: the number of babies born with the drug-exposure-withdrawal condition known as neonatal abstinence syndrome (NAS) doubled from 2012-2017.2 While Virginia has had some small-scale success with specific programs authorized by federal waivers, widespread options for treatment of psychoses, drug addiction, mood disorders, and related conditions among disadvantaged populations have historically been limited in the Commonwealth. In many cases, the default has been to admit to a hospital patients demonstrating behavior that poses a threat of harm to themselves or others (this includes overdoses, suicide attempts, and violent behavior, among other conditions). As a result, patients experiencing mental health crises frequently visit hospital emergency departments, which in turn admit those whose condition is serious enough that they can’t be discharged without supervision or treatment. Many of these situations are commonly referred to as provider of “last resort” care. Limited patient options for mental health ambulatory care have been an issue that complicates discharge. Psychiatric illness is a chronic condition that often requires long-term ambulatory support, treatment, and medication monitoring. Enhanced access to health insurance means more Virginians suffering with behavioral health conditions should be able to seek and receive needed care. One possible byproduct of improved access to care is the potential for reduced hospitalizations associated with patients who experience recurring bouts of self-destructive behavior. Successful ambulatory care helps patients better manage their mental needs so they can function in society. Over time, it is reasonable to expect that investments in ambulatory coverage can help reduce hospitalizations. Moving ahead, VHHA will monitor these diagnoses and track the effect of coverage expansion on psychiatric hospitalization trends. (10/19)

1 http://www.vhha.com/research/2015/08/07/psychiatric-diagnoses-that-result-in-the-most-hospital-admissions/

2 http://www.vhha.com/research/2018/09/28/nas-births-remain-elevated-halfway-through-2018/

Table 1. Number of Mental Health and Substance Abuse Diagnostic Related Grouping (DRG) Hospitalizations by Year

Source: VHHA Inpatient Database, second quarter 2018