How Much Does Emergency Department Use Affect the Cost of Medicaid Programs?

ED expenses are a relatively small percentage of total medical spending by Medicaid enrollees. An aggressive policy to cut ED expenditures by 25% would reduce Medicaid expenditures by less than 2% per year. Actual savings would be even smaller if reduced ED utilization were offset by increased spending at the primary care level. Because the majority of Medicaid patients do not use the ED in a given year, efforts to reduce ED expenditures may be best accomplished through targeting selected enrollees who have high ED expenditures, rather than attempting to decrease overall ED use.