Substance Use Treatment Provider Behavior and Healthcare Reform: Evidence from Massachusetts

Major expansions of health insurance coverage provide new revenue opportunities for safety-net providers, but may also create new capacity pressures for these providers. We examine the impact of the 2006 Massachusetts healthcare reform on substance use disorder (SUD) treatment - a type of safety net healthcare – providers' behaviors using a differences-in-differences design. We test whether the reform influenced admissions, daily censuses (the number of clients in treatment on a given day), services offered, and accepted forms of payment. Our findings suggest that Massachusetts providers altered their care practices following the reform. Admissions increased by 17.1% and daily censuses increased by 4.7%. The number of services offered increased by 3.5%, programs for special populations decreased by 24.1%, and use of pharmacotherapies increased by 11.3%. Massachusetts providers increased acceptance of private insurance increased by 2.7%. We find that such providers were less likely to accept self-pay (1.7%) and provide uncompensated care (1.4%). Responsiveness was generally greater for for-profit than nonprofit providers. These findings suggest that, following major healthcare reform, Massachusetts SUD treatment providers absorbed a larger number of individuals seeking treatment, but effects on quality of care were somewhat mixed and individuals without insurance may have experienced difficulty in accessing care.