More money could result in fewer trips to the emergency room, research suggests

Giving cash to poor people could result in fewer emergency room visits, a new study suggests.

The research was published on Monday in the Journal of the American Medical Association looked at nearly 2,900 low-income people who signed up for a lottery in the Boston suburb of Chelsea, Massachusetts. Nearly 1,750 of them received up to $400 per month from November 2020 to August 2021.

The researchers then looked at health records and found that those who received the money had 27% fewer emergency room visits over the nine-month period compared to those who did not receive the monthly payments.

“We can trust the poor with money,” says co-author Dr. Sumit Agarwal, physician at Brigham and Women’s Hospital in Boston. “There’s this narrative that you give people money and they spend it on drugs and alcohol. I think we’re one of the first studies to really rigorously and empirically show that that’s not the case.”

The correlation between poverty and poor health outcomes is well established. But it’s still unclear whether increasing basic income in the US could improve health outcomes.

People in the study who received money were less likely to use the emergency room for medical problems related to behavioral health and substance use. There were no significant differences between the two groups in regular doctor visits or prescriptions, the researchers found, although people with the extra income used more outpatient specialty care.

The cash recipients’ financial stability seemed to reduce their stress levels, which overall improved their health, leading to fewer emergency room visits, Agarwal said.

Previous studies of income support have shown modest (or no) effects on health, according to the authors, because they largely looked at one-time payments, had fewer participants and relied on self-reported data.

The Chelsea study, on the other hand, uses administrative health data and takes into account a longer time frame, which Agarwal says paints a “complete picture.”

Sara Rosenbaum, of George Washington University’s School of Public Health and Health Services, was not involved in the study. She said the study appears to be one of the first papers to link the health benefits of higher income over time to a reduction in health care costs and expenditures.

The lottery was originally intended to alleviate overhead costs for residents of Chelsea, a densely populated city with many low-income immigrants. The city was particularly affected by the COVID-19 pandemic, said then-city manager Tom Ambrosino.

“We came up with this plan to just give people money,” he said. ‘Give them a debit card. Fill it with cash, and it will be so much easier and more dignified for the people.”

Ambrosino thought the program, which he said would cost the city about $700,000 a month, would have positive effects, but he didn’t expect the direct impact on health.

“I was somewhat pleasantly surprised,” he said. “It supports the argument that universal basic income programs work and are not wasteful. People spend money on the things we want them to spend money on: essentials.”

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