Giving poor people money could result in fewer emergency room visits, a new study suggests.
The study published Monday in the Journal of the American Medical Association looked at nearly 2,900 low-income people who signed up for the 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 analyzed 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,” said co-author Dr. Sumit Agarwal, a physician at Brigham and Women’s Hospital in Boston. “There is a narrative that you give people money and they spend it on drugs and alcohol. I think we are one of the first studies to really rigorously and empirically show that this is 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 U.S. could improve health outcomes.
People in the study who received money used the emergency room less for medical issues 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 additional income utilized more specialized outpatient care.
The financial stability of the money’s recipients appeared to lower their stress levels, which generally improved their health, leading to fewer emergency room visits, Agarwal said.
Previous studies on income support have demonstrated modest — or no — health effects because they largely looked at one-time payments, had fewer participants and relied on self-reported data, according to the authors.
In contrast, the Chelsea study uses administrative health data and took a longer time period into account, which Agarwal said paints a “more complete picture.”
Sara Rosenbaum of the George Washington University School of Public Health and Health Services was not involved in the study. She said the research appears to be one of the first papers to link the health benefits of higher income over time to a reduction in healthcare costs and spending.
The lottery was originally planned to alleviate overhead costs for residents of Chelsea, a densely populated city with many low-income immigrant residents. The city has been particularly hard hit by the COVID-19 pandemic, said then-City Administrator Tom Ambrosino.
“We created this plan just to give people money,” he said. “Give them a debit card. Load it with money and it will be much easier and more dignified for people.”
Ambrosino estimated that the program, which he said cost the city around $700,000 a month, would have positive effects, but he did not expect the direct impact on health.
“I was pleasantly surprised,” he said. “This supports the proposition that universal basic income programs work and are not wasteful. People spend money on what we want them to spend it on: the essentials.”
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