Giving people Medicaid doesn’t reduce their number of ER visits
According to a study of the Medicaid expansion program in Oregon, giving people Medicaid appears to increase their ER use, rather than decreasing it as Obamacare proponents had predicted.
Why on earth would this be any sort of surprise? I know, I know: the idea was that people without health insurance or Medicaid go to the ER so often because the law requires them to be treated there and they have no alternatives; if they were covered for doctor visits, the argument went, they would prefer to do that instead. But what the study found was that people who were newly-covered by Medicaid used both resources more, which makes perfect sense because, as Megan McArdle points out, “when you reduce the price of something, people usually want to consume more of it.”
Not only are they consuming ER visits at a faster clip, but they are consuming them more for lesser ills rather than greater ones. McArdle wrote “reduce the price,” but unless I’m mistaken, Medicaid doesn’t just reduce the price, it mostly eliminates it for the recipient as far as ER visits go. Any health care system involving no payments at all must do one of two things to keep cost and usage down: ration care, and/or start requiring co-pays of some sort.
Those who theorized otherwise were either just saying what they needed to say to pass the law, or truly believed that people would act in ways that they considered “rational” and reduce their ER use, preferring doctor visits and preventive care. But there’s nothing in the current Medicaid system (at least, not so far as I know) that incentivizes doctor visits over ER visits. In fact, I can think of a couple of things that do the opposite: it may be hard to get a doctor to accept Medicaid at all, and even if he/she does accept it there’s usually a wait to get an appointment, whereas an ER may make you wait a few hours but they will see you that day.
What’s even more important is a fact that’s become a bit lost in the shuffle, but which first came out last May in another study of the Oregon Medicaid-expansion situation (I wrote about it here): the Medicaid expansion didn’t appear to improve the new recipients’ health, either, in terms of basic markers such as blood pressure and cholesterol. McArdle points this out, too, “Only two large-scale random tests have ever been done on health insurance, and both have come back with the same surprising result: giving people Medicaid, or more generous health insurance, doesn’t seem to significantly improve clinical measures of good health.”
And yet health economist Jonathan Gruber, who was one of the Obamacare “architects,” had this to say in response to the Oregon study report on Medicaid and ER use:
I would view it as part of a broader set of evidence that covering people with health insurance doesn’t save money…That was sometimes a misleading motivator for the Affordable Care Act. The law isn’t designed to save money. It’s designed to improve health, and that’s going to cost money.
I don’t know whether Gruber himself was originally citing the “misleading motivator” of cost-saving back in the build-up to the passage of Obamacare. But I do recall—despite Gruber’s use of the passive voice in the quote above—that Obama and the Democrats were certainly touting cost-saving. However, Gruber’s emphasis on “improving health” is probably a “misleading motivator” as well.
[Neo-neocon is a writer with degrees in law and family therapy, who blogs at neo-neocon.]
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