Obamacare Has a New Problem: It Won’t Fix Emergency Rooms

Health-care reform is supposed to save money by steering poor people away from emergency rooms. But a new study shows that’s not happening—and they’re not getting healthier, either.

Proponents of the Affordable Care Act have consistently made the case that expanding access to health insurance would keep sick people out of costly and crowded emergency rooms, funneling them into primary care centers instead—and saving millions of dollars in the process.

New research, however, finds that extending health care to low-income individuals actually increases their emergency room visits—with no discernible improvement in their health.

As far back as 2010, President Obama cited decreasing emergency room visits as one of the main cost-saving goals of the health-care reform. “What happens is, you don’t have health insurance, you go to the emergency room,” he said. “You weren’t getting a checkup; something that might have been curable with some antibiotics isn’t caught. By the time you get to the hospital, it’s much more expensive…We’re a lot better off if we are making sure that everybody is getting preventive care.”

And earlier this year on the Senate floor, Majority Leader Harry Reid, a Democrat, accused Republicans seeking to repeal the health-care law of trying to “force millions of American families to once again rely on expensive emergency room care—or go without care at all.”

But this picture of insurance leading to more responsible health-care choices and better outcomes may be unrealistic.

A study from the Oregon Health Insurance Experiment, published Thursday in the journal Science found that extending Medicaid to low-income individuals increases not only their visits to primary care centers, but to emergency rooms as well.

The experiment, from the National Bureau of Economic Research, a nonpartisan research organization, was launched in 2008, and provided Medicaid benefits to a number of lottery-winning adults who were poor (with individual incomes under $10,400) but still ineligible for Medicaid. The unusual opportunity to use a randomized sample allowed researchers to identify the causal impact of Medicaid coverage on the health outcomes, financial strain, and well-being of the poor, says Sarah Taubman, one of the study’s authors.

The study’s participants mirror the expanded pool of eligible Medicaid patients under the Affordable Care Act—some 13 million with income up to 138 percent of the federal poverty level who are expected to enroll in the program by 2023, according to the Congressional Budget Office (PDF). That’s a little over half of the 25 million expected to gain insurance under the new law.

The study’s authors compared administrative records from about 25,000 near-poor individuals with and without Medicaid access and found that those with insurance ended up in the emergency room 40 percent more than their uninsured counterparts. Moreover, most of these visits were classified as “primary care treatable”—i.e., not warranting emergency treatment.

The findings, Taubman says, are consistent with the standard economic prediction that insured people are likely to take advantage of those benefits. “Insurance pays for emergency department care, and so individuals who have insurance will use more care than they would if they face the full cost,” she says.

More surprising than the increased likelihood of insured patients using the ER as primary care is the negligible effect Medicaid had on the health of poor beneficiaries. Records show no improvement in tests for easily-managed medical conditions including hypertension, diabetes and cholesterol among the insured. These findings echo previous reports from the experiment that saw “no significant improvements in measured physical health outcomes,” but did show an increase in the use of health-care services and lower rates of depression and financial strain on the patient—not surprising when the average emergency room visit costs about $1,000 for an adult.

The Medicaid population is expanding at a time when the general strain on the nation’s emergency care facilities is both growing and used disproportionally by Medicaid patients (They made up a third of emergency room visitors (PDF) in 2010 but make up just 16 percent of the population). And while 38 percent of adult Medicaid patients had at least one emergency department visit in the past year, only 16 percent of the privately insured and 21 percent of the uninsured made similar visits. The visits of Medicaid patients are also more likely to be classified as non-emergencies.

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Since the signing of the Affordable Care Act, the law’s critics have been sounding the alarm about both a shortage in primary care physicians and crowding in emergency departments. Though the Centers for Disease control currently classify the demand for ER services as “stable”—20 percent of Americans visited one in 2011—the total rate of visits has increased 16 percent in the last 15 years while the supply of facilities has fallen 11 percent in the same time period.

The Oregon experiment is only the most recent in a mixed body of research looking for a link between expanded health care and emergency room utilization. An earlier study from the Robert Wood Johnson Foundation found no change in ER usage after the 1997 enactment of the Children’s Health Insurance Program (CHIP), the last major insurance expansion.

Other studies showed the rate of emergency room visits was either reduced or unchanged after near-universal health care was adopted in Massachusetts in 2004.

It’s important to note that the Oregon experiment simply gave poor people insurance. Though the access opened up avenues of care aside from the ER, where patients know they can’t be turned away, it didn’t include any other component to dissuade the use of emergency facilities in place of traditional doctors’ offices or to educate the low-income participants on their new options. The Affordable Care Act has provisions that address these concerns (PDF), such as a 73-percent boost in payments to doctors who treat Medicaid patients, an $11 billion fund that supports local health centers, and programs that train and retain health-care professionals in underserved areas. But it is yet to be seen whether those policies counteract the strong pulls of ingrained habit and abject poverty, a condition that studies have shown can affect a person’s ability to make good long-term decisions.

While the lack of evidence that Medicaid will improve the health of the poor may bolster arguments on the right that the Affordable Care Act does more disruption than good, Taubaum notes that insurance isn’t necessarily meant to be a metric of or means to health, regardless of the increased care argument made in favor of Medicaid expansion.

“At its core, the original argument for health insurance is about financial coverage. Similarly you might have homeowner’s insurance so that if your house burns down, you’re financially protected from that, but it wouldn’t prevent the fire,” she says.