Friday, January 3, 2014

Obamacare and the ER

Obamacare is a gift that keeps on giving. The failed website was only the prelude. Built on a foundation of  misrepresentations, miscalculations and  outright lies Obamacare is fast becoming one the greatest policy failures in American history.

Yesterday, a study of Oregon demonstrated that one of the analytic bases for the law— namely, that people with health insurance would make fewer visits to emergency rooms— is flat-out wrong. Giving poor people more insurance produces more ER visits. Better yet, it makes for a lot more ER visits. Since Obamacare’s champions all used this talking point to explain how the program would reduce the cost of healthcare, it’s a big (f***ing) deal.

Supporters of President Obama’s health care law had predicted that expanding insurance coverage for the poor would reduce costly emergency room visits because people would go to primary care doctors instead. But a rigorous new experiment in Oregon has raised questions about that assumption, finding that newly insured people actually went to the emergency room a good deal more often.

The study, published in the journal Science, compared thousands of low-income people in the Portland area who were randomly selected in a 2008 lottery to get Medicaid coverage with people who entered the lottery but remained uninsured. Those who gained coverage made 40 percent more visits to the emergency room than their uninsured counterparts during their first 18 months with insurance.

The pattern was so strong that it held true across most demographic groups, times of day and types of visits, including those for conditions that were treatable in primary care settings.

The findings cast doubt on the hope that expanded insurance coverage will help rein in emergency room costs just as more than two million people are gaining coverage under the Affordable Care Act. And they go against one of the central arguments of the law’s supporters, that extending insurance to large numbers of Americans would reduce emergency room use, and eventually save money.

In remarks in New Mexico in 2009, Mr. Obama said: “I think that it’s very important that we provide coverage for all people because if everybody’s got coverage, then they’re not going to the emergency room for treatment.”

Perhaps the experts simply miscalculated. Perhaps they believed what they were saying. Perhaps they believed that the argument was persuasive, so they presented it, regardless. Perhaps it just goes to prove that experts should not be trying to control complex markets.

In fairness, the Times did offer some alternate explanations for the phenomenon.

The first, from Econ 101:

When services get less expensive, people use them more. Previous studies have found that uninsured people face substantial out-of-pocket costs that can put them in debt when they go to the emergency room. Medicaid reduces those costs.

Medicaid coverage also reduces the costs of going to a primary care doctor, and a previous analysis of data from the Oregon experiment found that such visits also increased substantially.


Some experts noted that the study measured only the first 18 months after people gained coverage, and that old habits of relying on the emergency room are often hard to shake. It also takes time to find a primary care doctor and make an appointment.

But, on the other hand:

Heidi Allen, an assistant professor at Columbia University and an author of the study, said much of the non-urgent emergency department use among patients she interviewed happened because those patients could not get same-day appointments with their primary care doctors.

Put all this information on Obamacare’s account. Apparently, it is not going to reduce the nation’s healthcare expenditures any time soon.

[Addendum: More on the confusion that Obamacare has produced, via, The Daily Mail.]


Sam L. said...

People with no experience constructed a framework with certain expectations (other than those they disregarded or thought unlikely) because they WERE the smart people. They just had no idea how ignorant they were, or how intent others can be to game the system, find the loopholes, and worm their way in.

Sweating Through Fog said...

I'm glad I found your blog.

Regarding costs and ER visits: It's curious that we were told that one of the reasons medical costs were so high is that the poor would visit ERs, and then not pay their bills, shifting costs to others.

Now we're told that those same poor people will, after Obamacare, happily pay for ER and doctor visits, and enthusiastically pay the full cost for those services before they meet deductibles amounting to thousands of dollars per year.