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January 3 2014

O-Care's Emergency Room Flub

Patrice J. Lee

Back in 2009, President Obama touted his healthcare reform plan as an answer to the problems with our healthcare system. We are now learning about yet another of those selling points that doesn’t appear to have been true, and in fact reality is turning out to be the opposite of what was promised.

No we don’t mean his broken promises (i.e., lies) that Americans could keep their healthcare plans and doctors and your medicine if you liked them. Today we’re also seeing the falsity of the president’s claim that expanding healthcare coverage for the poor would reduce expensive emergency room visits because newly insured patients would now go to their primary care doctors instead.

Oregon put this to the test and found the opposite. In an experiment of newly covered patients, they made significantly more visits to the emergency room. This doesn’t bode well for what was a central argument of the law’s supporters and indicates that the surge in newly insured will add pressure on emergency rooms (at least in the short run).

The Washington Post reports on the findings of this study:

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.

The study suggests that the surge in the numbers of insured people may put even greater pressure on emergency rooms, at least in the short term.

The impact of emergency room service use on overall healthcare costs has been overblown. According to a government health survey, it only accounted for four percent of total health spending in 2010 compared with inpatient hospital visits that accounted for about a third of costs. So POTUS sold many on ObamaCare using a smoke-and-mirrors trick to magnify what is really a minor problem.

Should we be surprised? Not anymore.

This story highlights truths about human behavior that technocrats in Washington, who like to try their hand at social engineering, are learning the hard way. Policy changes lead to unintended consequences because people respond to incentives – sometimes in ways that can’t be predicted.

This behavior wasn’t so unpredictable though. MIT economists note that when services get less expensive, people use them more. That’s actually a very basic economic principle about price and demand. When my favorite store has a sale, I certainly hit the racks to buy what I would not have afforded to purchase without the price drop.

It will take time to see if people’s use of emergency care will change once they adjust to having coverage and access to a primary care doctor.

However, the limited number of doctors under ObamaCare will setup an interesting challenge. If getting appointments with your doctor becomes so competitive that it puts your health at risk, your next best option may be right back in the emergency room.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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