Study: Medicaid tied to increased ER visits

Latest findings not all that surprising to economists.

When a provocative study showed that expanding Medicaid increased trips to the emergency room two years ago, some supporters of health reform were disappointed and hoped that it would prove to be only a temporary spike.

After all, the findings — based on Oregon’s expansion of Medicaid in 2008 — challenged the key assumption that low-income people who gained insurance coverage would go to primary care doctors instead of relying on emergency rooms. Critics of the law pointed to the study as evidence that the states that expanded Medicaid under the Affordable Care Act were making a mistake.

The surge in emergency room visits wasn’t temporary, at two years and counting, according to a new study led by researchers at the Massachusetts Institute of Technology.

“I think it’s yet another example of why economists (are) called the dismal science for a reason. There’s no free lunch,” said Amy Finkelstein, a professor of economics at MIT. “We see the increase of utilization doesn’t show any time pattern. It just seems to persist over the two years.”

Finkelstein is drawing on an unusual opportunity in health care policy: a true experiment that occurred in 2008, when Oregon expanded Medicaid to people on a waiting list through a randomized lottery. That randomization allowed researchers to compare people who got coverage with those who did not.

According to the new study, people who gained Medicaid visited the emergency room about 65 percent more often than individuals who did not gain Medicaid in the first six months — and the trend continued out to two years. The estimates of increased emergency department use at 12 months, 18 months and 24 months are “similar and, for the most part, statistically indistinguishable from each other,” the authors wrote.

People covered by Medicaid were more likely to both see a physician at a regular office visit and also go to the emergency room, casting doubt on the idea that people were using health coverage to shift their health care to a primary care doctor.

Michael Strain, an economist at the American Enterprise Institute, said the findings support the idea that the increased emergency department use wasn’t just an implementation effect and adds to the case that Medicaid needs to be reformed.

“There’s always been this kind of assumption that there’s this pent-up demand for primary care, and if only people had insurance to receive primary care they would get it,” Strain said, pointing out that many primary care doctors don’t even accept Medicaid. “I do think that this suggests our Medicaid program isn’t what we would hope it would be.”

To economists, these results haven’t actually been all that surprising. Making something free — in this case, emergency room visits — often means people will use more of it.

Other research has found different effects. A Health Affairs study published in August found that expanding Medicaid did not increase emergency room visits overall, but who paid for them did shift. In 2014, visits by Medicaid patients increased while uninsured visits decreased, according to the study.

Ezekiel Emanuel, a top White House health policy adviser during Obama’s first term now at the University of Pennsylvania, said the best way to reduce emergency room visits would be to change how health care is paid for. He pointed to a program in Seattle in which home health care workers faced an increased copay for using an emergency room, compared to urgent care.

Changing payment systems, he argues, can incentivize doctors and patients to act differently. Right now, those incentives don’t exist and the system is built so that No minimum purchase! the path of least resistance for many patients may be the emergency room.

Emanuel was especially struck by a quote in the study from a patient who was sent to the emergency room by a doctor: “Your blood sugar is way too high. It’s going to take us hours to get it down. So you need to go to the ER,” the patient reported being told during a regular office visit.

“We have a system that hasn’t actually changed, both on the physician side and on the patient side, and I think that’s what we’re seeing here,” Emanuel said.

‘We have a system that hasn’t actually changed, both on the physician side and on the patient side, and I think that’s what we’re seeing here.’