Least Surprising Health Research Result Ever: Medicaid Increases ER Use

Medicaid is a welfare program jointly funded by federal and state governments, which claims to provide health insurance to low-income people.

A few years ago, Oregon expanded Medicaid enrollment by lottery. This created an excellent environment to study the effects of being uninsured versus being enrolled in Medicaid, because it approximated a randomized-controlled trial — the gold standard of medical research, but seldom conducted in the social sciences.

The latest result of the study, published in Science, reported that Medicaid increased use of emergency rooms by 40 percent (gated abstract here, and reported here).

This result is important for anticipating the consequences of Obamacare. About half of the 30-plus million people expected to get health insurance under Obamacare will be enrolled in Medicaid, not private health insurance. Already, the administration asserts that four million new Medicaid enrollees have signed up via Obamacare (but this estimate has been questioned).

Nobody should be surprised: Despite politicians’ assertion that Medicaid coverage increases the likelihood of using primary care rather than an ER, the evidence points clearly to the contrary. For example, in Massachusetts, ER use soared by 17 percent two years after Gov. Romney’s law mandating insurance coverage came into effect.

Back in 2010, John Goodman wrote a brief, which showed that uninsured people comprise the smallest share of ER patients under age 65. Medicaid enrollees are the largest share, followed by the privately insured. Goodman predicted that Obamacare, by reducing the number of uninsured people, would increase the number of ER visits by about 40 million annually.

Nor is this a uniquely American phenomenon. When so-called “universal” coverage was imposed North of the border, similar results occurred.

Exhibit A: An article from 1973 reports a survey of Montreal households conducted over 12 months in 1969 and 1970, just before universal coverage was imposed by the provincial government of Quebec in 1971. The survey concluded that higher-income households used more medical services than lower-income households did. Furthermore, four-fifths of ER visits were for non-urgent reasons.

Sounds like those folks needed “universal” coverage, right? Wrong.

Exhibit B: The same authors published a subsequent article in 1978, which reported that ER visits increased by 14 percent annually in the five years after “universal” coverage versus 7 percent in the five years prior. Before “universal” coverage, 33 percent of patients surveyed had attempted to contact a physician before going to the ER and 63 percent were successful. After “universal” coverage, 39 percent of patients had attempted to contact a physician but only 38 percent were successful. Most of the increase in coverage happened through the ER, not primary-care doctors.

Almost four decades later, the United States is learning the same lesson — or not.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.

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