Written by John Goodman
One of the most oft-repeated arguments for health reform is that uninsured patients make costly and delayed trips to the ER when they do not have a health plan that pays for care at physicians' offices. Insure the uninsured, it is said, and they will decrease their reliance on the ER and get prompter, less costly care elsewhere.
Yet, as an AP story reported the other day, ER traffic in Massachusetts is higher than ever before. And as I predicted at the Health Affairs Blog, the number of such visits under the new national health reform is likely to soar.
Why is that? As we pointed out in a recent National Center for Policy Analysis Brief Analysis, the use of the emergency room by uninsured patients is not that much different than usage by the insured. The heaviest users of the ER (in proportion to their numbers) are Medicaid patients, probably because Medicaid rates are so low that physicians are not anxious to see them. And the reason why that is important is that more than half of the people who gain insurance under the new health reform bill will enroll in Medicaid.
At this point, any attempt to predict what will happen is very speculative. Yet a few back-of-the-envelope calculations convince us that there is reason for concern.
Predicting Emergency Room Use Based on Change in Health Insurance Status. For ease of calculation, here are some simplifying assumptions. Suppose that 1) half the uninsured obtain insurance; 2) the newly insured enroll 50/50 in Medicaid and private plans; 3) the newly insured are representative of the uninsured population in terms of emergency room use while they were uninsured; and 4) the newly insured behave in a way similar to other enrollees in the plans they join. Under these assumptions:
In terms of the actual number of visits, insuring between 32 million and 34 million additional people will generate between 848,000 and 901,000 additional emergency room visits every year.
Predicting Emergency Room Use Based on Health Care Rationing. In general, people with insurance consume twice as much health care as the uninsured, all other things equal. The trouble is that the new health insurance law has no provision for increasing the number of health care providers. As a result, when people try to increase their use of physician services, many will be disappointed and a large number are likely to turn to the emergency room when they cannot get their needs met at doctors' offices:
Qualifications. There are a number of reasons why these estimates may err on the high side: 1) the people we call "newly insured" may be people who would have had insurance for part of the year anyway, 2) they may be sicker than the pool of uninsured that they leave or 3) they may be healthier than the pool they join. Nonetheless, it seems highly likely that emergency room visits will be substantially higher under the newly enacted health reform law than they are today.
Another possibility is that the administration will somehow be able to increase supply. At www.healthcare.gov, the administration now claims it will train 16,000 new providers by 2015. Yet Congress has never appropriated the funds to do that. In fact, all funds for training new providers were zeroed out of the Patient Protection and Affordable Care Act. (That was one of the ways Congress kept the CBO spending score as low as it was!) Apparently, HHS Secretary Kathleen Sebelius plans to use $250 million targeted for "prevention and public health" in the bill to instead train 500 physicians, 600 physician assistants and 600 nurse practitioners. Also, she plans to use an additional $500 million of "stimulus" money created under the American Recovery and Investment Act. Even so, this will fall way short of the 16,000 figure.
Meanwhile, the Association of American Medical Colleges predicts a 21,000 primary care physician shortfall by 2015, and the Health Resources and Services Administration at HHS estimates a shortage of between 55,000 and 150,000 physicians by 2020 - and that was before health care reform passed!
John C. Goodman is president and CEO of the National Center for Policy Analysis. The Wall Street Journal and the National Journal, among other publications, have called him the "Father of Health Savings Accounts," and the Media Research Center credits him, along with former Sen. Phil Gramm and columnist Bill Kristol with playing the pivotal role in the defeat of the Clinton Administration's plan to overhaul the U.S. health care system. He is also the Kellye Wright Fellow in health care. The mission of the Wright Fellowship is to promote a more patient-centered, consumer-driven health care system.
Dr. Goodman's health policy blog is the only right-of-center health care blog on the Internet. It is the only place where pro-free enterprise, private sector solutions to health care problems are routinely examined and debated by top health policy experts throughout the country-conservative, moderate and liberal.