Medicaid Increases Emergency-Department Use: Evidence from Oregon’s Health Insurance Experiment

By Sarah L. Taubman, Heidi L. Allen, Bill J. Wright, Katherine Baicker, Amy N. Finkelstein

Science, Published Online January 2, 2014


In 2008, Oregon initiated a limited expansion of a Medicaid program for uninsured, low-income adults, drawing names from a waiting list by lottery. This lottery created a rare opportunity to study the effects of Medicaid coverage using a randomized controlled design. Using the randomization provided by the lottery and emergency-department records from Portland-area hospitals, we study the emergency-department use of about 25,000 lottery participants over approximately 18 months after the lottery. We find that Medicaid coverage significantly increases overall emergency use by 0.41 visits per person, or 40 percent relative to an average of 1.02 visits per person in the control group. We find increases in emergency-department visits across a broad range of types of visits, conditions, and subgroups, including increases in visits for conditions that may be most readily treatable in primary care settings.

From the Discussion

These findings speak to one cost of expanding Medicaid, as well as its net effect on the efficiency of care delivered, and may thus be a useful input for informed decision-making balancing the costs and benefits of expanding Medicaid.

How Obamacare will change the emergency room

By Dan Gorenstein

Marketplace, January 2, 2014

And the report already has pundits worked up, especially with 9 million Americans projected to newly sign up for Medicaid this year under the Affordable Care Act.

The reason this is so hot – at least politically – is because the report over turns conventional healthcare thinking. Harvard health economist Amitabh Chandra describes the theory.

“If we insure the uninsured, they are not going to use the emergency room and they are going to use less healthcare. So in the long run, insuring the uninsured saves us money,” says Chandra.

Affordable Care Act advocates have used this argument to say insurance should be expanded.

There’s just one thing: that’s not what happens.

“Its basic economics that I would teach my students,” says MIT economist Amy Finkelstein – one of the report’s authors.

“When you lower the price of something, people buy more of it,” says Finkelstein. “That’s true of apples and bananas and it turns out it’s true of healthcare too.”

Co-author Katherine Baicker says… “That doesn’t mean that it’s inefficient, good or bad. It just means that insurance makes healthcare more affordable, and that has both financial consequences and health consequences.”

Perhaps most important, Harvard’s Amitabh Chandra says when it comes to money, this isn’t where the action is.

“The spending is not in the emergency room. The spending is on high cost patients. These are cancer patients. Many of them in the end of life,” he says.

Chandra says it would be easy to use this report and argue that the Affordable Care Act is too costly.

He says the big question – the tough question – is how to limit the care everyone agrees is inefficient and expensive, regardless of who gets it or where that care is received.…

New Oregon Data: Expanding Medicaid Increases Usage Of Emergency Rooms, Undermining Central Rationale For Obamacare

By Avik Roy

Forbes, January 2, 2014

(The authors) found that those on Medicaid used the emergency room 40 percent more than the uninsured did—1.43 ER visits per Medicaid enrollee, as against 1.02 for the uninsured. More to the point, a majority of the emergency room visits were unnecessary, because they involved conditions that could easily have been managed outside of the ER.

Because Medicaid was nearly free to the program’s enrollees, those enrollees ended up seeking—and receiving—lots of inappropriate care. That led to massive cost overruns that, even today, are bankrupting state governments. The one thing they have been able to do is pay doctors and hospitals less and less to provide the same care.

That trend, in turn, has led many doctors to stop accepting new Medicaid patients. So it’s extremely difficult for Medicaid enrollees to get appointments with primary care physicians. They have to spend weeks on the phone to find someone who will treat them.

Put yourself in the shoes of that Medicaid enrollee. Why would you bother calling primary care docs all day and all week, if you can go to the emergency room and get the same care for the same price? So that’s what Medicaid patients do.

Many hospitals say that they lose money on every Medicaid patient they see. But somehow, if we have more Medicaid patients, taxpayers will be better off?

It was bunk in 2009, and it’s bunk today. It’s why the states that have chosen to forego Obamacare’s Medicaid expansion were wise to do so…

National Study of Health Insurance Type and Reasons for Emergency Department Use

By Roberta Capp MD, MHS, Sean P. Rooks BA, Jennifer L. Wiler MD, MBA, Richard D. Zane MD, Adit A. Ginde MD, MPH

Journal of General Internal Medicine, December 2013


We evaluated the association between health insurance type and self-perceived acuity or access issues among individuals discharged from the ED.

Key Results

Overall, 65.0 % of adults reported ≥ 1 acuity issue and 78.9 % reported ≥ 1 access issue. Among those who reported no acuity issue leading to the most recent ED visit, 84.2 % reported ≥ 1 access issue. Relative to those with private insurance, adults with Medicaid (OR 1.05) and those with Medicare (OR 0.98) were similarly likely to seek ED care due to an acuity issue. Adults with Medicaid (OR 1.50) and Medicaid + Medicare (dual eligible) (OR 1.94) were more likely than those with private insurance to seek ED care for access issues.


Variability in reasons for seeking ED care among discharged patients by health insurance type may be driven more by lack of access to alternate care, rather than by differences in patient-perceived acuity. Policymakers should focus on increasing access to alternate sites of care, particularly for Medicaid beneficiaries, as well as strategies to increase care coordination that involve ED patients and providers.

There has been extensive media coverage of this new study which confirms that uninsured individuals who become covered under the Medicaid program will increase their use of Emergency Department (ED) services. Is this good or bad? Conservative physician/columnist Avik Roy writes, “It’s why the states that have chosen to forego Obamacare’s Medicaid expansion were wise to do so.” Really? Let’s try to make some sense of this.

Medicaid patients have learned that access to care is impaired because far too many physicians refuse to accept patients who are on this program. Patients have also learned that they will be seen when they present themselves to the ED, and that they won’t have to pay for the care because of their Medicaid coverage. Even Avik Roy concedes that.

The study by Roberta Capp et al shows that all patients, including Medicaid patients, who perceive the acuity of their condition to warrant ED services will go to the ED for care. Yet Medicaid patients who have impaired access will also use the ED simply because of the access issues. This applies as well to dual eligible patients who have both Medicare and Medicaid, indicating that Medicare patients stigmatized with Medicaid will also have impaired access, except in the ED.

Clearly, the problem is with inadequate access to primary care within the community, largely because of the refusal of too many physicians to accept Medicaid as a payment source.

What does this greater use of EDs do to health care costs? Harvard’s Amitabh Chandra says, “The spending is not in the emergency room. The spending is on high cost patients.” Although many state that ED costs are too high to warrant providing ED care for these patients that should have been served by primary care professionals within the community, in fact it is only the ED prices that are high, and Medicaid doesn’t pay those high prices anyway. The actual marginal costs for taking care of these low acuity patients are almost negligible.

There are some obvious solutions to this problem. The most important is to establish a single payer system so that patients are not sorted out by their payment source. Along with that it is crucial to reinforce the primary care infrastructure so that access is always available. For night and weekend hours, the ED could serve a triage function with primary care services being provided as a community service. If that would overload the ED staff, the community physicians could rotate weekend and night call to back up the ED staff for these lower acuity problems. Also, free standing 24 hour clinics could be established, though in most communities a triage function in the ED would be more appropriate.

What we don’t need is more blaming the victims – condemning Medicaid patients who “overuse” EDs, when they are simply trying to access care that they should have. We also need physicians with a heart, but, unfortunately, medical schools don’t seem to include that requirement amongst their admissions criteria.