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Do newly insured Medicaid recipients make more use of costly ER services? [UPDATED]




Dr. Martha Perez examines Maria Lebron in a room at the Community Health of South Florida, Doris Ison Health Center on February 21, 2013 in Miami, Florida.
Dr. Martha Perez examines Maria Lebron in a room at the Community Health of South Florida, Doris Ison Health Center on February 21, 2013 in Miami, Florida.
Joe Raedle/Getty Images

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New results released from the Oregon Health Insurance Experiment — a study of people who received healthcare coverage via lottery in 2008 — has put into question the Obama administration’s assertion that expanded Medicaid would reduce emergency room visits.

The study, which because of the lottery had a large control group of uninsured who were not selected, found an almost 40 percent relative increase in emergency room use for those newly receiving expanded Medicaid.

But preliminary results from a study of expanded coverage of the poor in California suggests that the spike in ER usage may be short lived.

Many counties, including L.A., participated in a program under Obamacare that allowed them to get several hundred thousand poor and uninsured people health coverage as early as 2010. As of New Year’s, those people moved from that program -- called Healthy Way L.A. locally – onto Medi-Cal.

UCLA’s Center for Health Policy Research has been studying the program. It used a different methodology than the Oregon study, since it did not have a control group. Researcher Dylan Roby says preliminary results show that in the California program’s first year, emergency room use spiked much the way it did in Oregon. But in the second and third years, "we’ve seen a reduction that’s quite substantial."

Roby says one explanation for the initial jump in ER use is pent-up demand: Once insured, these patients rushed to emergency rooms to take care of ailments they had put off treating because they didn’t have insurance.

Roby says ER visits diminished in the second and third years of the program because counties took on an important task: "They were redirecting them from the ER into primary care."

Yevgeniy Feyman, Fellow at the Center for Medical Progress at the Manhattan Institute, points out that not all analysts agree with the pent up demand theory. Still, Roby suggests that because Oregon only followed its Medicaid recipients for about a year on average, it did not follow them long enough to see a drop-off in ER use.

Oregon study co-author Katherine Baicker says it looked at a lot more than just ER use among new Medicaid recipients. For one thing, Baicker found new Medicaid patients had greater financial security – they were less likely to have to skip paying other bills to cover medical costs.

In addition, "we found that there was a dramatic improvement in mental health," says Baicker. "There was a drop in depression of about 30 percent. People were also more likely to get access to preventive care, describe their care as high quality, [and] have a doctor who’s their doctor."

Baicker says policy makers should consider these benefits as well as the costs in making decisions about expanding Medicaid.

Guests:

Katherine Baicker, PhD, Professor of Health Economics at the Harvard School of Public Health and co-author of “Medicaid Increases Emergency-Department Use: Evidence from Oregon's Health Insurance Experiment.”

Dylan Roby, Director of Health Economics and Evaluation Research at the UCLA Center for Health Policy Research

Yevgeniy Feyman, Fellow at the Center for Medical Progress at the Manhattan Institute