Why the Oregon Medicaid Study Doesn’t Matter As Much As You Think

2014 has dawned, and with it more than 2.1 million people have new health insurance under the Affordable Care Act. This, as they say, is where the rubber meets the road. But a new study out of Oregon is challenging a key argument for extending health insurance to millions: that doing so will reduce costly emergency room visits.

The study in question showed that when health insurance was extended to Oregon residents who didn’t previously have it, they actually used the emergency room more – not less. This is the exact opposite of what many had predicted. 

As the leader of an emergency medicine physicians group, this question of whether ER volume will increase or decrease as more people gain health insurance is absolutely essential for us. It’s also essential for hospital leaders, who are making decisions about where to invest in expansion of services and where to plan for a retrenchment.

The Oregon Medicaid study suggests an answer, but for my money, I’m betting on a slight bump in ER volume, followed by a general and persistent decline.

The truth is that the Oregon study – i.e. the importance of newly insured patients as it pertains to ER volume – may not be as determinative as you’d think. It’s try, in Oregon, the expansion of Medicaid at the state level encouraged people who formerly had no access to care to seek that care as quickly as possible. I fully expect this result to be replicated in other states in the near future, particularly the ones that have expanded Medicaid.

Meanwhile, newly insured patients facing high deductibles will face an opposing incentive to actually seek lower cost care. The rise of high-deductible plans that incentivize patients to shop around for their care and consider their care decisions more carefully has already been impacting the market for years. Which incentive is more powerful may depend on the availability alternatives to the ER, such as access to primary care.

This is likely a good thing for our healthcare system. A patient should think twice about the need for any care, including emergency care. Can I wait a day or two to see if this fever resolves and cough goes away or do I need to go, right now, to be seen? These are decisions that informed patients make when their dollars are at risk.

In the long run, I predict this shift along with others, including changing incentive structures for hospitals, will mean lower emergency room volume. In other words, the Oregon study may accurately predict a bump in ER use, but ultimately larger forces will combine to drive down ER volume.

2014 brings a brave new world to our healthcare system. And as the Chinese proverb says, may you live in interesting times.