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CAMBRIDGE, Mass. — Adults who are covered by Medicaid use emergency rooms 40% more than those in similar circumstances who do not have health insurance, according to a new study co-authored by an MIT economist that sheds empirical light on the inner workings of health care in the United States.
The study takes advantage of Oregon's recent use of a lottery to assign access to Medicaid, the government-backed healthcare plan for low-income Americans, to certain uninsured adults. The research examines emergency room records for roughly 25,000 people for a period of 18 months.
"When you cover the uninsured, emergency room use goes up by a large magnitude," said Amy Finkelstein, the Ford Professor of Economics at MIT and a principal investigator of the study, along with Katherine Baicker, a professor at the Harvard School of Public Health.
The study, which was published Thursday in the journal Science, also documented that having Medicaid consistently increases visits to the emergency room across a range of demographic groups, types of visits and medical conditions, including types of conditions that may be most readily treatable in primary-care situations.
"In no case were we able to find any subpopulations, or type of conditions, for which Medicaid caused a significant decrease in emergency department use," Finkelstein said. "Although one always needs to be careful generalizing to other settings, these results suggest that other Medicaid expansions are unlikely to decrease emergency room use."
With the implementation of the Patient Protection and Affordable Care Act, Medicaid is expanding in many states to cover a population similar to the one that gained Medicaid through Oregon's lottery. The results in this paper, however, suggest nuances to the current debates over the expansion of Medicaid, medical costs and the role of emergency rooms in providing care.
On one level, the results accord with a traditional economics framework suggesting that insurance, by lowering out-of-pocket costs, would increase the use of medical care. Or, as Finkelstein observed, "If we've lowered the price of the emergency department, we would expect people to use it more."
However, Medicaid also lowers the out-of-pocket costs of other types of health care, such as primary-care doctors. Some policy analysts have suggested that expanding Medicaid could reduce emergency department visits by the formerly uninsured by bringing them into more regular contact with primary-care doctors and clinics for preventive care. In theory, that could also reduce overall system costs, since urgent care is expensive.
Prior work by Finkelstein, Baicker and others on Oregon's lottery applicants showed that people who obtain Medicaid increase their use of primary and preventive care. But, as Finkelstein pointed out, the net effect of Medicaid in the study was to also increase use of emergency services.