Sunday, June 28, 2015

(Somewhat) Legitimate Criticism of Obamacare, Part One

Last week, the Supreme Court upheld the Affordable Care Act's federal subsidies in the case of King v. Burwell. Obamacare is here to stay. Obamacare works. The number of uninsured is at an all-time low. Obamacare greatly reduces the federal deficit. It improves solvency of the Medicare Trust. It reduces health care cost inflation. It creates jobs. It's helping the population become healthier. People who have Obamacare policies like their policies. And criticism of Obamcare by conservatives is almost entirely a pack of lies.

Now, "almost entirely a pack of lies," is not the same as, "entirely a pack of lies." Fair is fair, it's time for some thought on the criticism of Obamacare that actually has some legitimacy.

Criticism One: Obamacare was designed to reduce expensive emergency room visits. But some people with Obamacare are actually using emergency services more rather than less frequently.

According to, 14 million of the 32.7 million Americans who have signed up for Obamacare are lower-income folks eligible for policies under Obamacare's Medicaid expansion. These folks can now receive preventative clinical care instead of higher-priced care in emergency rooms at public expense. Reducing emergency room traffic is a specific goal of Obamacare. In 2009, President Obama said,

"One of the areas where we can potentially see some saving is a lot of those patients are being seen in the emergency room anyway, and if we are increasing prevention, if we are increasing wellness programs, we're reducing the amount of emergency room care, then that frees up doctors and resources to provide the kind of primary care that will keep people healthier, but also allow them to see more patients and hopefully give more time to patients, as well."

Unfortunately, as Ray Fisman of explains, that's not what happening:

"The clear and compelling evidence that ER usage increases with Medicaid coverage is the latest finding to come out of the landmark Oregon Health Insurance Experiment, which randomly selected low-income uninsured adults in Oregon to receive health insurance through the state’s expansion of Medicaid."

Why are new Medicaid enrollees using the emergency room more? Fisman notes:

(1) Rather than try to see a doctor, "the uninsured typically try self-medicating first, or just wait and hope the chest pain is heartburn and not cardiac arrest."
(2) "Patients aren’t, in fact, substituting primary care for the ER to the extent that many insurance advocates have hoped they would," because a busy clinical practice may be, "booked up with regular, predictable appointments, which doesn’t leave much slack to handle these urgent (but nonemergency) cases." Overbooked clinics may then refer patients they don't have time to treat to the emergency rooms.

Also significant is a recent poll released by the American College of Emergency Physicians, in which 28% of doctors surveyed nationally saw large increases in patient volume, while 47% saw slight increases.

So does this mean the President was wrong to state that health care reform would reduce emergency room visits, and the corresponding cost to taxpayers? Not necessarily. A 2014 study in California by UCLA’s Center for Health Policy Research found that ER use was higher among new enrollees in California’s Low Income Health Program, the state's Medicaid-like program, but also found that the spike was temporary. From Olga Khazan of The Atlantic,

"In fact, after two years in the program, the enrollees used hospitals at roughly the same rate as people who had already been insured. The study authors said a likely reason for the eventual decline was that the LIHP program offered preventative care and treatment for chronic illnesses. Over time, LIHP patients were able to see regular doctors for their lingering medical issues, and they used hospitals less as a result."

A temporary increase in emergency room visits, followed by a significant decline was also observed in Massachusetts following that state's 2006 health care reform program, which was a model for Obamacare. In other words, health care reform is working as designed: people who were formerly uninsured are now getting preventative care which is keeping them healthier and out of hospitals, including emergency services.

Some other points in defense of Obamacare:

(1) Clearly some new Medicaid patients are pushing new costs onto taxpayers through hospital visits. But remember, as Ray Fisman pointed out in the Slate article linked above, "the uninsured typically try self-medicating first, or just wait and hope the chest pain is heartburn and not cardiac arrest." One of the health care reform's biggest goals is to stop people dying simply from lack of medical care in the richest country in the world. And while someone who visits the ER may cost taxpayers more than someone who just dies, and (to paraphrase Ebeneezer Scrooge), "decreases the surplus population," that investment in health care usually means another productive American citizen who can pay into the system more than they take out in entitlements. (I would just say that it's wrong to let people die from lack of health care, but I always try to make the economic argument.)

(2) The US saw steady growth in emergency room visits during the two decades before Obamacare was implemented. The pace of that growth has actually slowed in some places since Obamcare went into effect including Los Angeles County, California (which happens to be America's most populous county). From of the L.A Times,

"During the first three months of expanded health insurance coverage required by the federal Affordable Care Act, emergency room visits by patients who didn't require hospitalization increased 1.7% in the county compared with the same period last year, a Los Angeles Times analysis of data from 75 hospitals shows. Annual ER visits in the county had increased 3% last year and 5% in 2011 and 2012."

A recent study in the peer-reviewed Journal Health Affairs also concluded that the Affordable Care Act is reducing ER visits among young adults.

(3) Some Republican-dominated states have refused to expand Medicaid. There are many negative consequences to this decision, not the least of which is withholding health insurance from people who need it. But refusal to expand Medicaid can also have negative consequences for ER service availability. As of Joshua Holland of Moyers & Company noted last year,

"These states aren’t just rejecting an opportunity to expand coverage; Obamacare assumed that expanding Medicaid would dramatically reduce the number of uninsured patients showing up at emergency rooms for treatment they couldn’t afford, so it cut funding for hospitals that treat large numbers of these patients. Without those federal dollars coming in, a number of hospitals that serve low-income populations in refusing states have already been shuttered. According to the Urban Institute study, "these 24 states are also slated to lose a $167.8 billion (31 percent) boost in Medicaid funding that was originally intended to offset major cuts to their Medicare and Medicaid reimbursement.""

Obviously, if some emergency rooms close thanks to these Republican shenanigans, a greater burden will fall on those that remain open. How grim is the situation? This past March, Guy Gugliotta of the Washington Post reported that,

"48 rural hospitals have closed since 2010, the majority in Southern states, and 283 others are in trouble." He cites, "declining federal reimbursements for hospitals under the Affordable Care Act as the principal reasons for the recent closures. Besides cutting back on Medicare, the law reduced payments to hospitals for the uninsured, a decision based on the assumption that states would expand their Medicaid programs. However, almost two dozen states have refused to do so."

Florida Governor Rick Scott's refusal to expand Medicaid has crippled that state with a hospital funding crisis and a budget crisis. Governor Scott still wants federal dollars of course. He's actually demanding a return to the old, grossly inefficient system whereby millions were uninsured, went to emergency rooms for all their care, and the federal government wrote checks to hospitals to keep them in business.

(4) While some emergency rooms may be seeing more patients, those in states that have expanded Medicaid are seeing fewer who have no insurance. The LA Times article linked above noted that in Los Angeles County, emergency room patients without coverage and responsible for their own medical bills dropped from 18% to 16%. A decline in uninsured patients seeking uncompensated care increases revenue for health providers.

(5) Yes, it costs the taxpayers money to insure the uninsured who cannot pay for coverage themselves. However, from a financial standpoint, the smart thing to do is to provide very poor Americans with comprehensive services including health insurance, housing and income support. From Chris Zeigler of

"Boston Health Care for the Homeless tracked 119 chronically homeless people for five years. In that time, those 119 people racked up an astounding 18,834 emergency room visits, despite the fact that 33 of them died and seven were placed in a nursing home during that time. In Washington in 2002, 198 individuals generated 9,000 emergency room visits, or a little under one a week. At a minimum of $1,000 a visit, that's a heck of a medical bill that those hospitals are trying to collect from a homeless person. Unless they have a really good day panhandling, that money is coming out of your pocket.

Add in the annual cost of $24,000 if they take advantage of a shelter, plus the cost of the police to arrest and process those who misbehave (plus the round-the-clock housing, feeding and guarding they get once they're in jail), and it all adds up to a tidy sum for taxpayers to handle. Experts say it really would be cheaper just to house them and treat them.

For instance, a San Diego program found that "When patients were connected with housing, income benefits, health insurance and a primary care home, a 61 percent decrease in emergency department visits and a 62 percent decrease in inpatient days occurred over two years." Statistically, a person just doesn't get as sick, and doesn't get into as much trouble, once they have a roof over their head."

Good night, and good luck.