News Story

'ER Visits Won't Increase' Claim By Medicaid Expansion Advocates Remains Dubious

The fight over Obamacare and health care reform in general has centered around health care coverage and for many there's a fixation and assumption that simply providing coverage automatically translates into improved health care and greater access to it.

In reality, under Obamacare, 50 percent of those expected to gain coverage by 2019 would be placed in state operated Medicaid programs, according to reports. But when the quality of health care provided is considered, these programs measure near the bottom of the barrel.

"Health insurance is not the same as health care and Medicaid is not all that good," Avik Roy, a senior fellow at the Manhattan Institute said at a forum hosted by the Mackinac Center for Public Policy in Michigan earlier this year. 

Getting states to expand Medicaid is an important step in the implementation of Obamacare. The administration of President Barack Obama is offering hundreds of millions of up-front dollars to states that agree to make the expansion.

In Michigan, House Bill 4714 passed the House to expand the program. So far, the state Senate has not taken action on the bill.

Increasingly, Americans, particularly those with low incomes, are turning to emergency rooms for health care. This trend is partly due to the low quality of care experienced by those on Medicaid. Less access to routine care results in more reliance on emergency care, which is one of the most expensive way of delivering health care.

One of the promises Obamacare proponents make is that the law will reduce this reliance on emergency room care. However, it may be more likely that Obamacare will actually increase the pressure on emergency rooms, not decrease it, according to studies.

“Studies show that people who are on Medicaid use emergency rooms at twice the rate of those who are uninsured and those who are privately insured,” said Jack McHugh, senior legislative analyst with the Mackinac Center for Public Policy. “The fact that Obamacare relies so heavily on the expansion of Medicaid contradicts any assertions that it would reduce reliance on expensive emergency room care.

"Arguing that Obamacare would result in less use of emergency rooms, is just a political talking point," McHugh continued. "This talking point is designed to fool those who don't look more deeply into the dynamics involved. It is revealing that this false claim is being advanced both nationally about Obamacare and at the state level as part of the effort to expand Medicaid."

In his speech in Michigan, Roy pointed to a study from the University of Virginia that found that surgical patients on Medicaid were 97 percent more likely to die before leaving the hospital than were similar patients with private insurance, and 13 percent more likely to die than those with no insurance at all. 

Capitol Confidential sent the following question to the office of Gov. Rick Snyder, the office of House Speaker Jase Bolger, R-Marshall, and the office of Senate Democratic Leader Gretchen Whitmer, D-East Lansing. All three support House Bill 4714.

Q. According to a National Hospital Ambulatory Medical Care survey, Medicaid enrollees access care through the emergency room at twice the rate as do uninsured and privately covered populations. With this in mind, what’s the basis for promoting Medicaid expansion in Michigan, based partly on the claim that it would reduce reliance on emergency rooms?

"The bill's reforms are designed to get people connected with primary care physicians to provide for more preventative and timely care, thereby reducing the use of emergency rooms for routine ailments or treatment of issues that shouldn't have reached an acute stage," said Ari Adler, spokesman for Speaker Bolger. "In the House passed version of HB 4714, it specifically states that DCH must ensure that enrollees have access to a primary care physician and to preventative services since we know that low income individuals are typically the 'frequent-flyers' in ERs and that preventative care is more cost effective. We also ensured that the bill allows for services provided through telemedicine to also help curb emergency room utilization.

"For every study, there is another," Adler continued. "The usage of emergency rooms for the Medicaid population is not disproportionately high for non-urgent health issues or routine care. According to the National Hospital Ambulatory Medical Survey results, non-urgent visits represented 10 percent of ER department visits paid by Medicaid, while 7 percent of non-urgent visits to the ER department were paid by private health insurance. Thus, the majority of ER department visits by Medicaid enrollees were due to urgent or semi-urgent care that was needed. The reforms in HB 4714 will help ensure that routine health issues do not become urgent or even semi-urgent."

McHugh said there are some important problems associated with the reforms in House Bill 4714.

"First, there is the likely reality that the federal government won't allow most, if any, of the reforms in the legislation to ever be enacted," McHugh said. "House Republican leaders keep saying that if the Obama administration doesn't OK the reforms, the expansion won't take place. But no one else seems to interpret the bill that way. Neither the mainstream news media nor the Democrats describe the Medicaid expansion bill in that context. Apparently, the Mackinac Center is not the only entity that doesn't take that House Republican claim seriously.

"Secondly, even if some reforms were allowed, they wouldn't come close to counteracting the negative effects of the expansion and of Obamacare overall," McHugh added. "The odds are that if Michigan expands Medicaid it is likely to lead to more visits to the emergency room, not less."

Adler said House Bill 4714 is designed to get the most benefits possible from the Medicaid system.

"Because we contract the Medicaid program out to private HMOs, they are going to make the state Medicaid dollars stretch farther," Adler said. "This means doing everything in their power to ensure that enrollees utilize the most cost effective services possible. The way HB 4714 is structured, it permits the private sector to better control health care costs than any sort of traditional government fee-for-service or the subsidized, uncompensated care system we have now."

Sara Wurfel, spokesperson for Gov .Snyder, said the ER issue really isn't applicable in Michigan.

"As you probably well know, Medicaid in Michigan moved to a statewide capitated managed care program in 1997 under then Director James Havemen and Gov. John Engler," Wurfel said. "Since then, the state has saved hundreds of millions of dollars. Individuals are given a primary care gatekeeper who manages their care and reinforces preventive care as opposed to waiting to become very ill and using emergency room care. That's a fundamental difference and fact than traditional fee-for-service Medicaid programs.

"The study you reference includes individuals not enrolled in managed care," Wurfel continued. "As a result, I'd say it's an incredible stretch at best and really can't be used to somehow make the conclusion that's what would happen in our state's health delivery system."

However, there’s a big difference between the theoretical performance of Michigan’s Medicaid program and actual outcomes, McHugh said.

“Alas, it appears that managed care may not make it easier for Medicaid recipients here to get access to phycisians,” said Jack McHugh. “A recent study in the New England Journal of Medicine suggests Michigan recipients will fare no better than states with 'fee for service' Medicaid systems. Specifically, we are the 19th worst state in terms of the gap between the primary care system’s capacity and the increased demand the Medicaid expansion will place on it. That’s a recipe for far more emergency room use by Medicaid ‘beneficiaries,’ not less.”

Wurfel also echoed Adler’s assertion that reforms in House Bill 4714 would improve the state’s health care system.

"The governor is always interested in continuous quality improvement," Wurfel said. "So, beyond the structure of Michigan's program that's far different from other states, the legislation includes clear performance standards to further reduce ER use and that DCH must ensure that enrollees have access to a primary care physician and to preventative services."

Sen. Whitmer’s office did not respond to a request for comment.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.