NPRI testimony on how Obamacare will increase ER visits

Geoffrey Lawrence

Yesterday, before the Joint Finance Committees, Geoffrey Lawrence, NPRI's deputy policy director, delivered the following testimony on the negative impacts of Obamacare.

Madame Chair and members of the committee, thank you for allowing me to participate today.

I’d like to briefly address an element of the managed care idea for Medicaid. Although NPRI ideally prefers Medicaid benefits to be structured around a consumer-driven health plan such as a Health Opportunity Account, many states have demonstrated a measurable cost savings by structuring those benefits around a managed care program.

However, under the ACA, I don’t believe we can hope that a managed care program will be able to reduce the state’s expenditures on emergent care. Let me provide a cautionary tale from Massachusetts.

According to statistics released by the Massachusetts Division of Health Care Financing and Policy, emergency department visits actually increased by 9 percent in the four years after universal health care was enacted in that state. By all accounts, this occurred because there were not enough providers to handle the additional demand created by thousands of new patients receiving health insurance. Even though these individuals nominally gained insurance, they were not able to obtain access to care, because of the shortage in supply. This led to increased non-price rationing and, as a result, more visits to emergency departments.

This cautionary tale is particularly relevant for Nevada because the rate of physicians per 100,000 in population is significantly lower here than in Massachusetts. According to the latest data from the U.S. Census Bureau, Nevada has 188 physicians per 100,000 in population, whereas Massachusetts has 469 physicians per 100,000 in population — about 2.5 times as many as Nevada.

Thus, we should expect to see the problem of non-price rationing for a limited supply of available health care to be much more pronounced here than was the case in Massachusetts — meaning our emergency rooms could soon become overwhelmed with additional demand. If this comes true, it could be a costly prospect for Nevada.