Gary Locke, the Secretary of Commerce, has now weighed in on the impact of Obamacare on health care costs by pointing out that since there will no longer be uninsured individuals, “this law reduces the hidden tax of about $1,000 for family coverage that those with insurance pay to cover the cost of the uninsured who rely on emergency rooms for care.”
This idea is based on the key assumption that providing health insurance will reduce the use of emergency rooms by the uninsured and instead they will seek care from primary care physicians at a much lower cost of care. Let us consider all the other assumptions of this sort of thinking: First, insurance payments to primary care physicians will change the habits of those who use the Emergency Department for their care. Second, primary care physicians will be available to take on these new patients. Third, the provision of health insurance will reduce the ultimate subsequent hospitalizations and emergency room visits of the previously uninsured. Fourth, that the cost of care for these individuals will decline and therefore the “cost curve will be bent downward”. All of this is wrong.
In 2005, researchers from Yale University writing in the journal Academic Emergency Medicine approached uninsured patients using emergency rooms in New Haven, Conn. for their medical care and intervened by assigning half the patients to an intensive case management program where the patients were guided to community health centers or to specific primary care practitioners, all of whom were funded by a pre-existing federal program to provide underwritten medical care to the uninsured. These patients were compared to a similar group who were randomly assigned to receive a referral to the free care program but no intensive case management. The researchers found that the patients receiving the intense support were 4 times more likely to see a primary care physician (51% vs. 14%), but there was no difference between groups in either subsequent number of inpatient admissions or subsequent visits to an emergency department!
When asked why they used the emergency room in the first place, the subjects blamed it mostly on the fact that they knew the emergency room would be open when they wanted care (65%) and because they had nowhere else to go (76%), but 52% also said it was because they lacked health insurance.
Let us consider what Obamacare would likely do to the use of emergency room visits by the now insured. If all the uninsured acted like the uninsured using emergency rooms in New Haven, nothing will change. Simply providing access to primary care providers is not enough to change the use of the emergency room as a care provider nor will it lead to fewer emergency room visits or hospitalizations. This is at least in part because primary care providers do not operate 24/7 but also because habits are hard to change. Moreover, there are no additional primary care providers to take on these patients so even if they were to seek out such care, it just does not exist.
It takes 17 years from the decision to increase the physician workforce to actually change the size of the physician workforce given the need to build facilities, recruit students, and train physicians to ultimately carry out the task of health care delivery.
So if uninsured patients will continue to use the emergency rooms and if providing them with primary care doctors will not improve utilization of hospital care or emergency room care (even if there were primary care doctors available), please explain how we will eliminate the hidden $1000 cost of free care that Secretary Locke proposes.
Oh, I know, it is because we will have all those uninsured with financial resources paying for their insurance policies instead of simply paying the much smaller financial penalty for not having insurance. Let’s see how that inverted economic incentive works out. If the government subsidy is required for the uninsured to get insurance, then the cost of that care will just shift to another taxpayer. Sorry, Secretary Locke, you just cannot get something for nothing.
Stanley Goldfarb MD is associate dean of clinical education at the University of Pennsylvania School of Medicine and a nephrologist.