Health Center State Policy

Oregon Study Should Not Torpedo Medicaid Expansion Efforts

By DaShawn Groves

As many state legislators are returning to their capitols and governors ready their State of the State addresses, some states have unfinished business pertaining to whether they should expand Medicaid programs. Medicaid expansion opponents will come armed with a recent study on Oregon’s Medicaid expansion effects on emergency room (ER) use. The findings may throw cold water on proponents’ talking point that expanding insurance coverage will reduce ER use thus lowering costs. Proponents should not fret. Besides the fact proponents already have an arsenal of talking points[i], here’s why they shouldn’t fret over this study.

In 2008, Oregon implemented a limited Medicaid expansion for uninsured low-income adults using a lottery drawing 30,000 names from a waiting list of 90,000 individuals. The lottery drawings provide researchers with an opportunity to compare the effects of recently insured individuals with those with similar socio-economic backgrounds. The study found that in the 18 months following the 2008 lottery, the newly Medicaid insured patients on average increased their ER use by 0.41 visits. Not only did ER visits increase both during nights and weekends, but also during typical business hours – when alternatives to the ER are open. The study findings only add to the lack of consensus to the question “Does insurance coverage increase ER use?”[ii] and leaves readers with unanswered questions, such as:

How does it compare? While the study sheds light on the utilization patterns on those similar to the newly eligible, How do these newly insured individuals compare to the current Medicaid population’s utilization patterns? Perhaps there is no difference in utilization, but the study lacks the key comparison group.

There is no analysis of the long-term effect. Preliminary findings from UCLA’s Center for Health Policy Research study on California’s program seem to suggest utilization decreases over time. Researchers found a spike in ER use in the first year similar to the Oregon study, but there was a substantial reduction in subsequent years.[iii]

Will it be the same in my state? The study definitely leaves room to question the generalizability of the results to other states. The Oregon population voluntarily signed up for coverage. The effects in other states may differ as the populations will sign up because of the insurance mandate. Also the study represents a very small sample of the Oregon uninsured population. The fact that it was small number of individuals who voluntarily signed up could possibly skew the results . The rest of the population may not utilize health care services in the same manner.

If the stumbling block is fear for the increase in ER use, then proponents should point to how investments in primary care could be coupled with Medicaid to reduce ER visits. Health centers are a well-documented solution for reducing ER utilization. A recent study found low-income, uninsured adults living in areas that have more funding for community health centers were more likely to have a primary source of health care and to have had a health care visit within the past year. In particular, Medicaid enrollees living in an area with well-funded community health centers were less likely to use the emergency department or forgo care due to cost.[iv] There is even state-specific evidence. For example,

  • In California, health center patients had had 64% lower rates of multi-day hospital admission and 18% lower rates of emergency department than non-health center patients.
  • In South Carolina, a study found that counties with the highest ED utilization rates lacked a health center which suggested counties might benefit from health centers as they may generate health care savings by reducing ED use while increasing access to primary care.[v]

Proponents should turn the Oregon study back onto the opponents. Earlier research on Oregon’s Medicaid Expansion found that Medicaid patients reported more visits to doctors’ offices and use of preventive care. People described their care as high quality and had usual source of care. There was also dramatic improvement in mental health.[vi]  There are far more benefits that outweigh the findings of one study and many solutions to address the ER use.

For more resources on health centers, see:

[i] See NACHC Medicaid Expansion Toolkit.

[ii] Miller S., The Effect of Insurance on Emergency Room Visits: An Analysis of the 2006 Massachusetts Health Reform. J. Public Econ. 96, 893–908 (2012).  J. Currie, J. Gruber, Health Insurance Eligibility, Utilization of Medical Care, and Child Health. Q. J. Econ. 111, 431–466 (1996). M. Anderson, C. Dobkin, T. Gross, The Effect of Health Insurance Coverage on the Use of Medical Services. Am. Econ. J. Econ. Policy 4, 1–27 (2012). M. Anderson, C. Dobkin, T. Gross, The Effect of Health Insurance on Emergency Department Visits: Evidence from an Age-Based Eligibility Threshold. Review of Economics and Statistics, posted online April 2, 2013 J. P. Newhouse, the Insurance Experiment Group, Free for All: Lessons from the RAND Health Insurance

[iii] AirTalk. “Do newly insured medicaid recipients make more use of costly ER services?”

[iv] McMorrow S, Zuckerman S. Expanding Federal Funding to Community Health Centers Slows Decline in Access for Low-Income Adults. Health Serv Res. 2013 Dec 18.

[v] Hossain MM and Laditka JN. “Using hospitalization for ambulatory care sensitive conditions to measure access to primary health care: an application of spatial structural equation modeling. Int J Health Geogr. 2009 Aug 28;8:51.

[vi] A. Finkelstein, S. Taubman, B. Wright, M. Bernstein, J. Gruber, J. P. Newhouse, H. Allen, K. Baicker; Oregon Health Study Group, The Oregon Health Insurance Experiment: Evidence from the First Year. Q. J. Econ. 127, 1057–1106 (2012).