First Posted: 02/10/2012 9:06 am Updated: 02/10/2012 9:06 am
The concept of support for universal health care is taboo among Republicans who scrutinize the Affordable Care Act -- dubbing it the "Job-Killing Health Care Law Act" -- and call for its repeal. But a new UC Irvine study challenges the GOP argument that the health care law is too costly, with data illustrating that health care costs on the whole fall when poorer, uninsured patients are provided with insurance.
"In a case study involving low-income people enrolled in a community-based health insurance program, we found that use of primary care increased but use of emergency services fell, and -- over time -- total health care costs declined," David Neumark, a co-author of the study, said in a release accompanying the findings.
The study -- which focused on uninsured people in Richmond, Virginia who fell 200 percent below the poverty line -- found that over three years, health care costs fell by almost 50 percent per participant, from $8,899 in the first year to $4,569 in the third after they received insurance. Participants who enrolled in health coverage made fewer trips to the emergency room, which are notorious for running up patient bills.
Instead, insured participants went for more primary care visits.
"A lot of the debate about health care reform surrounds the issue of whether we're setting up something that's going to cost us more by increasing use of medical services or something that will cut costs through more appropriate and timely use of medical services," Neumark said in the release. "[O]ver time, costs can be reduced through increased use of primary care and reductions in emergency-department visits and hospital admissions, but it may take several years of coverage for substantive savings to occur."
Health care spending in the U.S. has been on the rise for years. Americans spent more than three times on health care in 2008 than they spent in the 18 years before, according to a Kaiser report.
Low-income, uninsured individuals tend to rack up exorbitant health-care bills because they often rely on emergency room visits instead of primary care. In the long run, these bills are paid by taxpayers. The Affordable Care Act "is set to extend Medicaid benefits to about 16 million uninsured, low-income adults and children by the end of 2014," according to the study.
In an extreme example of the societal cost of leaving some uninsured, New Yorker writer Malcolm Gladwell once chronicled the medical costs of a homeless man in Nevada who "used more health-care dollars, after all, than almost anyone in the state."
"It would probably have been cheaper to give him a full-time nurse and his own apartment," Gladwell wrote.
Mandatory health care already saw some success in Massachusetts last decade, when current GOP presidential candidate and then-Massachusetts governor Mitt Romney signed a health care law that inspired the Affordable Care Act. Today, Massachusetts has the highest percentage of insured residents of any state.
Though he initially supported the plan, Romney's rival, GOP candidate Newt Gingrich, continues to slam Romney for enacting the health care law.
"Your plan essentially is one more big-government, bureaucratic high-cost system." Gingrich said. Gingrich's views are reflective of a majority of Americans who say they are in favor of repealing the health care law.
A repeal of the act could potentially add "at least a trillion dollars to the deficit," according to HealthCare.gov.
Also on HuffPost:
Healthcare costs decrease over time when low-income uninsured are provided coverage
Study co-authored by UCI’s David Neumark indicates results of newly enacted reforms
Irvine, Calif. — Enrollment of
uninsured patients in a program with benefits comparable to those
offered under the Affordable Care Act of 2010 resulted in significant
healthcare cost savings, a new study finds.
Published in the February
issue of Health Affairs, the research sheds light on the potential outcomes of newly enacted healthcare reforms.
“In a case study involving low-income people enrolled in a community-based health insurance
program, we found that use of primary care increased but use of
emergency services fell, and – over time – total healthcare costs
declined,” said study co-author David Neumark, UC Irvine Chancellor’s
Professor of economics and director of UCI’s Center for Economics &
Public Policy study.
Working with researchers from the Virginia Commonwealth University Health System, Neumark tracked the emergency room, inpatient, outpatient and primary-care service utilization of about 26,000 previously uninsured Richmond residents between 2000 and 2007 whose household incomes fell 200 percent below the federal poverty level. Qualified enrollees were granted health insurance and assigned a primary-care provider for one year. They were required to proactively re-enroll for subsequent annual coverage.
The demographics of these participants paralleled those of the population that will be affected by changes under the Affordable Care Act of 2010, Neumark said. The legislation is set to extend Medicaid benefits to about 16 million uninsured, low-income adults and children by the end of 2014.
The study found that primary-care visits for patients who enrolled continuously over three years rose from 1.06 in year one to 1.60 annually, while emergency-room visits fell from 1.02 in year one to 0.74 by year three. Costs per visit for both inpatients and outpatients also decreased, as did the length of inpatient stays.
On average, total healthcare costs per enrollee per year for this subset were cut nearly in half – from $8,899 in year one to $4,569 in year three. Overall costs per enrollee per year for all participants with at least one year of enrollment declined from $7,604 to $4,726.
“A lot of the debate about healthcare reform surrounds the issue of whether we’re setting up something that’s going to cost us more by increasing use of medical services or something that will cut costs through more appropriate and timely use of medical services,” Neumark said. “Our research shows that, over time, costs can be reduced through increased use of primary care and reductions in emergency-department visits and hospital admissions, but it may take several years of coverage for substantive savings to occur.”
Co-authors of the study include Cathy Bradley, professor and chair of healthcare policy & research at Virginia Commonwealth University; Sabina Gandhi, who earned a doctorate in economics at UCI and is now a VCU assistant research professor; Sheryl Garland, vice president of health policy and community relations at the VCU Health System; and Dr. Sheldon Retchin, VCU professor of internal medicine, gerontology and health administration and CEO of the VCU Health System.
About the University of California, Irvine: Founded in 1965, UCI is a top-ranked university dedicated to research, scholarship and community service. Led by Chancellor Michael Drake since 2005, UCI is among the most dynamic campuses in the University of California system, with nearly 28,000 undergraduate and graduate students, 1,100 faculty and 9,000 staff. Orange County’s second-largest employer, UCI contributes an annual economic impact of $4 billion. For more UCI news, visit www.today.uci.edu.
News Radio: UCI maintains on campus an ISDN line for conducting interviews with its faculty and experts. Use of this line is available for a fee to radio news programs/stations that wish to interview UCI faculty and experts. Use of the ISDN line is subject to availability and approval by the university.
Working with researchers from the Virginia Commonwealth University Health System, Neumark tracked the emergency room, inpatient, outpatient and primary-care service utilization of about 26,000 previously uninsured Richmond residents between 2000 and 2007 whose household incomes fell 200 percent below the federal poverty level. Qualified enrollees were granted health insurance and assigned a primary-care provider for one year. They were required to proactively re-enroll for subsequent annual coverage.
The demographics of these participants paralleled those of the population that will be affected by changes under the Affordable Care Act of 2010, Neumark said. The legislation is set to extend Medicaid benefits to about 16 million uninsured, low-income adults and children by the end of 2014.
The study found that primary-care visits for patients who enrolled continuously over three years rose from 1.06 in year one to 1.60 annually, while emergency-room visits fell from 1.02 in year one to 0.74 by year three. Costs per visit for both inpatients and outpatients also decreased, as did the length of inpatient stays.
On average, total healthcare costs per enrollee per year for this subset were cut nearly in half – from $8,899 in year one to $4,569 in year three. Overall costs per enrollee per year for all participants with at least one year of enrollment declined from $7,604 to $4,726.
“A lot of the debate about healthcare reform surrounds the issue of whether we’re setting up something that’s going to cost us more by increasing use of medical services or something that will cut costs through more appropriate and timely use of medical services,” Neumark said. “Our research shows that, over time, costs can be reduced through increased use of primary care and reductions in emergency-department visits and hospital admissions, but it may take several years of coverage for substantive savings to occur.”
Co-authors of the study include Cathy Bradley, professor and chair of healthcare policy & research at Virginia Commonwealth University; Sabina Gandhi, who earned a doctorate in economics at UCI and is now a VCU assistant research professor; Sheryl Garland, vice president of health policy and community relations at the VCU Health System; and Dr. Sheldon Retchin, VCU professor of internal medicine, gerontology and health administration and CEO of the VCU Health System.
About the University of California, Irvine: Founded in 1965, UCI is a top-ranked university dedicated to research, scholarship and community service. Led by Chancellor Michael Drake since 2005, UCI is among the most dynamic campuses in the University of California system, with nearly 28,000 undergraduate and graduate students, 1,100 faculty and 9,000 staff. Orange County’s second-largest employer, UCI contributes an annual economic impact of $4 billion. For more UCI news, visit www.today.uci.edu.
News Radio: UCI maintains on campus an ISDN line for conducting interviews with its faculty and experts. Use of this line is available for a fee to radio news programs/stations that wish to interview UCI faculty and experts. Use of the ISDN line is subject to availability and approval by the university.
