Friday, November 5, 2010

No growth in Hospital Costs in Massachusetts, bodes well for Obamacare.

From Econobrowser, this update on health care reform, Massachusetts style (hint, it saves lives and money):

The use of emergency rooms for routine care fell, as did hospital admissions for treating preventable conditions, and the proportion of uninsured among hospital inpatients (by 36%), while there was no increase in the growth of hospital costs. From the NBER Digest article summarizing NBER working paper 16012 by Jonathan T. Kolstad and Amanda E. Kowalski:

The national health care legislation passed in March 2010 requires U.S. citizens to obtain health insurance coverage. Modeled on legislation passed in Massachusetts in 2006, the new federal law contains many provisions that are similar to that state's reform, including new requirements for employers and expansions in subsidized health insurance.

...Using hospital discharge data, they conclude that the Commonwealth's health insurance reform reduced the number of uninsured among the inpatient hospital population by 36 percent. The reform increased coverage most among: young adults and the near elderly, men, people from the lowest-income zip codes, and people identified as black and Hispanic.

Insurance coverage through Medicaid, the state-run federal program designed for low-income people, expanded by approximately 30 percent among nonelderly residents of Massachusetts. ...

Use of hospital emergency rooms for routine care also declined after 2006: the reform’s expanded insurance coverage resulted in a 2 percentage point decrease in the fraction of hospital admissions from the emergency room. The reduction in emergency admissions was particularly pronounced among people in low-income areas of the state.

Hospital admissions for treating preventable conditions also fell. The authors find a decrease of 2.7 percentage points in inpatient admissions attributable to preventable conditions.

The authors note that the Massachusetts mandate for individual insurance coverage widened access to outpatient treatment and thus management of preventable conditions. Despite finding other hospital impacts, this study finds no evidence that hospital cost growth increased following the reform.
Note: the analysis in this paper relies upon data. If you are averse to looking at data, no point in looking at this paper (you know who you are).

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