Health care and the emergency room

One of the justfications that has been advanced in favor of health care reform is that it will help drive down costs by eliminating the expensive over-use of emergency rooms. The logic is that the expansion of health insurance coverage should reduce the number of people who utilize emergency rooms for non-emergency care (while doctors can refuse to see a patient who lacks health insurance, emergency rooms cannot). In addition, patients will be more likely to visit doctors to address health problems before they become major issues requiring emergency room care.

The problem with this theory is that, even if true, the numbers just don't suggest any major savings:

While the past decade has seen dramatic increases in the use of emergency care and ER crowding, ER care is but a tiny portion of the U.S. health care pie: less than 3 percent. The claim that unnecessary visits are clogging the emergency care system is also untrue: Just 12 percent of ER visits are not urgent. People also tend to think ER visits cost far more than primary care, but even this is disputable. In fact, the marginal cost of treating less acute patients in the ER is lower than paying off-hours primary care doctors, as ERs are already open 24/7 to handle life-threatening emergencies.

In fact, if the Obama Administration were truly serious about getting a handle on surging health care costs, it would seek to reduce, not expand, the role played by health insurance. As George Will argues in today's column:

Employer-paid insurance is central to what David Gratzer of the Manhattan Institute calls "the 12 cent problem." That is how much of every health care dollar is spent by the person receiving the care. Hence Americans' buffet mentality -- we paid at the door to the health care feast, so let's consume all we can.

Expanding a major cost driver -- insurance -- but citing the comparatively minor cost driver of emergency room care is simply non-sensical. Then again, the entire health care debate is best explained as an attempt to expand government power rather than improve the state of health care.

HT: Freakonomics.