The impact of the Affordable Care Act

The Impact of the Affordable Care Act: Evidence from California’s Hospital Sector
(with Mark Duggan and Atul Gupta) R&R, AEJ: Economic Policy

The Affordable Care Act (ACA) authorized the largest expansion of public health insurance in the U.S. since the mid-1960s. We exploit ACA-induced changes in the discontinuity in coverage at age 65 using a regression discontinuity based design to examine effects of the expansion on health insurance coverage, hospital use, and patient health. We then link these changes to effects on hospital finances. We show that a substantial share of the federally-funded Medicaid expansion substituted for existing locally-funded safety net programs. Despite this offset, the expansion produced a substantial increase in hospital revenue and profitability, with larger gains for government hospitals. On the benefits side, we do not detect significant improvements in patient health, although the expansion led to substantially greater hospital and emergency room use, and a reallocation of care from public to private and better-quality hospitals.

That is the job market paper by Emilie Jackson of Stanford.


"Notwithstanding the above increase in hospital care, we fail to reject the null of no effect on patient health[...]we focus on the subset of patients discharged with acute, emergent conditions such as Heart attack and Pneumonia to circumvent selection concerns."

I think this misses the mark, then. A patient who is having an emergency such as a heart attack or breathing failure is going to go to the hospital, insurance coverage notwithstanding. They're not the marginal patient of interest. It's the marginal patients who would go to a (nicer) hospital with coverage but wouldn't without coverage who likely saw increases in health.

This would explain the seeming contradictory observation of greater utilization of "private and better-quality hospitals" alongside the failure "to reject the null of no effect on patient health".

The real question is: is the ACA constitutional? Can the government mandate that you pay for someone else's needs/desires? And more to the point, should they? I have a car payment, why not tax "the rich" to pay for my car payment??? I have a snacking habit, why not tax "the rich" to pay for my snacking habit??? Are you free if the government elite can steal your money at the point of a gun and give it to others in return for votes???

There is nothing on the Constitition that bans a tax whose proceeds are paid out to or for another person. Government pretty much does that with every dollar it spends.

It's in the Fifth Amendment: the government can't deprive you of property, and money is a type of property, without due process of law.

...and every other tax is a law. So, due process of law.

Taxation = theft people are the worst sort of dullards.

All the Dullards are here.

The Fifth Amendment more significantly says "without just compensation". And lets President Madison "Father of the Constitution" speak to the matter: "The government of the United States is a definite government, confined to specified objects. It is not like the state governments, whose powers are more general. Charity is no part of the legislative duty of the government."
Even Bernie Sanders has adequate skills to find this quote. Note that Madison went on to say the States are not so encumbered except by their own Constitutions. He also said he'd be the first to throw money his personal money in the hat, but not a dime of taxpayer money.

There is nothing in the constitution that says abortion is a right either. If a honest Supreme court is ever seated to answer this question the ACA and welfare would be ruled unconstitutional.

Not all moneys spent at the Federal level are taxed moneys. For instance deficit spending...

Another possibility is that hospitals are dangerous places, hospitals are far too inclined to hospitalize marginal cases, hence increasing hospitalization fails to improve patient health on average.

Not all people having respiratory difficulties, or passing out once in a blue moon due to brief pauses in their heartbeat, should be hospitalized.

I thought I had read something else about this?

So the authors think that people go to the hospital for fun?

Of course not. But going to the doctor/hospital is much more elective than many think.

Hospitals? I don't think so. Doctors? Well ... I dutifully asked after my father the other day. Mother, with just a little devil in her, replied that he had a good week upcoming to look forward to, "because lots of doctor's appointments."

A lot of hospitalization questions come down to self-reporting. Will you be able to manage these complicated medications yourself? How short of breath are you? Is this pain from me pushing on your ribs the same as you "heart attack" earlier?

Patients can answer different ways, and a lot of them know which way to answer to go inpatient. For the Medicaid population there are many patients that I suspect are electively getting themselved obsed in order to stay in the hospital for the attention and comforts.

From watching my wife I think there is an element of...maybe not fun, but enjoyment of a sort. I bet my wife averages a doctor's visit a month. She'll go for sore throats, sprained knees, etc.

"Why are you going to the doctor?" I ask her. "He'll tell you you sprained your knee, and you already know that."

"Just to make sure," she replies. Sure of what, I'm not sure.

I really thinks she likes the whole atmosphere--the professionalism, getting your ten minutes of attention from the high-ranking person in a white coat, maybe the excitement of getting some sort of scan done.

She gets her insurance through Fairfax County, VA, by the way (FFX Schools employee) and our co-pay for these visits is next to nothing. If you're looking for someone to blame for high medical costs, our household is one obvious culprit.

Sure this happens. Most patients wait some days or longer with sore throats and sprains, and try a few things before calling for an appointment as they don't improve. An appointment is typically very inconvenient. So this is more common with older Medicare patients. Or unemployed Medicaid.

These are typically relatively small HC costs, and these 3rd parties pay very low rates. So this is not a major cost driver, and not a large part of our overall HC cost problem

My close friends - not silly! - seem to like a lot of doctoring. They have a lot of fears, plus a constant stream of medical, pseudo-medical, and dietary information, via other women and the media, for which they seem to be a ready audience; and a feeling that health is something they can "do," as their duty. One mentioned the other day that she had been in to see the doctor because her arm hurt. The doctor asked if she had recently gotten a dog. Indeed, she had, for the first time. The doctor said a lot of people present with that, their arms being unused to a dog tugging on a leash.


“Dog arm”, yes. Wait til the dog sees a squirrel. Then it will be “dog shoulder.”

And yet it IS prudent to see a doctor when one has a new and inexplicable pain (after taking two Advil and waiting a day or two).

Your wife isn't to blame, she is acting rationally under a system that creates bad incentives: consume as much healthcare as possible despite diminishing returns to your health because someone else is paying for it.

Rather: your wife is to blame, acting rationally under a system that she knows creates bad incentives.

This subject is too complicated for the simple conclusions reached by the author. Consolidation is the most significant development in health care, consolidation among physician practices as well as among hospitals. Indeed, hospitals have been acquiring physician practices as well as other hospitals. It's even more complicated in California because California is one of the states that prohibits the "corporate practice of medicine". Hence, physicians cannot be employed directly by hospitals so the "employment" is done indirectly (through a physician owned entity that contracts to provide all of its services on behalf of the hospital). Physicians employed, directly or indirectly, by hospitals have an incentive to use hospital services for patient diagnosis and treatment. My point is that higher hospital revenues are a function of several factors, including ACA.

In AZ, hospitals kicked in $250M to help pass our Medicaid expansion. The idea being fewer no payers, even though each reimbursement would be relatively low. Since then our local hospital which I profit share has only been more profitable. We've had hospital employed docs all along.

I wonder if because of the substitution, the cases of additional use and non-benefit if true show that the local California system had already covered the cases where use lead to results, suggesting that Medicaid could trim coverage with no ill effects.

The ill effects would be financial, ethical and political.
I will never understand the weird mindset that inveighs against universal healthcare. It's the equivalent of saying we shouldn't school some people's kids, or some people shouldn't have access to modern sanitation. In no other remotely civilized country on Earth will you find any significant (or reputable) opposition to universal healthcare.

Have you *seen* other peoples’ kids??

Also we seem very used to hordes of Californians without proper sanitation.

"reallocation of care from public to private and better-quality hospitals."

In other words, increased costs.

If everyone is entitled to a car, I'll take a Maserati. (Not a Ghibli)

Not necessarily, especially as it pertains to ACA. Hospitals are mainly paid by these 3rd parties with pre-negotiated rates. For instance my medically unfortunate wife's Obamacare policy only pays about 25% of local and tertiary referral hospital bills. And that is the pre-negotiated rate. In fact most hospitals in general only collect about 25% of total billings.

We exploit ACA-induced changes in the discontinuity in coverage at age 65....

ACA-induced changes at 65?

Medicare is and has been at 65 for decades so that’s pre-ACA. What else was ACA-induced besides if one wanted to receive one’s social security that one paid into for decades, Obama’s rules forced one into Medicare?

Trump voided that nugget.

It's the opposite of what you are thinking. Previously, people just below 65 had much lower rates of health care coverage than those at 65+ who get Medicare. Obamacare increased the rates of those below 65.

It's not "THE" impact of the ACA, though, is it?

It's only "an" impact of the ACA (upon only one beleaguered state): and considering that the impact in question is upon California, the answer to any further questioning may pertain directly to whose electricity grid a hospital or hospital system, a government regulator, a health insurance advisor, or a "health care consumer" is plugged into.

I'm old enough to remember that we couldn't go to a full Canadian style solution, because that would "ration care."

Government medical care is interpreted by the poor as a visit to the emergency room when sick. Emergency rooms are jammed. In California, depending on how you define sick and needing public health, one can treat about half the homeless as waiting for medical care. Or, thee are some 30k folks in LA in the extended emergency room. It is all becoming a hopeless mess.

The solution has always been some intelligent triage at home, the adults able to discern where an emergency room visit or a scheduled appointment works best. But you can see the whole state is failing and sorting out the medical failure from all the other failure is impossible.

Short version: the Marxist socialist big government ACA mainly benefited private hospitals and health care companies.

Knock me over with a feather.

AARP loves ACA.

How does government health care spending affect the opioid epidemic? Who pays for all those opioids?

More Medicaid funding, more opioids prescribed. Most opioids are cheap generics. The expensive ones are the brand names and those that are compounded to be less easily abused.

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