Emergency Visits Seen Increasing With Health Law

The study, published in the journal Science, compared thousands of low-income people in the Portland area who were randomly selected in a 2008 lottery to get Medicaid coverage with people who entered the lottery but remained uninsured. Those who gained coverage made 40 percent more visits to the emergency room than their uninsured counterparts during their first 18 months with insurance.

The pattern was so strong that it held true across most demographic groups, times of day and types of visits, including those for conditions that were treatable in primary care settings.

The findings cast doubt on the hope that expanded insurance coverage will help rein in emergency room costs just as more than two million people are gaining coverage under the Affordable Care Act. And they go against one of the central arguments of the law’s supporters, that extending insurance to large numbers of Americans would reduce emergency room use, and eventually save money.

In remarks in New Mexico in 2009, Mr. Obama said: “I think that it’s very important that we provide coverage for all people because if everybody’s got coverage, then they’re not going to the emergency room for treatment.”

The study suggests that the surge in the numbers of insured people may put even greater pressure on emergency rooms, at least in the short term. Nearly 25 million uninsured Americans could gain coverage under the law, about half of them through Medicaid. The first policies took effect on Wednesday.

“I suspect that the finding will be surprising to many in the policy debate,” said Katherine Baicker, an economist at Harvard University’s School of Public Health and one of the authors of the study.

An administration spokeswoman, Tara McGuinness, said that the time frame was too short to expect much of a change, and that over the longer term, use would most likely decline. She pointed to a longer-term study in Massachusetts, which expanded coverage for its residents in 2006, that found an 8 percent decline in emergency department use over a period of several years.

“Medicaid saves lives and improves health outcomes,” Ms. McGuinness said. “Plenty of studies show that.”

But many economists say that the emphasis on emergency room use, both in policy and in political speeches, is misplaced, as it makes up only a small part of health care costs in the United States. A federal government health survey found that emergency departments accounted for about 4 percent of total health spending in 2010, far less than inpatient hospital visits, which accounted for about 31 percent. Certain populations, however, like low-income people with chronic illnesses, have much higher rates of use.

Dr. Baicker and Amy Finkelstein, an economist at the Massachusetts Institute of Technology, another author, said the increased use of emergency rooms is driven by a basic economic principle: When services get less expensive, people use them more. Previous studies have found that uninsured people face substantial out-of-pocket costs that can put them in debt when they go to the emergency room. Medicaid reduces those costs.

Medicaid coverage also reduces the costs of going to a primary care doctor, and a previous analysis of data from the Oregon experiment found that such visits also increased substantially.

“This is just one piece of an increase we found across every type of care,” said Bill J. Wright, an author of the new study who is the associate director of the Center for Outcomes Research and Education in Portland, a part of Providence Health and Services, a large health care provider.

The study’s authors emphasized that Medicaid had many benefits. Previous analyses from the experiment found that gaining coverage reduced the incidence of depression and increased feelings of financial stability.

The study drew on data from the Oregon Health Insurance Experiment that included about 90,000 low-income Oregonians and randomly assigned about 30,000 of them access to Medicaid. Health experts say the experiment’s design — random assignment of coverage through a lottery — allowed them to isolate and evaluate the effects of the program. Such designs are the gold standard in medical research, but are rarely used for domestic health care policy.

U.S. Cuts Take Increasing Toll on Job Growth

The Labor Department reported on Friday that the economy continued to add jobs in July and that the unemployment rate fell to 7.4 percent, from 7.6 percent. But the pace of job growth slowed somewhat from the first half of the year and remains modest enough that the economy is years away from a full recovery.

Contributing to the hangover from the worst financial crisis in decades is a wave of cuts in domestic and military spending, known collectively as the sequester, which is causing government furloughs as well as job losses and curtailed hours among federal contractors.

Although the sequester became law on March 1, some of the effects, like the forced leaves, have begun to ramp up only recently. More job losses, rather than shorter workweeks, are predicted if the cuts remain in place into next year.

Congress left on Friday for a summer recess of more than a month, after a week in which Republicans’ divisions with one another and with President Obama suggested a new budget showdown may be coming in the fall. The disagreements leave no clear way to end the spending cuts that continue to slow the economy and could even lead to a more damaging government shutdown in October.

Corporate and academic economists say that Washington’s fiscal fights have produced budget policies that amount to a self-inflicted drag on the economy’s recovery.

Joseph J. Minarik, director of research at the corporate-supported Committee for Economic Development and a former government economist, said he could not remember in postwar times when fiscal policy was so at odds with the needs of the economy.

“The macroeconomic situation is highly unusual,” he said, adding: “We have to be concerned about our debt getting totally out of hand, so we are concerned about the federal budget. But the concern has got to be tempered by the fact that we have got to get some economic growth going as well.”

The effects of the cuts could be found in the details of Friday’s jobs report. Although federal government employment did not decline in July as it had in previous months this year, the number of people who were working part time because they could not get their employers to give them full-time hours rose significantly. This probably reflects decisions by many government agencies to achieve their required budget cuts by forcing employees to take unpaid leave.

At the Department of Defense, for example, 650,000 civilians must take off 11 days without pay — generally once a week — through September, when the current fiscal year ends. The Internal Revenue Service likewise scheduled one furlough day a month from May through August.

On her first day at the Office of Management and Budget, Mr. Obama’s new budget director, Sylvia Mathews Burwell, sought to meet employees and found many desks empty because it was a furlough day. And the new trade representative, Michael Froman, has struggled during his office’s budget cuts to assign government lawyers to various negotiations abroad.

In the private sector, employment at government contractors also appears to be falling as companies that do government research, provide custodial services and retrofit federal properties to be more energy-efficient, among other things, are informed of contract cancellations or delays in bids for new contracts — partly because the federal workers arranging the bidding are being furloughed.

“The disjunction between textbook economics and the choices being made in Washington is larger than any I’ve seen in my lifetime,” said Justin Wolfers, an economics professor at the Gerald R. Ford School of Public Policy at the University of Michigan. “At a time of mass unemployment, it’s clear, the economics textbooks tell us, that this is not the right time for fiscal retrenchment.”

Given that rough consensus in an otherwise quarrelsome profession, he added, “To watch it be ignored like this is exasperating, horrifying, disheartening.”

After the release of the jobs report, the first thought of many business forecasters was of the Federal Reserve, and what the data might suggest for its next move in September, when analysts believe it probably will begin tapering its stimulus measures known as quantitative easing. As the Fed chairman, Ben S. Bernanke, has made clear — including repeatedly to Congress — the Fed has continued its stimulus policies in part to offset the drag from fiscal policy.

Jackie Calmes reported from Washington, and Catherine Rampell from New York.