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research Does Universal Health Coverage Work? WITH THE ONGOING DEBATE about U.S. healthcare reform, many wonder what will happen if the Obama Administration's Patient Protection and Affordable Care Act takes effect in 2014. At that time, barring intervention, all U.S. citizens will be required to obtain health insurance coverage, whether at their own cost or via a variety of employer mandates, support programs, and insurance exchange markets. However, one state, Massachusetts, already has enacted universal healthcare for its residents. Jonathan Kolstad, an assistant professor at the Wharton School at the University of Pennsylvania in Philadelphia, and Amanda Kowalski, an assistant professor of economics at Yale University in New Haven, Connecticut, recently examined 36 million patient discharge records from Mas- sachusetts to see how universal healthcare has affected such factors as emergency room visits, the length of hos- pital stays, and overall cost of care in the Massachusetts market. They used a representative sample of records for 20 percent of all U.S. hospitals to control for changes happening in the general healthcare market. The pair found that after Massachusetts enacted universal healthcare law, coverage for the state's popu- lation increased from 89.5 percent to 94.5 percent, compared to approximately 84 percent nationally. Opponents of the Affordable Care Act argue that it will cause greater use of hospital services. However, Kolstad and Kowalski found that in Massachusetts, reform led to a 1 percent decline in the length of stays—perhaps because physicians knew that patients would have access to healthcare after discharge. The researchers also found that, following the enactment of health- care reform, admissions to emergency rooms in Massachusetts declined by 5 percent, most likely because poorer patients no longer had to resort to coming to the ER for routine ailments. Finally, the researchers' examina- tion of Medicare data indicated that healthcare reform neither increased nor decreased overall hospital operat- ing costs. While this finding undermines opponents' argument that reform will cause costs to increase, it also fails to support proponents' case that reform will save money over the long term. Amanda Kowalski Jonathan Kolstad Kolstad notes that it will be important to conduct future research on the impact of U.S. healthcare reform on actual health outcomes for patients, which was out- side the scope of this study. As the call for change in healthcare intensifies, he adds, the importance of applying empirical studies to proposed solu- tions will be the key to creating a system that delivers affordable, high- quality care. "The Impact of Health Care Reform on Hospital and Preventa- tive Care: Evidence from Massa- chusetts" is available as a National Bureau of Economic Research work- ing paper, at www.nber.org/papers/ w16012. A Knowledge@Wharton article on the study is available at knowledge.wharton.upenn.edu/article. cfm?articleid=2721. 56 July/August 2011 BizEd