PHILADELPHIA -- It would be wrong to assume that the findings of a newly-released two-year study of Medicaid outcomes in Oregon is conclusive evidence of the worth -- or lack of worth -- of Medicaid, says University of Pennsylvania health economist Dan Polsky.
He was one of a number of University of Pennsylvania health care experts who weighed in on the work of economist Katherine Baicker and colleagues published in the latest edition of the New England Journal of Medicine. After
Dan Polsky, PhD, MPP, is Director of the University of Pennsylvania's Leonard Davis Institute of Health Economics (LDI) and a professor of both Health Care Management at The Wharton School and Medicine at Penn's Perelman School of Medicine.
Mark Pauly, PhD, is an LDI Senior Fellow and Professor of Health Care Management and Business and Public Policy at the University of Pennsylvania's Wharton School.
Scott Harrington, PhD, is an LDI Senior Fellow, a Professor of both Health Care Management and Insurance and Risk Management at the Wharton School, and Academic Director of the Penn/Wharton Risk and Insurance Program.
David Rubin, MD, MSCE, is an LDI Senior Fellow, an Associate Professor of Pediatrics at Penn's Perelman School of Medicine and Children's Hospital of Philadelphia, and Co-Director of CHOP's PolicyLab.
conducting a 24-month randomized-controlled trial involving more than 12,000 Oregonians, those researchers concluded that:
"Medicaid coverage generated no significant improvements in measured physical health outcomes in the first two years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain."
Sensational headlines Some major U.S. news outlets, like Forbes Magazine, have used the "no significant improvements" part of that quote as their story headline in a manner that implies Medicaid's overall failure.
Polsky, Executive Director of Penn's Leonard Davis Institute of Health Economics, one of the country's largest health policy research centers, cautioned that because of the study's limited power for detecting reasonably sized effects, "It would be a mistake to conclude that the health effect of Medicaid is small or not worth the money."
He believes the study provides an opportunity to update prior beliefs based on the strong standard of evidence, even if it does not provide a definitive answer.
But he adds that the measures selected for study likely reflect strong prior beliefs that insurance generally, and Medicaid specifically, can have a large impact on population health across a wide range of domains. "These strong priors may need to be updated, he said."
Statistically significant Similarly, he notes that those with strong prior beliefs "that Medicaid is a total waste, or possibly harmful," should update their beliefs given the study's statistically significant findings.
The study took advantage of a natural experiment that occurred when Oregon conducted a lottery in 1998 to expand Medicaid coverage to 30,000 able-bodied, low-income adults. The "winners," chosen at random from a waiting list of 90,000, could apply for Medicaid coverage, and the others could not, and mostly remained uninsured. That gave rise to two randomly selected groups in which to study the effects of Medicaid on health, health care utilization, and finances -- the "gold standard" of evidence to inform health policy.
14 million people The findings are of acute interest now, given that roughly 14 million people may gain Medicaid coverage when the Affordable Care Act is fully implemented.
"I was very disappointed that there was not a significant connection between coverage and the kind of health indicators that are supposed to be sensitive to access to care," said Penn health economist Mark Pauly. "The most devastating finding was no significant effect on health even for populations at high initial risk. If there are going to be effects on physical health, this tells us they will either be small or delayed, or both."
Pauly pointed out that, "The study did show that, despite its flaws, Medicaid works like other insurances, stimulating moral hazard. That refutes those on the far right who say it is such terrible insurance that it does not do anything."
Effects on mental health He also noted that the effects on mental health were more positive, and speculates that "because insurance reduced the chances a household would have enormous out-of-pocket payments relative to its income, that kept people from being depressed about finances."
Scott Harrington, Academic Director of the Wharton/Penn Risk and Insurance Program, concurs. "The results indicate that Medicaid coverage improved enrollee welfare by reducing financial strain and, somewhat surprisingly, by improving mental health. The lack of improvement in measures of enrollees' physical health, albeit only over 2 years, undermines the view that expanding health insurance in general and Medicaid in particular will generate substantial improvements in overall health." But he notes that these findings are consistent with prior studies of the relationship between health and insurance using non-randomized, observational data.
For David Rubin, Co-Director of the Children's Hospital of Philadelphia's PolicyLab and a Penn pediatrician whose research has focused on health policy and practice for vulnerable populations, the findings were not entirely unexpected. "The impact of the Medicaid expansion is one that will be played out over many years, and our knowledge of implementation research in general and the impacts of prevention suggest that we wouldn't expect population outcomes to change dramatically in the early years. As the current study shows, we would expect utilization for enrollees with chronic disease to increase early on after obtaining health insurance coverage."
Highly polarized politics Rubin cautions that in this highly polarized political environment, "There are many that look at a snapshot-in-time study like this to entrench currently held positions." He takes a longer view.
"The more relevant question is whether co-morbidities and associated outcomes downstream will change over a longer horizon of many years. Our knowledge of prevention and health maintenance would say yes, and there are early indicators of that trend even in these data," he observes.
Nevertheless, the study seems to have tempered some of the enthusiasm, and downgraded some of the expectations, for the upcoming ACA reforms. "The study's overall findings suggest that the Affordable Care Act's Medicaid expansion and premium / cost sharing subsidies for the purchase of health insurance could provide less bang for the buck than had been hoped," Harrington says.
Pauly is even more pessimistic. "It is looking more and more like health reform is really just a financial transfer to lower income families, something I personally would favor but without a lot of benefits for health outcomes. If we just want to tax and transfer, we do not need Medicaid to do it."
He continues. "I am even more concerned that, with these modest results among the terribly poor, what should we expect the $100 billion plus we will spend on subsidies to the non-poor uninsured in the exchanges will buy us? Other than more medical spending growth."
But Rubin thinks we could be buying far more than that. "What was most remarkable to me was the reduction in mental health problems by those who were insured even as utilization increased. If one trusts the decades of research about the intersection of mental health and future co-morbidities, then this early indicator would suggest that if sustained, we are likely to see benefits in quality of life and improved health outcomes downstream that far outweigh the early increased utilization that we are seeing."
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Janet Weiner, MPH, is Associate Director for Health Policy at the Leonard Davis Institute of Health Economics.
