Thursday, July 7, 2011

Is Having Medicaid Better than Being Uninsured?

One of the big items in the news this morning was a study published by the National Bureau of Economic Research that was released overnight regarding the impact of Medicaid coverage.  The study examined 10,000 Oregon residents who were selected for a Medicaid expansion by lottery, and compared their outcomes to those who “lost” the lottery and remained uninsured.

Some news reports have claimed that the study proves “Medicaid does make a difference after all,” due to the prime conclusions that Medicaid beneficiaries had higher medical utilization, lower out-of-pocket costs, and better self-reported health.  However, the results are FAR more nuanced than that.  Among the key points to consider:

  • The study was funded by both the Administration – specifically HHS’ Office of Planning and Evaluation and CMS – and liberal think-tanks like the Robert Wood Johnson Foundation, all of which have interests in promoting the benefits of Obamacare’s Medicaid expansion.
  • The study notes “there is no discernible impact of insurance on emergency room or inpatient hospital use” from new Medicaid coverageIf accurate, this finding would undermine one of the arguments for Obamacare – that expanding coverage through Medicaid will reduce unnecessary emergency room visits.
  • The authors note that “we do not believe our…estimates are capturing an initial, highly transitory surge of ‘pent up demand’ for health care among the uninsured.”  This is a somewhat surprising development, which raises questions why the uninsured did not feel the need to obtain health services immediately upon enrolling in Medicaid.
  • While the authors found a decrease in financial pressures among new Medicaid beneficiaries, they did not find a statistically significant reduction in the most extreme examples of financial strain (e.g., bankruptcies, liens, etc.).  While this development could be based on a “pipeline” effect (bankruptcies can take years to develop, and the study examined only one year of available data), the authors note their conclusion contrasts with the findings of another study released this year.
  • The study notes that “we do not detect any statistically significant improvement in survival probability” from obtaining Medicaid coverage.  This development could be due to the relatively young and healthy nature of the expansion population, but it still suggests that, when it comes to the ultimate arbiter of health, Medicaid’s impact is far from definitively proven.
  • Although the authors note an increase in self-reported health status for the new Medicaid beneficiaries, they repeatedly note that the “measures could reflect a more general sense of well-being rather than actual improvements in objective health.”

The bottom line conclusions of this study:  When enrolled in a program Medicaid charging no more than a $20 monthly premium that provides health care “with no consumer cost sharing,” beneficiaries obtain more care, undergo less financial strain, and feel better about their own health as a result.  These findings are all logical conclusions, but don’t necessarily make a definitive case for Medicaid’s health care benefits.

The most interesting limitation about this Oregon study is that, while it quantifies the amount of additional health care new Medicaid beneficiaries received, it doesn’t examine the quality of care received, nor the outcomes for Medicaid patients.  Scott Gottlieb’s March article in the Wall Street Journal cited several studies indicating that when it comes to such episodes as cardiac procedures and lung transplants, Medicaid patients have worse outcomes than uninsured patients, even after controlling for socioeconomic and other factors.  Studies of that nature arguably provide a better comparison of Medicaid’s bottom-line impact on the health of patients, as opposed to arriving at the logical (and slightly obvious) conclusion that providing taxpayer-funded coverage without cost-sharing relieves beneficiaries’ financial stress.

So is having Medicaid better than remaining uninsured?  To quote the Magic 8-Ball, the answer here is still “Ask Again Later…”