Health Insurance Health Reform Medicaid

The Most Important Health Policy Study of Our Generation

Perhaps the most important paper on the effect of health insurance on health, spending, and access to care was released this week. Although randomized controlled trials are rare for measuring the effect of insurance, the design of the Oregon Medicaid program introduced random variation into who received Medicaid coverage.  The authors write:

In 2008, Oregon initiated a limited expansion of its Medicaid program for low-income adults through a lottery drawing of approximately 30,000 names from a waiting list of almost 90,000 persons. Selected adults won the opportunity to apply for Medicaid and to enroll if they met eligibility requirements. This lottery presented an opportunity to study the effects of Medicaid with the use of random assignment.

The best objective, concise summary of the results of this study were written by Ashish Jha at The Health Care Blog.  He lists the following six primary conclusions.

  1. People with Medicaid used more healthcare services – more doctor visits, more medications and even a few more ER visits and hospitalizations, though these last two were not statistically significant.
  2. People with Medicaid were more likely to get lots of tests – some of them probably good (cholesterol screening, Pap smears, mammograms) and some of them, probably bad (PSA tests).
  3. People with Medicaid, therefore, not surprisingly, spent more money on healthcare overall.
  4. People with Medicaid were less likely to go bankrupt due to healthcare expenditures.
  5. People with Medicaid had less depression and overall, had better health-related quality of life.
  6. People with Medicaid did not have meaningful improvements in their hypertension, cholesterol, diabetes, or other measures of overall health.

Whether or not the results of the study indicate that Medicaid is worth the money certainly depends on ones political affiliation.

Michael Cannon of the Cato institute says there is only one way to interpret the results, (to paraphrase) Medicaid is a failure.

There is no way to spin these results as anything but a rebuke to those who are pushing states to expand Medicaid. The Obama administration has been trying to convince states to throw more than a trillion additional taxpayer dollars at Medicaid by participating in the expansion, when the best-designed research available cannot find any evidence that it improves the physical health of enrollees. The OHIE even studied the most vulnerable part of the Medicaid-expansion population – those below 100 percent of the federal poverty level – yet still found no improvements in physical health.

Cannon uses the results to advocate an end to Medicaid expansions.

Others take the silver lining approach.  Mike Miesen writes in The Health Care Blog there were some health improvements (although not of the statistically significant variety).

But these figures should be taken in context: because the sample sizes for the above conditions were relatively small, statistically significant outcomes look more disappointing than actual outcomes. For example, the prevalence of hypertension decreased by 7.16% in the Medicaid covered population – a “[change] that would be considered clinically significant.” A larger study population could have shown this finding to be statistically significant, too.

In addition, the study unearthed a number of encouraging findings. Compared to the control population, Medicaid enrollees were 30% less likely to self-report depression; more likely to utilize health care services, including using more prescription drugs, making more visits to the clinic, and having more cholesterol-level screenings done (which increased by almost 50%); and more likely to report higher levels of self-judged health.

Ezra Klein also puts a positive spin on the article.

The Incidental Economist makes a good point that it is important to control expectations.

What is reasonable to expect? How much does private insurance affect these values [health outcomes]? Do we know? No. There is no RCT of private insurance vs. no insurance.

Austin Frakt provides a more detailed summary of the results.  Compared to the uninsured group, those in the Medicaid group:

  • received 30% more hospital care,
  • received 35% more outpatient care,
  • were 15% more like to use prescription drugs,
  • received 60% more mammograms,
  • received 20% more cholesterol checks,
  • were 15% more likely to have had a blood tested for high blood sugar or diabetes,
  • were 45% more likely to have had a pap test within the last year (for women),
  • had lower out-of-pocket medical expenditures and medical debt,
  • had a 40% lower probability of needing to borrow money or skip payment on other bills because of medical expenses,
  • incurred $778 more in spending on health care in one year, a 25% increase over the uninsured mean spending level,
  • were 25% percent more likely to report themselves in “good” or “excellent” health,
  • were 70% more likely to have a usual source of care,
  • were 55% more likely to see the same doctor over time,
  • reported better physical and mental health,
  • were 10% percent less likely to screen positive for depression.



  • Katherine Baicker, Ph.D., Sarah L. Taubman, Sc.D., Heidi L. Allen, Ph.D., Mira Bernstein, Ph.D., Jonathan H. Gruber, Ph.D., Joseph P. Newhouse, Ph.D., Eric C. Schneider, M.D., Bill J. Wright, Ph.D., Alan M. Zaslavsky, Ph.D., and Amy N. Finkelstein, Ph.D. for the Oregon Health Study Group. The Oregon Experiment — Effects of Medicaid on Clinical Outcomes. N Engl J Med 2013; 368:1713-1722May 2, 2013DOI: 10.1056/NEJMsa1212321

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