What the Oregon Study Says (or Doesn’t) About Medicaid

Health care wonks are having a field day.

“This study is monumental,” said Stan Rosenstein, principal adviser at Health Management Associates. “Health care analysts will never have another opportunity like this.”

The results of the so-called Oregon Health Study, which appeared in the New England Journal of Medicine earlier this month, prompted a firestorm of commentary from health care and health policy experts. Many health care blogs have weighed in on the study, and a deep gulf has emerged between those who think the findings confirm the mission of the Affordable Care Act to expand Medicaid and those who think the results are proof that the program is ineffective.

The Study

The study sought to examine the effect of Oregon’s decision to open its Medicaid program to low-income adults in 2008 through a lottery system. Overall, 89,824 state residents entered the lottery.

About two years after the lottery was conducted, researchers at the Harvard School of Public Health and Massachusetts Institute of Technology obtained data from 6,387 adults who were randomly selected to be able to apply for Medicaid coverage and 5,842 adults who were not selected. Researchers compared the two groups’ health care use and outcomes.

The Oregon Health Insurance Experiment is the first and only randomized, controlled trial to study the effects of having insurance through Medicaid and not having any health insurance.

The researchers “endeavored to show nothing less than the actual, causal effect that Medicaid has on its population, a first in the field,” Mike Miesen writes on The Health Care Blog, adding, “This study, in other words, is a big, big deal.”

The Findings

The study’s major findings include that Medicaid beneficiaries used more health care services — such as physician visits and medical tests — and spent more on health care than those who remained uninsured.

Findings also show that Medicaid beneficiaries were less likely to go bankrupt because of health care expenditures, reported less depression and overall had better health-related quality of life.

In addition, Medicaid beneficiaries did not see significant improvements in their hypertension, cholesterol, diabetes or other overall health measures.

Split Reactions to Study

The reactions to the findings run the gamut.

Michael Cannon writes at “Cato at Liberty,” “Consistent with lackluster results from the first year, the OHIE’s second-year results found no evidence that Medicaid improves the physical health of enrollees. There were some modest improvements in depression and financial strain — but it is likely those gains could be achieved at a much lower cost than through an extremely expensive program like Medicaid.”

However, some of the findings make a “pretty compelling case for Medicaid expansion,” Miesen argues, especially those noting “less depression, more access to physicians and pharmaceuticals, and a near-elimination of catastrophic, life-changing medical expenditures.”

Rosenstein — a former head of Medi-Cal, California’s Medicaid program — told California Healthline that the findings are “very positive” for Medicaid. Creating more access to care is an “enormous achievement,” he said, especially considering that most of the study participants started off with having little money and no access to health insurance. He added, “Let’s remember that there is no demonstration that has proved that even private health insurance — even Cadillac health plans — actually improve health outcomes.”

Meanwhile, over at The Incidental Economist, Aaron Carroll and Austin Frakt call the results “mixed.” They write, “Medicaid may not be perfect, but we don’t think being uninsured is better. This new study supports this view, though certainly not as strongly as it might have.”

Ashish Jha of The Health Care Blog seems to agree with Carroll and Frakt’s assertion that the findings are a mixed bag. Jha writes that the vast majority of analyses falling clearly on one side of the debate or the other “are reflex, rather than reflection.” Jha continues, “The study seems to serve as a Rorschach test of sorts, confirming people’s biases about whether Medicaid is ‘good’ or ‘bad.’ The proponents of Medicaid point to all the ways in which Medicaid seems to help those who were enrolled — and the critics point to all the ways in which it didn’t.”

‘Limits to the Generalizability’

But is all the conjecture ultimately moot when considering the study’s limitations?

According to the study authors, “[T]here are several important limits to the generalizability of our findings,” including that the low-income uninsured population in Oregon differs from that population across the U.S.

In addition, the “estimates speak to the effect of Medicaid coverage on the subgroup of people who signed up for the lottery and for whom winning the lottery affected their coverage status,” the study researchers write, noting that such coverage “may have different effects for persons who seek insurance through the lottery than for the general population affected by coverage mandates” under the ACA.

Another limitation, they write, is that “newly insured participants in [the] study constituted a small share of all uninsured Oregon residents, limiting the system-level effects that insuring them might generate, such as strains on provider capacity or investment infrastructure.” Lastly, the researchers note, “[W]e examined outcomes in people who gained an average of 17 months of coverage,” adding that “the effects of insurance in the longer run may differ.”

Lead study author Katherine Baicker, a professor at Harvard University, told California Healthline that observers are free to use the findings however they want. “We hope that our research is worthwhile, even with the caveats we described,” she said. “What analysts do with it is beyond our scientific purview.”

However, she reminded the health policy world that the study does not say that there was no improvement in participants’ physical health, just that the researchers could not detect it. She also stressed the importance of the “big drop in depression” among Medicaid beneficiaries, as “mental health is something that often is ignored in this type of population.”

In addition, she said that a decline in catastrophic out-of-pocket expenses among beneficiaries runs counter to assumptions that low-income individuals use a lot of charity care. “Obviously, those people were paying for care before they became enrolled in Medicaid if we saw such a big decline in out-of-pocket expenses,” she said.

The Need To Improve Health Outcomes

Rosenstein said, “Can Medicaid be improved? Sure. Every Medicaid director in the country will tell you that.” He added, “Now that the study has been released, we need to look at what we can do to improve health care outcomes.” Fittingly, the ACA already is pushing in that direction by tying reimbursements to health care outcomes, according to Rosenstein.

Miesen agrees with the aim, noting, “If nothing else, this study should illuminate the need for better health coverage, not just more; merely having the insurance isn’t enough if it’s not paired with the right type of intervention.”

Weekly Roundup

Here’s a quick look at other health reform-related news.

Are Online Health Clinics the Wave of the Future? Jason Shafrin at Healthcare Economist is skeptical, saying that many of the perceived savings described in a recent Health Affairs article are the result of “patient sorting.”

Someone Has To Pay: Faced with lower-than-expected funding to implement the Affordable Care Act, HHS Secretary Kathleen Sebelius has been soliciting donations to a campaign focused on implementing and raising awareness about the ACA, which Republicans say is an improper tactic, Sarah Kliff writes in the Washington Post‘s “Wonkblog.”

Bring Down Medicare: The common maxim that increased longevity will bankrupt Medicare is partially fact and partially fiction, according to Richard Kaplan of The Health Care Blog.

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