• How should the new Medicaid study change our policy preferences?

    This is a joint post by Austin Frakt and Aaron Carroll, part of our continuing coverage of the new Medicaid study.

    Tyler Cowen isn’t the only one to have suggested that the new study should be an opportunity to reflect on policy preferences. His post is very good.

    The key question here is how we should marginally revise our beliefs, or perhaps should have revised them all along (the results of this study are not actually so surprising, given other work on the efficacy of health insurance).  For instance should we revise health care policy toward greater emphasis on catastrophic care, or how about toward public health measures, or maybe cash transfers?  (I would say all three.)  One might even use this study to revise our views on what should be included in the ACA mandate, yet I haven’t heard a peep on that topic.  I am instead seeing a lot of efforts to distract our attention toward other questions.

    We think it is important to keep striving for better policy, and evidence-informed policy in particular. We welcome new and different ideas, but insist on reconciling them with evidence. Austin’s evidence-based examination of health policy books like those by John Goodman and David Goldhill, along with consideration of all major, new health policy proposals by various authors here, is evidence of that. So, we welcome the conversation Cowen suggests and offer the following thoughts.

    First of all, as evidenced by our latest post, we’re still digging into the details of the new Oregon Health Study results. If, as it seems, it was underpowered, it does not provide as clear guidance as we might have hoped. Either way, as Cowen points out, the study doesn’t differ from what we know from prior work. How much should it change our thinking, then? Or yours? It’s quite reasonable to say, “Not that much,” though it depends on your starting point. And that is (or can be) an evidence-based interpretation, whether that is incorrectly spun as a distraction or a dodge or not. Shouldn’t we all want to interpret the evidence properly before applying it to policy? Well, that’s our ambition.

    Nevertheless, some reconsideration of the Medicaid policy space is a worthwhile exercise because elected officials in many states are still contemplating whether to expand Medicaid and, if so, how. Let’s step back and look at that space.

    We had a long, national conversation about health reform in 2008-2009. This followed about a century of many, similar conversations. It culminated in the passage of a law by a process that was, in our view, no more or less legitimate than the passage of most other laws. The law, or parts thereof, was considered in the courts, including by the Supreme Court, and then reconsidered as part of the 2012 presidential campaign.

    Through all this, the law remains, though the Supreme Court adjusted it to offer states a choice about Medicaid expansion. The choice is not binary, whether to expand or not, but offers a circumscribed span of policy options. The Administration has been more flexible than it could have been in welcoming options that seemed impossible a year ago (e.g., Arkansas’s private option).

    The upshot is states have a choice today, as provided by the law and regulations, that includes no expansion of Medicaid and a range of other options. To be sure, that range is not infinite. There are things that the law, regulations, and the Administration would not accept. Those may include policy options preferable to many people, including conservatives, including liberals, including us.

    Unless and until the law and/or administration change, those options are not likely to expand much, especially by 2014. Within this space, and in light of the findings of the latest Medicaid study, and consideration of the body of work that preceded it, it is our view that expansion of Medicaid, in some fashion permitted today, is preferable to no expansion at all.

    You need not hold that view, but it is not an unreasonable one, even acknowledging the latest study.

    Now, going forward, we certainly think it is reasonable to continue to discuss how Medicaid might evolve. That’s fine. But, as we do so, we would hope that poor Americans would be afforded the greater access to the financial and mental and physical benefits of coverage for health care that Medicaid (in some form) would provide. We spend a great deal assisting wealthier Americans to do the same, through the preferential tax treatment of employer-sponsored plans, as well as through Medicare. All of that can and should be examined too. But by what reasonable moral calculus is it just to not extend medical financial assistance to the poor as we do so?

    Let us be clear, we recognize that those who object to Medicaid expansion have also stated they want to assist the poor. They just have other ideas of how to do so. Fine. Our question is, which is stronger evidence that you want to help poor Americans, that you will support Medicaid expansion while inviting continued conversation about how to make the program more efficient and effective? Or by blocking expansion and offering alternatives, alternatives that will take well beyond 2014 to enact and implement, if they ever are?

    For, one way to justify doing nothing is to continually suggest something else.

    We do not object to something else, unless that something else includes leaving poor Americans without the financial and health protections of at least Medicaid in 2014. States have a fairly wide range of choices as to what “Medicaid” means in their domains. We encourage them to pick one, and, yes, by all means continue to fight for change. Our pledge is to continue to consider proposals for it on this blog and in light of evidence.

    @afrakt and @aaronecarroll

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    • Hey, guys,

      While you are thinking about what you and I (and all the other policy wonks) want Medicaid to do, let;s also give a thought to what the people directly affected want. That seems to be the part that is always left out of the conversation.

      Interesting that three years after the enactment of the ACA, CMS finally did some market research to see who are these uninsured and what is it they want. Turns out most of them are not that interested in what the political elite enacted.

      Same with Oregon’s Medicaid expansion. I wrote about this on Goodman’s Blog — http://healthblog.ncpa.org/you-can-lead-a-horse-to-water/. Of the people who WON THE BIG LOTTERY!!! (Yippee!), only 30% actually enrolled. Apparently 70% were not all that interested.

      Just maybe, the conceit of the DC Elite — that everyone should want what they themselves want — is false. There may be a large minority of the population that is perfectly happy going to a public clinic or rolling down to the ER when they feel sickly.

      Goodman’s proposal of a universal tax credit (voucher) that is paid to safety net facilities for those who do not use it to buy health insurance is the ONLY idea out there that addresses this.

      Yes, this results in a two-tier system, but so what? Maybe we need different tiers for different folks.

      • Most people don’t need health care until they are sick. Most people are healthy most of the time. Hence, little interest in health insurance.
        However, once people get sick, they want to be able to see the doctor without taking a big financial hit.
        Most developed countries have set up a system which accommodates these facts. They have a health system which is available and affordable when people are sick without having to make complex decisions about what type of insurance, deductibles, co-pays, coverage limits, etc. when they are healthy and not really interested.
        It seems only in the US do we have this situation where the health care industry has created a complex system which no one can understand which serves to create large profits for the industry and doesn’t do a very good job of actually preventing or treating disease… and of course our national health care costs are twice that of other developed countries.
        It’s frustrating to see everyone arguing about different types of insurance and payment schemes which only perpetuate the inefficiencies of the current dysfunctional system when the problem has been solved by the other top twenty developed countries… universal coverage funded by a broad tax.

        • I agree with you Mark, except for this part:

          “Most people don’t need health care until they are sick. Most people are healthy most of the time. Hence, little interest in health insurance.”

          Most people do not need emergency healthcare at the same point in time, but throughout life healthcare is needed by everyone. The issue is, will it be available AND affordable ( no bankruptcy) when it is needed and what level of care is morally acceptable. This is the point of insurance. However the insurers, pharma, some providers, and politicians have created a gamed system which insures “profit” to them and marginal return on healthCARE when compared with other Western ( meaning rational/enlightenment) countries ( and even some 3rd world countries.

          We require preventative and emergency healthcare all of our lives. From birth control (male or female) or fertility treatments, to maternity care and post partum, immunizations and other public health, monitoring of growth and health throughout childhood, accidents and workplace health issues, to choking on a chicken bone.

          That being said , life expectancy in the past is often misunderstood. Besides some of the dark ages, life expectancy if one survived childhood illness and war, was actually not horrible. Now we have to worry about cancer and heart disease ( genetics and horrible food culture) affecting mortality. Public health and relative peace have helped this along quite a bit too.

          But most people forget that mortality is not the only objective. Morbidity, relief of pain and suffering, and lost human potential is also a moral goal ( in my opinion) .

          This is one of the reasons to question the cost/value of the current system, especially when one considers that this represents a significant amount our entire economy and the results to BOTH mortality and morbidity. If certain portions of society are utilizing this as a cash cow, raking ( a word Austin has used), 30% or more off of the top, it is 1) immoral and 2) unsustainable.

          It is important to raise questions to the programs of Obama or any other leader, even if we are more “liberal” or “progressive” than the the right wing punditry.

          Robert may be OK with the continuous hijacking of the commonwealth and commonsense for the utterly ridiculous levels of printed dollars a few percentage of this country absorbs, but I’m not.

          • I agree. I should have said “Most people don’t think they need health care until they are sick.”
            Most people don’t realize that they benefit from all kinds of health prevention and promotion activities from pre-natal care to immunizations and screening and testing programs. It’s hard to get them to pay for these services or to sign up and pay for insurance when they feel fine.

          • Besides some of the dark ages, life expectancy if one survived childhood illness and war, was actually not horrible.

            In the U. S. in 1900, life expectancy for a white male at birth was just over 48 years. for those who made it to age 20, life expectancy was about 62; and, those who actually made it to 60 had a life expectancy of a little over 74. In 2004 at birth it was almost 76, at 20 it was almost 77, and at 60 it was almost 81. Obviously, the huge jump was in life expectancy at birth (48 vs. 76), but there was also a significant difference at other ages (20: 62 vs. 77; 60: 74 vs. 81). Notice that the gap narrows again as age increases. An 80-year-old in 1900 had a life expectancy of about 85; in 2004 that was 88–but far fewer made it to 80 then than now.

            Note also that “During the 20th century, the number of persons in the United States under age 65 has tripled. At the same time, the number aged 65 or over has jumped by a factor of 11! ”

            “The ‘oldest old’ — those aged 85 and over — are the most rapidly growing elderly age group. Between 1960 and 1994, their numbers rose 274 percent. In contrast, the elderly population in general rose 100 percent and the entire U.S. population grew only 45 percent.(http://www.census.gov/population/socdemo/statbriefs/agebrief.html)

            Having a number of relatives who are alive into their 90s, I can tell you that without the health care they received as they advanced into their late 80s, none of them would have lived as long as they have. OTOH, my great-grandmother made it into her 100s and almost never saw a doctor.

        • Most people want and have health insurance. It might be better if you were correct because in that case spending would be much lower.

          • What was the penalty if one of the winners of the Medicaid lottery did not sign up? Were they disqualified from later receiving it?

            If not then only a 30% response rate is rational. Why fill out forms if you
            are currently healthy? The rationale thing to do is wait until you nned MEdicaid and then fill out the forms.

            • If you won the lottery and didn’t sign up within 45 days you could not get back in.

            • Bob,

              I agree, and that is why expanding eligibility for Medicaid is far different than expanding enrollment in Medicaid. Austin points out there was a penalty for non-enrollment in Oregon. There is no penalty for non-enrollment in Medicaid under the ACA.

              The same applies to coverage on the Exchanges, especially if employers drop coverage. People who have been passively enrolled on the job are not likely to make the effort to enroll on their own — UNLESS they are already consuming services.

              My contention has long been that, even if it is perfectly implemented on time and within budget, the ACA is unlikely to increase the number of people with insurance coverage.

      • It’s not at all that “70% were not all that interested.” First, about half of these people ended up being over income when their application was looked at. The complicated financial eligibility rules make it hard for people to know in advance if they qualify. Also, people’s income change, and a small income increase between the time one put one’s name in the lottery, and the time one’s application is reviewed can make a difference.

        Second, without a concerted, multi-cultural outreach effort, many people do not realize they are eligible. If people move, the mail may not be forwarded (low income people move a lot). If the person’s name is not on the mailbox, the mail may not be delivered (low income double up in other’s homes a lot). If the letter is not in your native language, you may not understand what it means (low income people often don’t speak English). People often don’t open official notices from a state agency.

        The ACA will try to improve on this by empowering community groups, and using text message and email in addition to paper notices.

        In Massachusetts, the RomneyCare law enrolled some 80,000 previously eligible but unenrolled people into Medicaid. The reason was all the hoopla around health care coverage, and a community outreach effort to reached into immigrant and low-income communities. Without this, the Oregon lottery naturally would experience a drop-off.

        Brian Rosman
        Health Care For All Massachusetts

    • This one made me chuckle.

      “We had a long, national conversation about health reform in 2008-2009.”

      This is just plain ridiculous. The discussion was neither long, nor national, nor comprehensive.

      “…no more or less legitimate than the passage of most other laws”

      See Larry Lessig’s lecture on Institutional Corruption. Also see Jeff Sach’s recent rant (finally) about financial corruption.

    • I’m pleased that Carroll and Frakt can be respectful to Obamacare critics, even if the critics aren’t particularly respectful to them. But then I’m southern, and being polite is as important as being right. As for the report and its authors, it’s possible to accept the results but not the conclusions the authors and others have drawn from those results. When Cowan refers to the “results” of the study, I suspect he really means the “conclusions” the authors (and Cowan) have drawn from those results. Americans are notoriously poor at math, statistics especially, making the job of explaining the relevance of the results of the study and what conclusions can be drawn from those results a difficult task. Finally, I’d like to add this reminder: the presidential candidate in 2008 who made universal insurance coverage the top priority for health care reform is now serving his second term.

    • Am I understanding correctly that the discussion includes an assumption that low/no-income humans do not benefit from healthcare but moderate/high-income humans do? Is the argument based on the existence of two physiologically different types of humans?

      If so, the inclusion of healthcare (health insurance or directly provided service as a work incentive or “benefit”) generations ago in the U.S. makes no sense. And I’m quite sure there are many people who remain in jobs they detest simply due to the fact that the job provides healthcare benefits.

      Our society has long acknowledged (unchallenged) that health insurance is desirable (regardless of levels or frequency of use by individuals). Why is there suddenly a concern that healthcare is of no value to at least half the populace?

      I sincerely hope I am misunderstanding this debate.

      As for Mr Scandlen’s assumptions (comment above) regarding low enrollment in Oregon’s minimum-healthcare-by-lottery, I would remind him that agreeing to take on the additional financial burdens of co-pays due to being insured is in the end voluntarily assuming another financial burden on inadequate income -and that amount is sure to increase substantially after seeing a doctor. My suspicion is that some would consider that to be untenable in their current financial reality. Likewise, generations have been conditioned to ignore their health unless in crisis (sometimes even when in crisis) because of the negative financial impacts on the household. I think it’s wrong to assume disinterest or apathy from one short-term experiment. For instance, what are the rates of participation in healthcare services accessed by low income humans in countries where there is low or no co-pay expected? I would find that more telling.

      Additionally, the U.S. does not exist in a vacuum; the long-term results of broad extension of health services is easily available from those countries which have had socialized medicine for decades. We are not inventing the wheel here.

    • I’m persuaded that the “in the weeds” analysis of the results overlook one statistically convincing result that bears directly upon the policy question. Referring to Table S4 data, I note that the mean increase in office visit frequency attributable to Medicaid access (column 3 data) represents 50% of the mean for the control group (!). Those with Medicaid had demonstrably enhanced frequency of care. Now, one can argue that the enhanced care was marginally clinically ineffective for the disease entities studied, but such a premise couldn’t ethically lead to the conclusion that care should be restricted exclusively for Medicaid recipients.

    • Is there *any* study that would cause you (Frakt and Carroll) or you readers, to conclude “well, medicaid isn’t a great plan, and once we start these things they are very hard to unwind, so we really do have to go away and do something else?”

      Is there any broad economic rule, along the lines of “providing medicaid past a certain cost level produces more unemployment and associated social stress than not providing” – or similar – that would cause you to change your views?

      (Same questions can be applied to “the right” of course.)

    • It seems clear that the author’s position on Medicaid expansion was not influenced by the previous evidence-based studies. If I am incorrect, please elaborate what conclusions from the previous studies were included in their position.

      The latest evidence-based study apparently will have the same level of influence.

      • After reviewing posts on this blog related to Medicaid (do some searching, we have a FAQ), please point to a study (or, better, a body of work) you think we may have overlooked. Happy to consider it.

        • Austin, if you aren’t familiar with it, I urge you to look at William Sommers’ Health Affairs article from a few years ago. He found that one-third of uninsured Medicaid-eligible children had been enrolled in Medicaid or SCHIP within the previous year, but the parents did not bother to re-enroll them. He offered the explanation that re-enrollment is complicated, but that isn’t persuasive. If they did it once, they can do it again IF they find value in it.

          • Not to argue with you, but logically speaking, it is possible for it both to be complicated (even for those who have done it once) and for it to be of low value. Are there studies that show how things change when either of those variables change? E.g., upon enrollment process simplification, what happens? Or, upon change in value (in some sense), what happens?

            In any case, it should be clear that we are not arguing against reforms to Medicaid. We’re arguing against withholding Medicaid in some form allowable today while we make those reforms.

            • I’m not aware of such a study, however I would think that if the coverage is highly valued people would make the effort to overcome the complication of re-enrollment.

              But you raise another thought that has long bewildered me — the lack of meaningful research into Medicaid. One would think it is a perfect situation for study — various states doing it differently. I have never even seen any comparisons of state Medicaid administration — does Ohio do it better than Missouri? Is there a model of effective administration other states could follow? Is there a payment scheme that works better than others? Is there an ideal method of eligibility determination and enrollment? As far as I know there has been no research on any of this (I could be wrong, of course).

              I share your devotion to evidence based public policy, so it is frustrating there is so little evidence.

            • I am sure there is a lot I do not know about the vast body of research. What you seek may be out there, but I’m not aware of it.

          • It occurs to me that one way to assess the “value” people put on Medicaid coverage might be to look at the enrollment behaviors of families whose members are healthy compared to families with one or more chronically ill children. I predict that healthy families are more likely to let coverage lapse while those with sick kids (I’m thinking conditions that require ongoing treatment here) will be very careful to submit all Medicaid redetermination forms.

            That seems like rational (although short-term) personal economic behavior to me. If I see frequent personal benefit from Medicaid it is worth my time and effort to keep it, if not maybe I can do something better with the time (and possibly $) it would take to complete all of the forms.

    • We spend a great deal assisting wealthier Americans to do the same, through the preferential tax treatment of employer-sponsored plans, as well as through Medicare.
      The preferential tax treatment of employer-sponsored plans show how hopelessly corrupt our government is, that along with the fact that our Governments run multiple plans. For example at the federal level medicare and federal employee programs for those who vote and have political power and medicaid for those who do not. We should not agree to give the politicians more power or money until the use what they have better. The voters should outraged but they are rationally ignorant so we need another way. My goal is to teach people how bad our politicians and Government programs are.