There’s been some chatter about how the Oregon Medicaid study is or might be biased. That’s worth a post!
There’s a precise way in which the study is not biased. By design it estimated the effect of Medicaid on those who won the lottery and enrolled, relative to those who lost the lottery and did not. This estimate is unbiased for the contrast between precisely these two groups, but not necessarily for others. In econometric jargon, this is known as the “local average treatment effect” (LATE). The “treatment effect” part of “LATE” is clear, but what’s this “local average” business?
Sigh. I hate this terminology. It’s supposed to evoke the idea that the instrument (the lottery in this case) doesn’t have a “global” effect on study participants, causing all randomized to Medicaid (lottery winners) to be on and all those randomized to control (lottery losers) to not be. It has a more modest, “localized” effect. The other jargon used for this is that the LATE estimate is an estimate of the effect of treatment on “compliers.” That’s a more meaningful term to me. The compliers are those that do what randomization “tells” them to do, they enroll in Medicaid if randomized to do so and they don’t if not.
Of course, you can’t expect full compliance in this study (or many other RCTs) because some lottery winners turned out to be ineligible for Medicaid by the time they were permitted to enroll. Some had too high income. Some moved out of state. Some may have found other sources of coverage. (You had to have income below 100% FPL, live in state, and uninsured for 6 months to be permitted to enroll.) Also, enrollment wasn’t mandatory. So, if you just decided it wasn’t worth the trouble or didn’t receive or notice the letter inviting enrollment, you might have missed the window (45 days is all they gave you).
On the flip side, nobody was preventing lottery losers from enrolling on Medicaid if they became eligible in another way. The study pertained only to the expansion of Medicaid beyond the statutory requirements. If people ended up in one of the eligible categories (aged, blind, disabled, pregnant) they could get on Medicaid.
So, there was considerable “crossover” (lottery losers enrolling in Medicaid, lottery winners not) or “contamination” or “noncompliance,” all jargon for the same thing. This was not a perfect RCT. Few are.
What to do? The investigators did two things. First, they considered an “intent-to-treat” (ITT) approach, comparing lottery winners to losers no matter whether they enrolled in Medicaid or not. These results are in their first year paper. I’ve forgotten what they say specifically, though in general they’re much smaller effects than the LATE results. The concern with ITT is that all this crossover biases the results toward zero. There isn’t as much contrast between study arms due to noncompliance.
Next, the investigators provided LATE estimates, about which I wrote above. These are unbiased for contrast among compliers. In this study, they’re about four times the size of the ITT estimates by virtue of the mathematics (“instrumental variables“) of LATE. But they need not be the same as one would find in the absence of noncompliance. There may be bias in that sense. Why?
- Hypothesis 1: Those who took the trouble to enroll in Medicaid were sicker than those who didn’t. After all, why enroll if you don’t need it? Remember, even some lottery losers (18.5% of them) enrolled in Medicaid. The LATE estimate removes the effect of them since they are noncompliers. Also, some lottery winners didn’t enroll (most of them didn’t) and the LATE estimate removes their effect too. What’s left under this hypothesis is a comparison of relatively sicker people who did enroll in Medicaid with relatively healthier people who didn’t. The investigators actually found some evidence to suggest that Medicaid enrollees are sicker. Many other studies find that Medicaid enrollees are sicker to the point that some studies find an association of Medicaid with increased mortality. Under hypothesis 1, results are biased downward relative to what they would be under full compliance. Medicaid looks less effective than it might otherwise be.
- Hypothesis 2: Those who are more organized, better planners, with higher cognitive function and literacy (including health) skills enroll. It takes some awareness and planning to enroll, so there is some face validity to this argument. I’m aware of no evidence to support it though. (Got any?) Under this hypothesis Medicaid enrollees would do a better job of getting and staying healthy even apart from whatever Medicaid does for them. This would bias results toward showing a larger Medicaid effect than would be true in general (under full compliance).
There may be other hypothetical sources of bias. The point I’d make about all of them is that we don’t know whether any of these biases actually exist and, if they do, how big an effect they have. It’s all speculation. Still, LATE is an unbiased (and causal) estimate of the effect of Medicaid on compliers. It does filter out some who want to be on Medicaid and can’t enroll (lost lottery, no other route) and filters out some who enroll but weren’t invited (lost lottery but became eligible another way). Some of these noncompliers could be unusually sick. Some noncompliers could be unusually organized and aware. LATE filters some of them out.
Some might wonder about another type of estimate one could do, the effect of “treatment on the treated.” Here one just compares Medicaid enrollees to non-enrollees, ignoring the lottery draw. Unfortunately, this just exacerbates whatever bias might exist. There is no random assignment at play here. There’s no filtering for selection at all. You get an association, not a causal estimate. This is the problem with many studies of Medicaid and insurance. Randomness is key. The lottery should be exploited in some fashion (either ITT or LATE).
Lastly, notice how complicated RCT interpretation is? Yes, it’s the gold standard, but it still has issues. Using an IV approach for a LATE estimate is, in my view, about the best you can do. But there may be bias when considering generalizing the findings outside the “local” effect of the instrument (lottery or random assignment). These concerns arise with any IV study. In this sense, IV and RCT are much closer cousins than one tends to think. Disparage one and you disparage the other.
Not all that’s gold glitters, but it is still valuable.