Priceless: Chapter 15

This post does double duty. It’s a TIE-U post associated with Karoline Mortensen’s Introduction to Health Systems (UMD’s  HLSA 601, Fall 2012). For other posts in this series, see the course intro. It’s also about Chapter 15 of John Goodman’s book Priceless.

In Chapter 15, John covers Medicaid, as does Mortensen in her class this week. John’s treatment provides abundant grist for the adversarial* mill. Before I get to it, I want to make something perfectly clear. One can defend Medicaid as better than no insurance without implying that Medicaid is a great program needing no reform. That’s my position. By the same token, one can advocate changes to Medicaid without having to resort to preposterous claims that it is worse than no insurance at all. That’s how I choose to do it. But it is not the approach taken by some of the scholars and commentators that Goodman cites.

Here are a few quotes from the chapter:

Another study found that even the uninsured have an easier time making doctors’ appointments than Medicaid enrollees.4 [Reference 4 is to an ungated JAMA study by Brent Asplin and colleagues.] […]

The academic evidence suggests that there is a severe quality problem in Medicaid. Here are some studies identified by American Enterprise Institute scholar Scott Gottlieb.13 [Reference 13 is to a Wall Street Journal column.][…]

Here are some additional studies identified by Forbes health blogger [now Romney adviser] Avik Roy.18 [Reference 18 is to a post at National Review Online.] […]

Frakt points to some studies finding that Medicaid makes a positive difference over being uninsured.27 But the results would probably have been just as good or better if we spent the money giving free care to vulnerable populations. Moreover, even with their Medicaid cards, enrollees turn to emergency rooms for their care twice as often as the privately insured and the uninsured. [Reference 27 is to this post by me.]

John’s dismissal just above of my post (his ref 27) is, in the first sentence, speculation (hence his “probably”) and, in the second sentence, not germane. (It is germane to something else.) But, I do want to express kudos to John for raising both sides in the Medicaid outcomes debate, though he gives far more space to the Gottlieb-Roy view — that Medicaid is worse for health than no insurance at all — than to mine. The avalanche of studies provided by them, which John lists, sure gives the impression the body of evidence is on their side. It isn’t. Take a look at this post that goes through Gottlieb’s favorite studies. None of them provide a causal estimate of the effect of Medicaid on health, and they say that explicitly. They suffer selection bias. Same goes for Roy’s cited studies. As for the Asplin study (John’s reference 4 in the quote above), it doesn’t say what John wants you to think it does.

As some readers may know, this battle over interpreting Medicaid outcomes studies motivated a thorough literature review by yours truly of studies that use methods capable of yielding causal estimates. I followed that with a (peer reviewed) paper in NEJM co-authored by Aaron, Harold, and Uwe Reinhardt. You can also consult the Oregon Health Study, which provides the least ambiguous illustration of Medicaid’s positive effects on health. Though it is true, as John points out, as do the study’s investigators, that much (but not all) of the effect documented in that study occurred after Medicaid enrollment but before much care was delivered, it’s still an effect of (randomized!) Medicaid selection. Winning the Medicaid lottery can reduce stress and, thereby, be good for health. The study investigators offer other explanations for why immediate effects aren’t comparable to later ones, but getting into them is beyond the scope of this post.

With all the resources linked to above, you have all you need to inform yourself of the truth about Medicaid and outcomes. If you still want to believe John et al. that Medicaid is worse for peoples’ health than nothing, I can’t stop you. I am, however, still waiting for someone to articulate the mechanism. After all, nobody is obligated to enroll in Medicaid or to show their Medicaid card. One can always pay out of pocket to non-Medicaid providers.

Pertaining to Medicaid block grants, John tells the story (or a story) of Rhode Island. Aaron tells a different one. About privatizing Medicaid saving money, the study that shows otherwise by Mark Duggan and Tamara Hayford is worth knowing about. About the size of refundable tax credits that John wants to offer consumers as part of a Medicaid reform, he writes,

Some may worry that the $8,000 refundable tax credit [per year for a family of four] would not be sufficient to purchase adequate health insurance, and the private package could be worse than Medicaid itself. This is not something I worry about. Surely private entrepreneurs can produce a better health plan for $8,000 than what Medicaid offers. But just in case the critics are right, let’s keep traditional Medicaid around as a stopgap. Let people choose between Medicaid and private insurance, and let the government’s $8,000 check go to the plan they choose.

Let’s get one thing straight, $2,000 per individual per year for health care is a legitimate concern. John notes in the chapter that in 2007, per person Medicaid spending was $5,163. So, John’s plan is to severely underfund Medicaid. You can’t say, “But this is for a catastrophic policy, which is cheaper,” because Medicaid beneficiaries can’t afford deductibles on those policies either. You can’t say, “But this is just for kids and adults, not the elderly,” because (a) John didn’t say that (or did I miss it?) and (b) even if he did, the fact is that adults cost more than $2,000 per year, and especially so if they are blind or disabled or are BCCA (Breast and Cervical Cancer Act) eligible women. Heck, foster kids cost more than that too. If critics are right, John’s stopgap is to let traditional Medicaid buy coverage for that same (too) low price. How is that a reasonable stopgap? It isn’t. If critics are right then $2,000 per individual on average is not enough and a stopgap is to spend more, not the same amount.

In any case, why not let a competitive market involving public and private plans establish the right price? Maybe it is $2,000. Maybe more. Maybe less. Competitive bidding anyone? I’m surprised this idea never appeared in John’s book. Why not?

I will post on Chapters 16 and 17 on Thursday. All posts in this series found at this link.

* My ambition in this series on John’s book is not to be adversarial. I hope that’s clear. But I’m human, and sometimes I get annoyed when the same errors are made repeatedly by people who have the ability to know better.


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