Second Thoughts On Medicaid From Oregon's Unique Experiment

Two years ago, a landmark study found that having Medicaid health insurance makes a positive difference in people's lives.

Backers of the program have pointed to that study time and again in their push to encourage states to expand the program as part of the federal health law.

Now the researchers have dug a little deeper into their data, and the new results, published in the latest New England Journal of Medicine, are not quite as uniformly positive.

"We don't see any improvements in this window in hypertension, high cholesterol or diabetes," said Katherine Baicker, a health economist at the Harvard School of Public Health and one of the lead researchers on the project.

The window Baicker is talking about is the period between 2008 and 2010 when researchers got to perform a rarely available public policy experiment. They compared a large group of similarly situated people with Medicaid in Oregon to a like-size group of people with no health insurance.

It happened because the state of Oregon found itself with just enough money to expand coverage to about 10,000 adults from a waiting list of 90,000.

As a result, Baicker said, the state "drew names from that waiting list by lottery, which provides randomization. The treatment group was selected in the lottery, and the control group didn't get that opportunity."

Overall, the researchers ended up studying about 20,000 people; half of whom got Medicaid coverage and half of whom didn't.

For the first part of the study researchers looked at things like how much health care people used, how much money they spent out of pocket, and whether they thought Medicaid improved their health.

Overall, the findings were uniformly positive. People with insurance used more care, spent less money. "We found big improvements in self-reported health," Baicker said. "We asked people how they felt, how their health interfered with their normal daily activities. And they reported substantial gains when they got Medicaid coverage, relative to the randomly assigned control group that didn't have Medicaid coverage."

For this current study, however, the researchers wanted to go a little deeper. Rather than just asking people if they felt better, they wanted to see if they actually were healthier after getting Medicaid coverage.

So they did personal visits that included medical tests, like blood pressure and cholesterol screening.

But the results there weren't so positive. There was no statistically significant difference between the Medicaid group and the control group in those measures.

The study did find, however, increases in the diagnosis and treatment of those common ailments in the Medicaid group.

And there was a significant decrease among the Medicaid population in the likelihood of being diagnosed with depression. "It was about a 30 percent decline in the probability of screening positive for depression among those who had Medicaid than among those who didn't," she said.

Baicker said there was also a clear financial benefit for those who gained coverage. "They're protected from catastrophic financial expenditures," she said. "Medicaid coverage virtually eliminates having medical costs that are more than 30 percent of your income."

But she says the study also shows that Medicaid coverage comes at a cost to society — and to taxpayers. "People on Medicaid consume a lot more resources and that means they spend more money," she says.

And is the additional money worth it? "I think we're not paying attention to a lot of the problems with Medicaid even as we try to expand it," said Scott Gottlieb, a physician and resident fellow at the conservative American Enterprise Institute. "And people seem to want to ignore the many flaws with the program."

Gottlieb says Medicaid can be fine for people who need only fairly routine care, or care in a hospital. But, in general, the program has been spread too thin over too many people.

"And for people who really need to access a lot of specialty services — particularly outpatient specialty services — in many states, in many cases you just can't get access to it in a timely fashion," he said.

Gottlieb is one of many who worry about the Affordable Care Act's call to dramatically expand a program they see as far less than perfect. "Merely expanding the program isn't resolving the challenges, and merely providing a little bit more money as the president did for primary care benefits under the program isn't going to resolve the serious challenges," he said.

One obvious way to resolve some of the lingering questions would be to look at what happens to those Oregon Medicaid recipients in the future. That, however, won't be possible.

Oregon found some extra money in 2010, said Baicker, and ended up giving people in the control group Medicaid coverage, too.

Good for them, but not so good for the research. But Baicker says the researchers still have a lot of data they haven't analyzed yet. So this particular debate over Medicaid's impact isn't quite over.