NEJM: Expanding Medicaid may not improve health outcomes

Medicaid coverage improves mental health, finances, study finds

Topics: Medicaid, Reimbursement, Finance, Payer and Regulatory Policy, Market Trends, Strategy, Health Policy

May 2, 2013

A new NEJM study suggests Medicaid might not improve health care outcomes, raising a flurry of questions for researchers and new doubts about the ACA's planned Medicaid expansion.

According to the latest update from the much-watched Oregon Health Study—which involves researchers from Harvard University, the Massachusetts Institute of Technology, and the National Bureau of Economic Research—obtaining health insurance appeared to lower  catastrophic medical expenses and reduce mental health problems for previously uninsured patients.

However, obtaining Medicaid coverage did not result in substantial, demonstrable improvements to physical health—a significant difference from many observers' expectations, the researchers concluded.

  • Is your registration process ready for Medicaid expansion? Learn how one health system improved its Medicaid-eligible patient identification and registration processes.

Background: Lottery turns Oregon into a 'laboratory' for Medicaid

Oregon's decision to expand its Medicaid rolls through a lottery system turned the state into a natural "laboratory for studying the effects of extending health insurance to people who previously did not have it," the New York Times observed. Specifically:

  • Nearly 90,000 state residents entered Oregon's 2008 lottery to gain access to Medicaid, but only about 10,000 individuals obtained coverage.
  • Researchers subsequently tracked the outcomes for 6,387 adults who were randomly selected to be able to apply for Medicaid coverage and 5,842 adults who were not selected.
  • Specifically, they focused on the adults' blood pressure, cholesterol and blood sugar levels, as well as screenings for depression, medication use, and out-of-pocket spending for various services.

Study finds limited evidence of improved health outcomes

Researchers did uncover some findings that suggested Medicaid led to improved outcomes and access.

For example, the adults who obtained Medicaid coverage were 30% less likely to have depression, compared with uninsured individuals. Medicaid coverage also virtually eliminated the risk of catastrophic medical expenses from a serious accident or the sudden onset of a life-threatening illness.

In addition, beneficiaries were nearly 10% more likely to report that their health status was the same or improved over the previous year, compared with uninsured individuals.

Beneficiaries also typically had higher use of preventive health care services, such as mammograms and cholesterol tests—but that increased their health care spending by at least 35% compared with those who remained uninsured.

The study's researchers noted that health care use did not spike or fluctuate in the insured group throughout the study period, dispelling some experts' theories that newly enrolled beneficiaries would be more compelled to see a physician and have their ailments assessed and then cease receiving care, the New York Times reports.

Meanwhile, the researchers found that while Medicaid beneficiaries had better access to care and were more likely to receive diagnoses and treatment for diabetes, they did not experience significant improvements in blood pressure, cholesterol, or blood sugar levels.

How will the study impact expansion efforts?

According to the Los Angeles Times, the study's findings could provide states with further insight into Medicaid and help them in deciding whether to expand the program under the Affordable Care Act (ACA). More than a dozen states, many of them led by Republican governors, have rejected the expansion. Some have argued that Medicaid is ineffective, while several other conservative critics have said the program is just as bad as having no insurance coverage.

Lead study author and Harvard professor Katherine Baicker says  the study "dispels two extreme arguments" about Medicaid:

  • Argument #1: Medicaid is "a waste of resources." That's "clearly not the case," Baicker concluded.
  • Argument #2: Medicaid "is a wonderful program that keeps people out of the hospital and that it provides all this preventive care that saves money." Given the findings, that's also not apparent, she added.

Reacting to the study, Obama administration officials suggested that the two-year analysis period might be insufficient to determine the benefits of Medicaid, particularly the physical health results for patients with chronic conditions who might be influenced by lifestyle choices. The officials also noted that only about 12,000 individuals were involved in the analysis, which is a relatively small population compared with the millions who would gain coverage under the ACA.

Zeke Emanuel—a former health policy adviser to President Obama—called the latest findings "disappointing" because they show that "there are benefits to providing Medicaid but that we also need to fix the system."

Meanwhile, some ACA opponents said states could use the results as a reason to reject the Medicaid expansion. Michael Cannon, the Cato Institute's health policy director, said, "This throws up a huge stop in front of" the expansion. John Goodman, president and CEO of the National Center for Policy Analysis, said the findings suggest "to me that Medicaid doesn't matter very much," adding, "A lot of people are way too focused on health insurance and not focused enough on health care" (Levey, "Politics Now," Los Angeles Times, 5/1; Lowrey, New York Times, 5/1; Alonso-Zaldivar, AP/U-T San Diego, 5/1; Kliff, "Wonkblog," Washington Post, 5/1; Baicker et al., NEJM, 5/2).

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