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Does expanding coverage improve health care?

May 5, 2014

    Dan Diamond, Managing Editor

    One of the trickiest questions in health policy seems like it should have an obvious answer:

      Does giving people health insurance lead to better outcomes?

    “We simply don’t know yet,” Kate Baicker told me last week.

    (And she would know; Baicker's among the nation's most prominent health policy researchers and an author of the Oregon Health Insurance Experiment, the landmark randomized trial into how expanding Medicaid coverage affects enrollees' lives.)

    The challenge in answering the coverage-and-outcomes question, as Baicker and other researchers have stressed, is that it's awfully tough to tease apart the potential factors.

    • Let's say mortality fell in a state after it expanded Medicaid. Could researchers be sure it was because of coverage expansion?
    • Alternately, what if it was because of providers' innovations? Or CMS's own reforms to improve care quality?
    • And if there was a clear link between expanding Medicaid and better outcomes, why didn't reseachers spot it in Oregon?

    That's why, even in the waning days of April, Baicker wasn't ready to publicly make the connection between coverage expansion and improved health care.

    But what a difference a week can make.

    On Monday afternoon, Baicker and two colleagues released a study that comes to a striking conclusion: Health insurance expansion did save lives in Massachusetts, after the state adopted its health reforms in 2006.

    Looking at the new analysis

    For this new study—led by Ben Sommers, Baicker's Harvard colleague, and co-authored with the Urban Institute's Sharon Long—the researchers reasoned out a unique way to see if Massachusettts' reforms were having an effect.

    As Sommers relayed in an interview on Monday:

      1. First, the researchers acknowledged their starting point and limitations: Simply comparing how outcomes changed in Massachusetts vs. Connecticut wouldn't have been especially informative, or taught them anything new. (A similar study was already done by Sommers, Baicker, and Arnie Epstein in 2012.)
      2. But what if you found comparable counties in nearby states, the researchers posited, and tracked mortality rates in the four years before Massachusetts' reforms versus the four years afterward?
      3. And further, what if you specifically looked at conditions that were “amenable to health care”? (Or as The New Republic's Jonathan Cohn puts it, the researchers screened for data "on cancers, various cardiac problems, and other conditions that, with better medical care, people should be more likely to survive.")

    The authors eventually determined that mortality in Massachusetts declined almost 3% relative to control counties, in the four years after the state's health expansion was rolled out. Mortality related to health care-amenable conditions fell by 4.5%.

    Translated to a broader population: For every 830 people who got coverage, one premature death was prevented.

    And the effects were more noticeable in "counties with low income and low pre-reform insurance rates—the counties we would expect to be most favorably impacted by reform," Adrianna McIntyre writes at The Incidental Economist.

    "The findings aren’t bulletproof, but they’re close," McIntyre adds.

    What it means

    The study could have a big effect in the policy and political worlds.

    Four years after Massachusetts expanded coverage, mortality fell by almost 3%.

    For many researchers, the findings are long-awaited evidence that coverage expansion drives health improvements and is linked with clear social good. (In an accompanying editorial, Austin Frakt chronicles some of the ways that previous studies have run aground.) Even scholars who favored the ACA were largely conflicted about the effects of health insurance, several researchers tell the Daily Briefing.

    But unlike policy scholars, "most people have already made up their minds on the effect of coverage expansion,” Sommers says. And that's especially true in the battle over the Affordable Care Act.

    Supporters of the law have defended its coverage expansion as a necessary move to help the nation's uninsured and subsequently lower health spending. But the ACA's opponents have seized on the Oregon study's unclear results as one reason why Medicaid expansion isn't a worthy investment, especially in the 24 states that are still sitting out.

    Where the states stand on Medicaid expansion

    Could these new findings could help nudge some holdouts toward the Medicaid expansion?

    Sommers and his colleagues are cautious; while understanding that the findings may be used in the political debate, their study doesn't take the Massachusetts findings and project what would happen if every state expanded Medicaid under the ACA. 

    "Nationally, you have to be careful [when trying] to extrapolate from one state," Sommers said, noting the many differences between Massachusetts and other states—everything from the range in residents' financial situations to whether state officials support the idea of coverage expansion.

    At the same time, the improvements that researchers spotted in Massachusetts may be the low bar, given that health coverage was already widespread before 2006. Simply put, there was less opportunity to see mortality rates fall in Massachusetts than in Texas, where more than a quarter of the population is uninsured.

    For a sense of scope, here's one hypothetical: if every state that wasn't expanding Medicaid under the ACA saw a similar improvement as Massachusetts, how many lives would be saved? A back-of-the-envelope calculation, drawing on Kaiser Family Foundation estimates, suggests that more than 5,700 premature deaths would be avoided by the year 2018.

    (Wisconsin is asterisked because the state is expanding coverage up to the poverty level so doesn't have the same gap as other states.)

    Criticism of costs—and a rebuttal

    In a sign that the new study could have serious traction, some opponents of the ACA greeted it with equanimity and didn't really dispute its chief conclusion on outcomes. But a few critics are seizing on a different element of the findings: While coverage expansion may have saved lives in Massachusetts, those lives didn't come cheap.

    "As an economist might put it, this means there are likely to be policies out there that could save a lot more lives than RomneyCare does per dollar spent," the Cato Institute's Michael Cannon writes at Forbes, concluding that each life saved cost at least $4 million in state spending.

    "Or as Sarah Palin might put it," Cannon added, "even if RomneyCare saved as many lives as this study suggests, it still probably deserves to be death-paneled."

    Frakt doesn't agree.

    "I think the debate on 'how much to spend to save a life' is far more reasonable than 'does health insurance improve health,'" the economist posted on Twitter. And the new study helps the industry "move from a debate that's, at best, unclear we should be having to one that we absolutely should," he added.

    Get perspective on health policy

    Looking for more resources on coverage expansion and how it will shape the industry? You've come to the right place.


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