Making Sense of the Oregon Experiment

04 May

Last Thursday, an article by Kate Baicker and colleagues came out in the New England Journal of Medicine. Almost immediately, the article received widespread attention in the media where headlines claimed that giving people Medicaid coverage doesn’t improve their health. This is not exactly what the article said, but most journalists aren’t scientists, so we should cut them a bit of slack. But, before I give you my interpretation of the study’s findings, let me provide you with some background.

The state of Oregon has a waiver to provide Medicaid coverage to a group of low-income adults that would not otherwise be eligible for Medicaid under traditional law. They call this the Oregon Health Plan Standard. The problem is, states are required to balance their budgets annually, and there is more demand for this Medicaid program than there is money in the state budget to meet that demand. So, the state created a waiting list, and in 2008, the state had enough money to expand the Medicaid program slightly. To be fair, they held a lottery among the nearly 90,000 waitlisted individuals, and some 30,000 of them won the right to enroll in Medicaid. The reason that’s important is that the lottery introduces a random selection process that is extremely valuable when conducting research. I’ll spare you the additional details, because if you’re the kind of person who needs to know them, you’ll go read the NEJM article for yourself.

Two years after the lottery, the study authors interviewed both the group that won the lottery and a “control” group that didn’t win the lottery. According to the authors, they asked about “health care, health status, and insurance coverage; an inventory of medications; and performance on anthropometric and blood pressure measurements.” They assessed both depression and self-reported health-related quality of life. The goal, in short, was to see what difference obtaining Medicaid coverage makes compared to being uninsured.

The story making headlines is that people didn’t get healthier by gaining Medicaid coverage. This is because there were no statistically significant improvements in blood pressure, cholesterol levels, or controlled diabetes. Indeed, that is one thing the study found, but that’s not all. They also found that people who gained Medicaid coverage were more likely to have their diabetes diagnosed, which is the first step in getting it treated. Additionally, they found that those with Medicaid coverage were less depressed, reported a better quality of life, used more health care, and were far less likely to encounter financial hardship because of health care.

Since a central component of the Affordable Care Act is the expansion of Medicaid to a population similar to that studied in this Oregon expansion, these findings are being viewed as evidence that expanding Medicaid will just mean more money spent on increased use of health care without anything to show for it. The flaw in that thinking comes from the fact that insurance coverage is a necessary, but not sufficient, cause of improvements in health outcomes. In other words, just giving people Medicaid coverage isn’t going to fix everything. We still need to make sure that they have access to a doctor, have the ability to make and keep their appointments, understand and comply with their doctor’s orders, and help them navigate the complexities of the health care system. We also need to make sure that the treatments they are provided are effective. This is where other components of health reform are poised to play a major role. Accountable care organizations and patient-centered medical homes are designed to focus on integrated, high-quality care that puts the patient first and shifts health care providers’ focus from volume to value. The Patient-Centered Outcomes Research Institute (PCORI), headed by Dr. Joe Selby, is funding comparative effectiveness research that seeks to identify what works and what doesn’t. But this study by Baicker and colleagues provides extremely strong evidence that health insurance insulates people from the financial risk of illness, and that seems to give them peace of mind that makes them report a better quality of life–even if their blood pressure hasn’t yet been lowered.

So, to conclude that Medicaid doesn’t do what it is supposed to isn’t true. It does precisely what it is supposed to. We just have to make sure that all of the other components of a high-performance health care system are in place and doing what they are supposed to. When that happens, the health care outcomes we seek will follow.


Posted by on May 4, 2013 in Uncategorized


4 responses to “Making Sense of the Oregon Experiment

  1. Shirie Leng, MD

    May 6, 2013 at 1:34 pm

    Brad – Love your blog. One thing that bothers me about this Oregon thing is that having coverage equates to using more health care, but not necessarily to greater actual health. It sort of sounds like EVERYONE has some sort of diagnosis, and they’d find out about it if only they could get to a doctor. Coverage is important for catastrophic event reasons, but we really should be talking about people needing LESS care, not more.

    • Brad Wright

      May 6, 2013 at 2:09 pm

      I see your point, although as I say, the insurance is doing what insurance is supposed to do. These arguments can cut both ways, because more preventive care would help people be healthier, but because of that, they’ll live longer and over the course of their lifetime they may actually use more care and raise health care expenditures. It is a morbid joke, but one of the best ways to “bend the cost curve” is for the government to hand out free cigarettes.

  2. Bob

    May 20, 2013 at 1:10 pm

    In a few months, OR and half the other states, won’t have to hold a lottery for low income adults which will increase from 90,000, as 130% of poverty will increase that number along with a much larger number to the entitlement and money won’t be an issue for them.

    I don’t see how that increases the number of providers expected to provide services or increase the number or percentages of “new patients” who follow the providers instructions, or have time to carry out the processes to arrange visits. Now as then, I don’t see how the ER doesn’t continue to be the “doctors office” which will increase as everyone will have insurance. Every time in history where insurance availability increased, demand increased above that availability. Adding many more patients at the lowest rates on the market, doesn’t make me see anything other than physicians most make a business decision on how to remain in business that increasing the number of low or no profits doesn’t fit.

    How adding more people and to require they be provided care seems impossible to me, unless the providers are somehow required to take vast numbers of non-profitable clients and to have their own lottery like Or did, and not caring for any of the lottery losers, and having the non-approving half of the states federal taxpayers fund the effort.

    As long as a constant stream of money is provided, any enterprise can continue; but that doesn’t provided any increased services, especially those that are non-profitable from non-existent providers who can’t afford more or anymore non-profit customers or fund enlarging facilities.

    Nationally, most states don’t cover single low income adults so there is no reason to believe they are not a huge number with no idea if they are similar to those in OR. To base considerations if quality on a small segment at this late date is meaningless as it has no relationship to what will happen in just 7 months and how it will affect all providers, recipients and taxpayers.

    I don’t see value of to recipients, providers or taxpayers and since providers can’t increase for a decade, and providers have reverse incentives; I can’t see any successful improvement in results.

  3. Maggie Mahar

    May 20, 2013 at 6:10 pm

    Under the Affordable Care Act the capacity of Federally Qualified Community Clinics increases by 50%.\
    They already care for many Medicaid patients, providiing the continuous care that ERs can’t provide.
    Staff includes nurse-practiioners and physicians assistants as well as doctors. Research shows that they can provide excellent primary care as well as pre-natal care and maternity care (nurse-midwives). Under the ACA scholarships and loans for NPs are increasing rapidly. In addition the National Physicians Service Corp is expanding. These are doctors who receive scholarships to pay for med school in exchange for spending a certain amount of time in geograpic areas where other doctors don’t want ot practice. These are the “Doctors Who Will Go Where No One Else Will Go.” They don’t turn down Medicaid patients. History shows that often these are doctors who came from low-income families themselves and are returning to areas they know (poor rural as well as inner city.) They tend to put down roots and stay. This is all about familiy ties and understanding the community they are serving.
    Many med schools are now looking for more applicants–both low-income white applicants and minority applicants– who are likely to want to practice in underserved areas.

    In addition under the ACA we will see more tele-medicine and e-medicine. This allows doctors and nurse-practioners to care for more patients (filling prescirptions in response to phone calls and email requests
    sending out reminders etc.) without actually “seeing” the patients. Morever more and more doctors are leaving solo practices or small practices to join large organizations. This means that they don’t have to spend time running a business–hiring receptionists and nurses dealing with insurers etc. When it comes to investing in IT they enjoy the economies of scale of a large organization. This in turn means that they earn less than our high-paid solo practioners and take home about the same amount.

    Finally on Medicaid– much reserach shows that over time Medicaid does improve health. (The people in Oregon were on Medicaid for just two years.) The fact that depression fell sharply is extremely important. This means that they will be more likely to try to take of themselves. Depression kills. Finallly as Brad suggests under the ACA a “team approach” to medicine, combined with tele-medicine, e-medicine, accountable care organiztions and medical homes wiill mean more evidence-based medicine, and more help for patients–making sure that they understand their meds, and theat they understand how they can help manage their chronic diseases.


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