Results for “medicaid” 231 found
How much did pre-ACA Medicaid expansions matter?
This paper examines the impact of Medicaid expansions to parents and childless adults on adult mortality. Specifically, we evaluate the long-run effects of eight state Medicaid expansions from 1994 through 2005 on all-cause, healthcare-amenable, non-healthcare-amenable, and HIV-related mortality rates using state-level data. We utilize the synthetic control method to estimate effects for each treated state separately and the generalized synthetic control method to estimate average effects across all treated states. Using a 5% significance level, we find no evidence that Medicaid expansions affect any of the outcomes in any of the treated states or all of them combined. Moreover, there is no clear pattern in the signs of the estimated treatment effects. These findings imply that evidence that pre-ACA Medicaid expansions to adults saved lives is not as clear as previously suggested.
That is a new NBER working paper from Charles J. Courtemanche, Jordan W. Jones, Antonios M. Koumpias, and Daniela Zapata.
Here are some relevant pictures. Now, would you expect subsequent Medicaid expansions to have higher, lower, or the same marginal value?
Medicaid coverage doesn’t seem to help for diabetes and asthma
…we use Oregon’s 2008 Medicaid lottery to assess the management of diabetes and asthma, as well as several markers of physical health. This analysis complements several prior studies by introducing new data elements and by analyzing chronically ill subpopulations. While we had previously found that having insurance increases the diagnosis and use of medication for diabetes, we show here that it does not significantly increase the likelihood of diabetic patients receiving recommended care such as eye exams and regular blood sugar monitoring, nor does it improve the management of patients with asthma. We also find no effect on measures of physical health including pulse, obesity, or blood markers of chronic inflammation. Effects of Medicaid on health care utilization appear similar for those with and without pre-lottery diagnoses of chronic physical health conditions. Thus, while Medicaid is an important determinant of access to care overall, it does not appear that Medicaid alone has detectable effects on the management of several chronic physical health conditions, at least over the first two years in this setting. However, sample limitations highlight the value of additional research.
That is from a new NBER working paper by Heidi Allen and Katherine Baicker. To be clear, my intuition here is to blame “medicine,” and also the patients, not Medicaid per se.
Medicaid, asthma, and ADHD caseloads
There is a new NBER working paper on these topics, by Anna Chorniy, Janet Currie, and Lyudmyla Sonchak, here is the abstract:
In the U.S., nearly 11% of school-age children have been diagnosed with ADHD, and approximately 10% of children suffer from asthma. In the last decade, the number of children diagnosed with these conditions has inexplicably been on the rise. This paper proposes a novel explanation of this trend. First, the increase is concentrated in the Medicaid caseload nationwide. Second, nearly 80% of states transitioned their Medicaid programs from fee-for-service (FFS) reimbursement to managed care (MMC) by 2016. Using Medicaid claims from South Carolina, we show that this change contributed to the increase in asthma and ADHD caseloads. Empirically, we rely on exogenous variation in MMC enrollment due a change in the “default” Medicaid plan from FFS or MMC, and an increase in the availability of MMC. We find that the transition from FFS to MMC explains most of the rise in the number of Medicaid children being treated for ADHD and asthma. These results can be explained by the incentives created by the risk adjustment and quality control systems in MMC.
The economics of medical diagnoses remain a drastically understudied area.
Medicaid Isn’t Worth Its Cost
Medicaid isn’t worth its cost–that’s not my evaluation that’s what people who use the program think, at least as far as we can tell from their actions. Joshua D. Gottlieb and Mark Shepard review the evidence at Econofact, which aims to be a dispassionate and non-partisan review of the evidence on a variety of issues. We have also covered these issues before but seeing it all together is valuable.
The cost is large:
The Medicaid program cost about $532 billion in 2015 to cover 74 million people, or almost one in four Americans. The average full-benefit enrollee cost about $6,400 per year to cover in 2014.
People with access to the program use a lot more healthcare than other similar people
The Oregon Experiment found that gaining Medicaid uniformly increased health care use: including hospitalizations (by 30 percent), emergency room use (by 40 percent), physician office visits (by 50 percent), and prescription drugs (by 15 percent). This evidence stands in contrast to the conventional wisdom that providing health insurance could reduce costs by eliminating ER visits. Of course, understanding whether this additional care is worth it requires a comparison of these real costs to the benefits provided.
The health benefits appear to be real but modest:
The evidence is mixed on whether having Medicaid improves beneficiaries’ health. The Oregon Experiment did not find statistically significant evidence of improvements in physical health measures, such as blood pressure and blood sugar after two years of coverage. But it did find large improvements in mental health and self-reported health. Other studies examining the introduction of Medicaid or its expansion over time have found that Medicaid reduces mortality (of infants during the expansion of Medicaid eligibility for low-income children between 1984-1992; of adults during the expansion of Medicaid coverage for childless adults in Arizona, Maine and New York between 2000-2005; of teenagers who benefited from expansions of Medicaid to children during the early 1980s; and of infants and children in the 1960s and 1970s following the introduction of Medicaid) and improves health later in life (for instance among teenagers who benefited from the expansion of coverage as children). But these studies lack the gold-standard randomized design of the Oregon Experiment so should be interpreted with greater caution.
Health benefits may not be the most important benefits:
One important role for Medicaid is to provide risk protection, shielding enrollees from the financial impact of particularly adverse health events, which is the most fundamental role of an insurance product. Researchers seem to agree that access to Medicaid does improve financial security.
So how does one evaluate the tradeoffs? One way is to look at how users value the program.
Recent evidence indicates that beneficiaries value Medicaid at less than its full cost. One source of evidence comes from Massachusetts’ low-income health insurance exchange, where researchers could observe how much charging higher premiums for Medicaid-like coverage led enrollees to drop out: at least 70 percent of enrollees valued insurance at less than their own cost of coverage. A second source of evidence used economic models to quantify how much beneficiaries valued the benefits of Medicaid in the Oregon Experiment. In this case, the researchers found that beneficiaries valued Medicaid at about one-fifth of its cost.
Benefits are valued at only one-fifth the cost! Why so low?
The literature suggests two explanations. First, Medicaid provides less complete choice of doctors and hospitals than other insurance, partly because of its low reimbursement rates (see this article for instance). Second, many of the benefits of Medicaid go to medical providers who would otherwise provide uncompensated or unpaid care to the same people.
The authors don’t mention this but if users don’t value the program highly because they would have gotten similar care for free in some other way, then the cost of Medicaid isn’t as high as it appears, because much of it is a transfer from taxpayers to medical providers or others who might otherwise foot the bill. Nevertheless we would probably design Medicaid very differently if we thought about it as (another) subsidy to medical providers rather than as a subsidy to the poor and sick.
It doesn’t follow from anything that has been said that Medicaid should be eliminated or even cut back (let alone that current efforts are the best way to do this). Nevertheless, if I told you that Program X costs $5 for every $1 in value transferred to recipients you would probably agree that Program X was in need of reform.
Addendum: Aaron Carroll and Austin Frakt offer a more optimistic review of the health evidence.
Did the Medicaid expansion limit labor force participation?
I study the effect that expanding Medicaid eligibility has on labor force participation of childless adults. The Affordable Care Act provided federal funding for states to expand public health insurance to populations that had never before been eligible for the benefit on a large scale, among those are adults without dependent children. A 2012 Supreme Court decision allowed states to choose whether or not they wanted to accept federal funds to expand Medicaid eligibility, resulting in a situation where roughly half of the population resided in states that had expanded Medicaid eligibility in 2014 and half did not. I exploit this variation by conducting a series of difference-in-differences and triple differences analyses both at a local level within one labor market, and nationwide to determine the relationship between Medicaid expansion and labor force participation. I find a significant negative relationship between Medicaid expansion and labor force participation, in which expanding Medicaid is associated with 1.5 to 3 percentage point drop in labor force participation.
That is from a Georgetown thesis by Tomas Wind, via Ben Southwood. Given the possibility of paternalistic judgments in health care policy, the simplest question here is whether this class of individuals is better off as a whole, as a result of some of them choosing this trade-off. Work is good for most people, and it is even better for their future selves, and their future children too.
Interpreting the results of the Oregon Medicaid experiment
There is a new and probably very important paper by Amy Finkelstein, Nathaniel Hendren, and Erzo F.P. Luttmer:
We develop and implement a set of frameworks for valuing Medicaid and apply them to welfare analysis of the Oregon Health Insurance Experiment, a Medicaid expansion that occurred via random assignment. Our baseline estimates of the welfare bene fit to recipients from Medicaid per dollar of government spending range from about $0.2 to $0.4, depending on the framework, with a relatively robust lower bound of about $0.15. At least two- fifths – and as much as four- fifths – of the value of Medicaid comes from a transfer component, as opposed to its ability to move resources across states of the world. In addition, we estimate that Medicaid generates a substantial transfer to non-recipients of about $0.6 per dollar of government spending.
An implication of this is that the poor would be better off getting direct cash transfers: “Our welfare estimates suggest that if (counterfactually) Medicaid recipients had to pay the government’s cost of their Medicaid, they would not be willing to do so.”
And perhaps this sentence could use the “rooftops treatment”:
It is a striking finding that Medicaid transfers to non-recipients are large relative to the benefits to recipients; depending on which welfare approach is used, transfers to non-recipients are between one-and-a-half and three times the size of benefits to recipients.
Or this:
Across a variety of alternative specifications, we consistently find that Medicaid’s value to recipients is lower than the government’s costs of the program, and usually substantially below. This stands in contrast to the current approach used by the Congressional Budget Office to value Medicaid at its cost. It is, however, not inconsistent with the few other attempts we know of to formally estimate a value for Medicaid; these are based on using choices to reveal ex-ante willingness to pay, and tend to fi nd estimates (albeit for different populations) in the range of 0.3 to 0.5.
Is the Medicaid access crunch about to explode?
The impact will vary by state, but a study by the Urban Institute, a nonpartisan research organization, estimates that doctors who have been receiving the enhanced payments will see their fees for primary care cut by 43 percent, on average.
Stephen Zuckerman, a health economist at the Urban Institute and co-author of the report, said Medicaid payments for primary care services could drop by 50 percent or more in California, Florida, New York and Pennsylvania, among other states.
That is from Steven Lee Myers and Jo Becker, there is more here.
Finding good Medicaid treatment remains difficult
Large numbers of doctors who are listed as serving Medicaid patients are not available to treat them, federal investigators said in a new report.
“Half of providers could not offer appointments to enrollees,” the investigators said in the report, which will be issued on Tuesday.
Many of the doctors were not accepting new Medicaid patients or could not be found at their last known addresses, according to the report from the inspector general of the Department of Health and Human Services. The study raises questions about access to care for people gaining Medicaid coverage under the Affordable Care Act.
That is from Robert Pear, there is more here. And about one-quarter of actual providers had wait times of over a month. Once again, it is the supply-side problems in American medicine which are paramount.
A libertarian case for expanding Medicaid
Currently health care is very expensive in the United States, especially if you have to buy hospital care without formal insurance. Under ideal institutions, it would be much cheaper, maybe a third of the current price or lower yet (not for everything, though). For instance in Singapore health care expenditures are about four percent of gdp. A libertarian may think that laissez-faire or near laissez-faire is the way to go, while others might favor single payer with price controls, and so on. In any case, in the meantime we are stuck with expensive health care, and for reasons related to bad and coercive government policy.
Now, would a libertarian think that we should cut health care services in prisons, simply because tax dollars are in play? No, the prisoners — many of whom are morally innocent — have nowhere else to go for treatment. When it comes to health care, many potential Medicaid recipients are in essence prisoners, locked into a policy-deficient environment and so they cannot buy quality care at affordable prices. So if we favor health care expenditures for prisoners we might also favor Medicaid expansions.
That said, expanding the current version of Medicaid is unlikely to be a first-best solution, no matter what your broader political stance.
Addendum: Jacob Levy offers comment.
The nature of the Medicaid cost problem
Harold Pollack writes:
The bottom 72 percent of Illinois Medicaid recipients account for 10 percent of total program spending. Average annual expenditures in this group were about $564, virtually invisible on the chart. We can’t save much money through any incentive system aimed at the typical Medicaid recipient. We spend too little on the bottom 80 percent to get much back from that. We probably spend too little on most of these people, anyway. For the bulk of Medicaid beneficiaries, cost control is less important than improved prevention, health maintenance and access to basic medical and dental services.
The real financial action unfolds on the right side of the graph, where expenditures are concentrated within a small and incredibly complicated patient group. The top 3.2 percent of recipients account for half of total Medicaid spending, with average expenditures exceeding $30,000 annually.
Many of these men and women face life-ending or life-threatening illnesses, as well as cognitive or psychiatric limitations. These patients cannot cover co-payments or assume financial risk. In theory, one might impose patient cost-sharing with some complicated risk-adjustment system. In practice, that is far beyond current technologies and administrative capabilities. Even if such a system were available, we couldn’t push the burden of medical case management onto these patients or their families.
Very much worth a ponder, and there is more in the post.
Should states jump on the Medicaid expansion bandwagon?
Carter C. Price and Christine Eibner have a new study in Health Affairs suggesting a definite “yes,” and I have seen this piece endorsed numerous times in the blogosphere and on Twitter. I do understand that part of their argument is a normative one, given the desire to expand insurance coverage for the currently uninsured. But they and their endorsers also seem to be making a state-level financial prudence argument, as if there were no possible reason for a state not to expand participation behind sheer ideological stubbornness. On that matter I don’t think they have pondered the problem deeply enough and they fail an intellectual Turing test.
Let’s start with a simple observation, namely that a Republican may win the next Presidential election. There is also quite a good chance that such a victory would be accompanied by a Republican Senate (and House), given the distribution of vulnerable seats. That means a very real chance that the federal government will scale back its commitment to Medicaid expansion, for better or worse. States don’t want to be left holding the bag, and governors know it is hard to take back benefits once granted.
I often interpret the Republicans as operating in a “they don’t really mean what they say” mode, but on Medicaid I think they basically do mean it and we already can see some of the demonstrated preference evidence. Furthermore a new Republican President would face very real pressure to “repeal Obamacare,” yet we all know that the “three-legged stool” centered around the mandate is hard to undo selectively. That ups the chance Medicaid will be the target and much of the rest will be relabeled (“repealed,” in the press release) but in some manner kept in place in its essentials.
Another possibility is that a Republican administration would somehow restructure the deal to, in some way, favor the holdout red states, relative to the deal already on the table. (Why not reward your supporters?) That increases the prospective return to being a holdout red state.
On top of all this, there is option value. The chance to jump on the Medicaid expansion bandwagon won’t go away tomorrow. Even if the cost-benefit ratio > 1, you still might want to play wait and see. There is even a chance that in the meantime you are somehow offered a better deal yet.
Now if someone wants to argue that, given these considerations, Medicaid expansion still makes financial sense for a state, fine, I would be keen to read such an analysis. But that is not what I am seeing. The Price and Eibner piece doesn’t analyze these considerations or even bring up most of them. Governors are not stupid, or their chiefs of staff are not stupid, and many governors are far less ideological than they let on. They are politicians. And they are politicians who understand that the federal government is not to be trusted and yes if you wish you really can blame that on the Republicans, or indeed on any prospective switch of power. That is why we are not seeing more states do the Medicaid expansion. In the meantime, the debate needs to catch up to the reality.
Jim Manzi on the Oregon Medicaid study
Via Megan, here is an excellent discussion of the study, here is one excerpt:
In summary, based on statistically insignificant effects of coverage from the Oregon Experiment: (1) The effects that are closest to statistical significance are that coverage would increase the rate of smoking and damage the cardiovascular prognosis of sick people; (2) the best estimated net effect on total population cardiovascular health is extraordinarily tiny; (3) this effect would be achieved by making the sick sicker, while very slightly improving the health of already healthy people ; and (4) this effect is almost certainly unattractive on a risk-adjusted basis. This is not a series of effects that makes a very attractive argument for an increase in health from the experiment.
…When interpreting the physical health results of the Oregon Experiment, we either apply a cut-off of 95% significance to identify those effects which will treat as relevant for decision-making, or we do not. If we do apply this cut-off (as the authors did; as is consistent with accepted practice for medical RCTs; and as is what I believe to be a good way to make decisions based on experiments), then we should agree with the authors’ conclusion that the experiment “showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years.” If, on the other hand, we wish to consider non-statistically-significant effects, then we ought to conclude that the net effects were unattractive, mostly because coverage induced smoking, which more than offset the risk-adjusted physical health benefits provided by the incremental utilization of health services.
Do read the whole thing, there are many more points of interest. For instance “Almost half the people offered free health insurance coverage didn’t bother to send back the application to get it.”
A few remarks on the Oregon Medicaid study
There is a simple quotation from Josh Barro, who by the way has supported ACA. Josh wrote:
Despite efforts to spin it to the contrary, this is bad news for advocates of the Medicaid expansion. While Medicaid is clearly good for some things, it was supposed to be good for all of the measures tracked.
Or here is Ray Fisman:
Now that the clinical results have started to come in, it’s time for liberal media types like myself to eat some humble pie. Today’s New England Journal article presents a set of findings showing that Medicaid had no effect on a set of conditions where you would expect proper health management to make a difference. There are effective treatment protocols for hypertension, cholesterol, and diabetes, yet insurance status had no effect on blood pressure, cholesterol levels, or glycated hemoglobin (a measure of diabetic blood sugar control).
Do read the rest of those posts for a more complete picture of the results, but many commentators are overlooking these rather simple upshots.
The key question here is how we should marginally revise our beliefs, or perhaps should have revised them all along (the results of this study are not actually so surprising, given other work on the efficacy of health insurance). For instance should we revise health care policy toward greater emphasis on catastrophic care, or how about toward public health measures, or maybe cash transfers? (I would say all three.) One might even use this study to revise our views on what should be included in the ACA mandate, yet I haven’t heard a peep on that topic. I am instead seeing a lot of efforts to distract our attention toward other questions.
I am sometimes reluctant to speculate about motives, but I believe there is currently a fear of stating the actual truth, given that ACA and the Medicaid expansion are coming under increasing political fire, very often involving mistruths from the Republicans I might add.
You are seeing obfuscations of reality when you encounter two particular responses to the new Medicaid results, which I have been seeing with disturbing frequency. The first is something like “But you still buy health insurance, don’t you?” The second is when the debate is steered into showing that Medicaid does indeed benefit poor people (which is obviously true, and was so before and after this study).
Those are both examples of running away from the idea of thinking at the margin. A better response would run more along the lines of “The Medicaid expansion had been oversold, we now should think more along some other lines for improving our health care system. Let’s admit that we have more of a mess on our hands than we had realized or let on.” You don’t have to deny that Medicaid might help with long-term care problems, for instance, or advocate the abolition of Medicaid. The real results from the new study are most likely about health insurance and health care, not so much about Medicaid per se; see Ezra’s on-target remarks.
Compare what you have seen over the last two days with the writings on the earlier phases of the Oregon study, when it seemed to be yielding a more positive picture of Medicaid. Those earlier writings often were preparing for a coronation of this study (please do read that link) but now we are seeing hand-wringing and all sorts of talk about the study’s limitations.
For varying and useful perspectives, here are Carroll and Frakt and Megan McArdle.
Coming on the heels of the debate over Reinhart and Rogoff, I find this all sad. If there is any cheery lesson it is that, in relative terms, macroeconomics is in better shape than we had thought!
The follow-up study on Medicaid coverage in Oregon
Here is some overview coverage from Annie Lowrey, an important issue of course with some striking results. Here is coverage from Sarah Kliff. Here is commentary from Justin Wolfers, and here. After the R&R saga, I say it’s time for someone to stand up and admit “We have some egg on our face with this one.”
Addendum: Reading more carefully through the quotations from Finkelstein and Holahan in the Lowrey piece, I find it amazing, and I suppose even embarrassing, what those commentators are claiming as a positive result. Of course it is worth comparing the program to simply giving people the cash.
The Medicaid wars continue
Sandra Decker, an economist with the Center for Disease Controls, recently poured over the 2011 National Ambulatory Medical Care Survey, which asks doctors whether they would accept new Medicaid patients.
What she found could spell trouble for the health care law: More than three in ten doctors – 31 percent – said no, they would not.
Her research, published this afternoon in the journal Health Affairs, is the first that has ever given a state-by-state look at doctors’ willingness to accept Medicaid.
The problem, of course, is that higher demand will be pressing against a relatively fixed supply.