A couple more thoughts on Oregon

Aaron Carroll (writing for the Incidental Economist) points out one interesting result of the new study:

Not too long ago, ACA opponents were claiming that Medicaid was bad for health. Some even claimed it killed people. So I was eager to see if an RCT would find that. The initial results were positive and statistically significant.

All by itself this finding is a worthwhile addition to the discussion; the meme that Medicaid coverage could lead to worse health outcomes was always a bit tricky to understand.  Trying to illicit a causal mechanism where Medicaid was worse for health but private insurance/Medicare were not that led naturally to the policy of "end Medicaid" was always a bit dicey.  If it was malice on the part of medical doctors due to low reimbursement rates then that rather changes the discussion in important ways. 

So I think we should take this argument by Megan McArdle with a great deal of care:

And yet, we did find a significant improvement in catastrophic medical bills, which coincidentally also affect about 5% of the control group.  Yet the folks saying Oregon's sample of diabetics is too small to tell us anything do not think it is too small to tell us anything about catastrophic medical bills.

I think that there are two points here.  One, the point estimates of the changes for chronic medical conditions are well within the levels of clinical significance.  So it is odd to suddenly interpret the data like an extreme frequentist and claim that the only interpretation is "no effect". 

But the other piece that is more important is that this is actually a good result.  If we take Megan's 5% rate, that would mean that 5% of poor Americans have a catastrophic medical bill within a two year period.  How can trying to solve that problem not be a major priority?  Isn't this great evidence that (given how expensive medicine has gotten) that this was a massively successful intervention?

I'd have more sympathy for the situation if we were making hard decisions to bring down costs.  But that isn't a major priority right now.  Medicaid is a very cost effective way to deliver care in a country where care is very pricey.  Why isn't this a major and positive result? 

MedicAid

Paul Krugman discusses the success story of MedicAid:

So Medicaid does a vast amount of good. But at what cost? There’s a widespread perception, gleefully fed by right-wing politicians and propagandists, that Medicaid has “runaway” costs. But the truth is just the opposite. While costs grew rapidly in 2009-10, as a depressed economy made more Americans eligible for the program, the longer-term reality is that Medicaid is significantly better at controlling costs than the rest of our health care system.

How much better? According to the best available estimates, the average cost of health care for adult Medicaid recipients is about 20 percent less than it would be if they had private insurance. The gap for children is even larger.

And the gap has been widening over time: Medicaid costs have consistently risen a bit less rapidly than Medicare costs, and much less rapidly than premiums on private insurance.

How does Medicaid achieve these lower costs? Partly by having much lower administrative costs than private insurers. It’s always worth remembering that when it comes to health care, it’s the private sector, not government programs, that suffers from stifling, costly bureaucracy.

Also, Medicaid is much more effective at bargaining with the medical-industrial complex.
 

I often wonder if the hatred towards programs like MedicAid and Social Security is that they exist as counter-examples to current ideology that the free market is always the best solution.  If so, I think that would be a massive mistake.  The traditional of American Pragmatism has been to do what works regardless of the source and that has been a huge relative advantage.

If anything, we should be expanding MedicAid, not shrinking it. 

MedicAid

MedicAid is extremely cost-effective (at least by the standards of US medicine) and protects some of the most vulnerable citizens of the republic. Aaron Caroll goes into just how difficult it would be to make further cuts in MedicAid. But I wonder if the real direction of the debate shouldn't be about expanding coverage for more citizens. After all, the low rate of reimbursements mean that getting treatment under the program will be difficult. This means that people will seek better forms of coverage if they have any options at all. Would it really be terrible to have a public/private hybrid system? Needless to say, I find the idea of MedicAid cuts to be pushing the discussion in the wrong direction.

The biggest burdens go on the smallest shoulders

In today's New York Times, Paul Krugman reminds us just how hypocritical all the talk we hear about "putting children first" really is:

And in low-tax, low-spending Texas, the kids are not all right. The high school graduation rate, at just 61.3 percent, puts Texas 43rd out of 50 in state rankings. Nationally, the state ranks fifth in child poverty; it leads in the percentage of children without health insurance. And only 78 percent of Texas children are in excellent or very good health, significantly below the national average.

But wait — how can graduation rates be so low when Texas had that education miracle back when former President Bush was governor? Well, a couple of years into his presidency the truth about that miracle came out: Texas school administrators achieved low reported dropout rates the old-fashioned way — they, ahem, got the numbers wrong.

It’s not a pretty picture; compassion aside, you have to wonder — and many business people in Texas do — how the state can prosper in the long run with a future work force blighted by childhood poverty, poor health and lack of education.

But things are about to get much worse.

A few months ago another Texas miracle went the way of that education miracle of the 1990s. For months, Gov. Rick Perry had boasted that his “tough conservative decisions” had kept the budget in surplus while allowing the state to weather the recession unscathed. But after Mr. Perry’s re-election, reality intruded — funny how that happens — and the state is now scrambling to close a huge budget gap. (By the way, given the current efforts to blame public-sector unions for state fiscal problems, it’s worth noting that the mess in Texas was achieved with an overwhelmingly nonunion work force.)

So how will that gap be closed? Given the already dire condition of Texas children, you might have expected the state’s leaders to focus the pain elsewhere. In particular, you might have expected high-income Texans, who pay much less in state and local taxes than the national average, to be asked to bear at least some of the burden.

But you’d be wrong. Tax increases have been ruled out of consideration; the gap will be closed solely through spending cuts. Medicaid, a program that is crucial to many of the state’s children, will take the biggest hit, with the Legislature proposing a funding cut of no less than 29 percent, including a reduction in the state’s already low payments to providers — raising fears that doctors will start refusing to see Medicaid patients. And education will also face steep cuts, with school administrators talking about as many as 100,000 layoffs.