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Health Care
A Question for Medicaid Deniers
A lot of people are writing about the Oregon Health Insurance Experiment results, released yesterday, which found zero evidence that expanding Medicaid to the most vulnerable people targeted by ObamaCare’s Medicaid expansion improves their physical health. Here’s my take on the study and its implications. Megan McArdle, Shikha Dalmia, Avik Roy, and Peter Suderman are making solid contributions to the debate. Zeke Emanuel gets points for making an admission against interest (“It’s disappointing”). Points also to Jennifer Rubin for her take on what the OHIE says about ObamaCare’s Medicaid expansion: “If there had been a giant trial of a heart medication with lousy results we wouldn’t proceed in mass-marketing the drug; we might even take it off the shelves.” Not a bad idea. Ezra Klein and Evan Soltas call for more such experiments. Yes! Let’s have more randomized, controlled trials of the effects of Medicaid, on pre-ObamaCare populations, in big states like California, New York, Texas, Florida, and Illinois, where we can harnass even more statistical power. The only unethical thing would be to keep spending trillions on this program without knowing whether it’s even effective (much less cost-effective).
Others are making less-solid contributions. Here’s a question for them.
Since the OHIE shows that Medicaid makes no difference in the diagnosis or use of medication to treat high blood pressure or high cholesterol, and has no effect on blood-sugar levels despite increasing diabetes diagnoses and medication use, would you support eliminating Medicaid coverage for these screenings and medications?
If not, why not?
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Oregon Study Throws a Stop Sign in Front of ObamaCare’s Medicaid Expansion
Today, the nation’s top health economists released a study that throws a huge “STOP” sign in front of ObamaCare’s Medicaid expansion.
The Oregon Health Insurance Experiment, or OHIE, may be the most important study ever conducted on health insurance. Oregon officials randomly assigned thousands of low-income Medicaid applicants — basically, the most vulnerable portion of the group that would receive coverage under ObamaCare’s Medicaid expansion — either to receive Medicaid coverage, or nothing. Health economists then compared the people who got Medicaid to the people who didn’t. The OHIE is the only randomized, controlled study ever conducted on the effects of having health insurance versus no health insurance. Randomized, controlled studies are the gold standard of such research.
Consistent with lackluster results from the first year, the OHIE’s second-year results found no evidence that Medicaid improves the physical health of enrollees. There were some modest improvements in depression and financial strain–but it is likely those gains could be achieved at a much lower cost than through an extremely expensive program like Medicaid. Here are the study’s results and conclusions:
We found no significant effect of Medicaid coverage on the prevalence or diagnosis of hypertension or high cholesterol levels or on the use of medication for these conditions. Medicaid coverage significantly increased the probability of a diagnosis of diabetes and the use of diabetes medication, but we observed no significant effect on average glycated hemoglobin levels or on the percentage of participants with levels of 6.5% or higher. Medicaid coverage decreased the probability of a positive screening for depression [by 30 percent], increased the use of many preventive services, and nearly eliminated catastrophic out-of-pocket medical expenditures…
This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.
As one of the study’s authors explained to me, it did not find any effect on mortality because the sample size is too small. Mortality rates among the targeted population – able-bodied adults 19–64 below 100 percent of poverty who aren’t already eligible for government health insurance programs – are already very low. So even if expanding Medicaid reduces mortality among this group, and there is ample room for doubt, the effect would be so small that this study would be unable to detect it. That too is reason not to implement the Medicaid expansion. This is not a population that is going to start dying in droves if states decline to participate.
There is no way to spin these results as anything but a rebuke to those who are pushing states to expand Medicaid. The Obama administration has been trying to convince states to throw more than a trillion additional taxpayer dollars at Medicaid by participating in the expansion, when the best-designed research available cannot find any evidence that it improves the physical health of enrollees. The OHIE even studied the most vulnerable part of the Medicaid-expansion population — those below 100 percent of the federal poverty level — yet still found no improvements in physical health.
If Medicaid partisans are still determined to do something, the only responsible route is to launch similar experiments in other states, with an even larger sample size, to determine if there is anything the OHIE might have missed. Or they could design smaller, lower-cost, more targeted efforts to reduce depression and financial strain among the poor. (I propose deregulating health care.) This study shows there is absolutely no warrant to expand Medicaid at all.
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More Questions for Secretary Sebelius
Given the growing concern even among Democrats that ObamaCare will result in a “huge train wreck” later this year, I have a few questions for Health and Human Services Secretary Kathleen Sebelius to add to my previous list:
- What happens if a federal court (say, the Eastern District of Oklahoma) issues an injunction barring HHS from making “advance payments of tax credits” in the 33 states with federal Exchanges?
- Has HHS done any planning for that contingency? If so, what are those contingency plans?
- If HHS has not, why not? Given that the Congressional Research Service and Harvard Law Review both say there’s a credible case that the PPACA forbids tax credits in the 33 states with federal Exchanges, how could HHS not have a contingency plan ready?
For more on how HHS is violating federal law by planning to issue advance payments of tax credits through federal Exchanges, read my Cato white paper, “50 Vetoes: How States Can Stop the Obama Health Care Law,” and my Health Matrix article (with Jonathan Adler), “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.”
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‘Crony Capitalism’ Is Not Capitalism
David Brooks has a piece in the New York Times this morning that’s worth reading, “Health Chaos Ahead,” even if it misses a crucial aspect of its subject. Obamacare is off to a rough start, he argues, and it’s only going to get worse. He says he’s talked to a bipartisan group of health care experts, and even some of the law’s supporters “think the whole situation is a complete disaster”—many predicting that it will collapse. Yet “a clear majority,” he adds, including some of the law’s opponents, believe that after a few years of messiness we’ll all settle down to a new normal.
That’s hard to believe, given the “cascades” of problems Brooks goes on to discuss: structural, technical, cost, adverse selection, and provider concentration cascades. That last one is especially noteworthy because, as Brooks says, “the law further incentivizes a trend under way: the consolidation of hospitals, doctors’ practices and other providers.”
That it does. So why does Brooks himself seem to believe that the system will survive? It’s because, even if the law’s unpopularity costs President Obama and the Democrats control of the Senate in 2014, the giant insurance companies and health care corporations spawned by Obamacare will come to the fore to defend it. “Having spent billions of dollars adapting to the new system, they are not going to want to see it repealed or replaced.”
He’s doubtless right about that, but it’s not simply because they want to preserve their “sunk costs” in the new system that these “rent seekers,” as economists call them, are and will continue to be the system’s biggest defenders. These are the same institutions, after all, that were onboard with Obamacare from the start. And they were onboard because, working hand-in-hand with government, they sought to gain advantages over smaller competitors that invariably find it difficult and often impossible to compete in so highly regulated a market as we have here.
Call it “crony capitalism,” yet it’s not capitalism at all. Labeled most charitably, it’s cartelism. But the root of the problem is not with the corporate importunings of Congress. It’s with congressional acquiescence. They’re the people who take an oath to uphold our Constitution for limited government. I’ve always thought that the snake, in the Garden of Eden, got a bum rap. Yes, he was tempting Eve, but she could have just said “no.” Maybe the 114th Congress will have enough members, viewing the health care disaster unfolding before them, who will just say “no.” Then we might start returning to real capitalism.
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‘Why Indiana Shouldn’t Fall for Obamacare’s Medicaid Expansion’
My latest oped, in the Indy Star:
Meanwhile, many [Medicaid] enrollees can’t even find a doctor. One-third of primary care physicians won’t take new Medicaid patients. Only 20 percent of dentists accept Medicaid. In 2007, 12-year-old Deamonte Driver died — yes, died — because his mother couldn’t find one of those dentists.
For more on why states should reject ObamaCare’s Medicaid expansion, read my latest Cato white paper, “50 Vetoes: How States Can Stop the Obama Health Law.”
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Scapegoating ObamaCare
Here’s how Ezra Klein spins Sen. Max Baucus’ (D‑MT) preditions of an ObamaCare “train wreck”:
The GOP can try and keep the implementation from being done effectively, in part by refusing to authorize the needed funds. Then they can capitalize on the problems they create to weaken the law, or at least weaken Democrats up for reelection in 2014.
In other words, step one: Create problems for Obamacare. Step two: Blame Obamacare for the problems. Step 3: Political profit!
It never ceases to amaze me how people who want government to plan our lives are horrified when government then interferes with their plans. Here’s one way to summarize Klein’s attempt to blame ObamaCare’s opponents for ObamaCare’s failures:
Step one: Pass a law the public opposes.
Step two: Act surprised when the public continues to oppose it.
Step three: Blame the public for the law’s failures.
Or:
Step one: Enact an immense law requiring lots of implementation funding.
Step two: Don’t include any implementation funding.
Step three: Blame opponents for not funding the implementation.
Ooh, this is fun:
Step one: Give government new powers.
Step two: Express frustration when those powers fall into the hands of your political opponents.
Step three: Put your political opponents in camps.
I wonder if Mike Pompeo will pen a letter to Klein, too.