The federal government has produced yet another study stating the obvious about health care -- that having insurance coverage is better than not having it. Yet some wonks are hailing this report from the National Bureau of Economic Research (NBER) as "the most important health-care policy experiment since the 1970s."
The study focuses on a 2008 Oregon lottery that offered 90,000 people the opportunity to apply for 10,000 slots in the state's Medicaid program. Economists compared two similar, randomly generated populations: one with access to Medicaid coverage and one without. The researchers concluded that those covered by Medicaid sought more care, had lower out-of-pocket expenses and medical debt, and felt better.
Supporters of ObamaCare have seized on the findings as proof that the law's expansion of Medicaid will do wonders for those who currently lack coverage. But there's reason for skepticism. Patients may seek more care when covered by Medicaid, but the care they receive is typically substandard -- and will only deteriorate further as the program swells.
ObamaCare's proponents have long claimed that expanding Medicaid will actually lower national health costs by compelling the uninsured to seek routine care at the doctor's office rather than in expensive emergency rooms.
Unfortunately, the evidence doesn't support that theory. The NBER study found no difference in ER usage between the patients who won the Oregon Medicaid lottery and those who didn't. It also found nothing to suggest that there was pent-up demand for health care among the uninsured.
Data from Massachusetts -- which significantly expanded Medicaid as part of its 2006 health reform package -- yield a similar conclusion. According to the Beacon Hill Institute, emergency room visits in the Bay State increased 7.2% over the first five years of its new law. As a result, ER-related costs shot up $943 million.
So Medicaid expansion didn't deliver the emergency-room savings it promised. But it did improve people's health, right?
That's not clear either. The NBER study didn't monitor "improvements in actual, physical health" among Oregon's new Medicaid enrollees. Instead, researchers simply found a "general sense of improved well-being" among those they interviewed.
ObamaCare is set to spend more than $700 billion to add 18 million people to Medicaid by 2019, bringing the total covered to about 80 million. That's an awful lot of money to improve Americans' "general sense of well-being."
Other studies have examined the actual health of Medicaid patients -- and the results aren't pretty.
For instance, a 2007 study in the Journal of the American Medical Association found that Medicaid patients received lower-quality care than patients covered by commercial HMOs in all categories but one.
Research published in the Annals of Surgery found that uninsured patients were 25% less likely than Medicaid patients to have an in-hospital death related to a major surgical procedure.
A study from the Journal of the American College of Cardiology found that Medicaid patients were 50% more likely to die after coronary artery bypass surgery than patients with Medicare or private coverage. And Medicaid patients were more than twice as likely to have a subsequent major heart attack than were those without insurance.
These negative outcomes have arisen partly because many doctors -- more than a quarter, in fact -- refuse to see Medicaid patients.
The New England Journal of Medicine recently published a study comparing the ease of getting an appointment with a specialist in Cook County, Illinois, for children with Medicaid versus those with private insurance. They found that two-thirds of the kids with Medicaid couldn't get an appointment; just 11% of privately covered kids were unable to do so. Further, the average wait time for the Medicaid beneficiaries was 22 days longer.
Doctors' unwillingness to accept Medicaid patients shouldn't be surprising, as the program reimburses them at just 72% the rate Medicare pays and 80% of what private insurance does.
Even with ObamaCare set to inflate the Medicaid rolls, reimbursement rates are falling further. When the NBER investigated Oregon's program, the state paid doctors 90% of Medicare rates -- more than most other states. But since then, Oregon, as well as nearly half its peers, has cut payments. More doctors will doubtless leave the program as a result.
This supply problem is one reason the NBER study specifically cautioned against extrapolating its results to model ObamaCare's expansion of Medicaid.
Under ObamaCare, one in four Americans will be covered by Medicaid at a total cost of nearly a trillion dollars. They may receive subpar care -- or may not even be able to get an appointment with a doctor. But as the NBER report shows, at least they'll have a "general sense of improved well-being."
Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute. Her latest book is The Truth About Obamacare (Regnery 2010).Also Read