Misunderstanding Oregon

Much has already been written about the Oregon Medicaid study that just came out in the New England Journal of Medicine. Unfortunately, the vast majority is reflex, rather than reflection.  The study seems to serve as a Rorschach test of sorts, confirming people’s biases about whether Medicaid is “good” or “bad”.

The proponents of Medicaid point to all the ways in which Medicaid seems to help those who were enrolled – and the critics point to all the ways in which it didn’t.  But, if we take a step back to read the study carefully and think about what it teaches us, there is a lot to learn.

Here is a brief, and inadequate, summary (you should really read the study):  In 2008, Oregon used a lottery system to give a set of uninsured people access to Medicaid.  This essentially gave Kate Baicker and her colleagues a natural experiment to study the effects of being on Medicaid.

Those who won the lottery and gained access were compared to a control group who participated in the lottery but weren’t selected.  Opportunities to conduct such an experiment are rare and represent the gold standard for studying the effect of anything (e.g. Medicaid) on anything (like health outcomes).

Two years after enrollment, Baicker and colleagues examined what happened to people who got Medicaid versus those who remained uninsured.  There are six main findings from the study.  Compared to people who did not receive Medicaid coverage:

  1. People with Medicaid used more healthcare services – more doctor visits, more medications and even a few more ER visits and hospitalizations, though these last two were not statistically significant.
  2. People with Medicaid were more likely to get lots of tests – some of them probably good (cholesterol screening, Pap smears, mammograms) and some of them, probably bad (PSA tests).
  3. People with Medicaid, therefore, not surprisingly, spent more money on healthcare overall.
  4. People with Medicaid were less likely to go bankrupt due to healthcare expenditures.
  5. People with Medicaid had less depression and overall, had better health-related quality of life.
  6. People with Medicaid did not have meaningful improvements in their hypertension, cholesterol, diabetes, or other measures of overall health.

It is first worth taking a moment to dispense with those who will try to nitpick the methodology.  Read through the paper carefully and spend time going through the 62 page single-spaced supplementary appendix and you’ll find that this is about as good of a study as will be done on this topic for the next generation.

Kate Baicker, who led the study, is the smartest person I know and whenever I disagree with her, it’s because she’s right and I’m wrong.  These are the gold standard of folks using the gold standard of methodology to answer an incredibly important question: what is the effect of Medicaid on financial, mental, and physical health.  So, let’s get to the lessons.

  1. Insurance works. The goal of my homeowner’s insurance is that if I have a fire, I won’t become bankrupt.  The goal of health insurance should be to ensure that if you get hit by a bus, you won’t go bankrupt.  Medicaid, as insurance, worked.
  2. Insurance gives you peace of mind. I never lie awake worrying that if I get sick, my family will go bankrupt.  Medicaid may therefore be giving people reassurance, and making them feel better, which may be why there was less depression in the Medicaid group (they certainly weren’t taking more anti-depressants).
  3. Insurance improves access to healthcare services. Although people without health insurance still got healthcare (they were spending $3,257 per year on healthcare, seeing 5.5 doctors a year, getting medications, outpatient surgery, etc.), people on Medicaid got more.

But this was all predictable and none of it should be a surprise.  What has been fundamentally misunderstood is why it didn’t lead to better health.  And that is the biggest lesson from Oregon:

Healthcare isn’t health, and the missing link is Quality.

Let’s unpack this.  To date, the notion for improving health has been simple: if we give people access to health insurance, they will get more care, and therefore will have better health.  Oregon tells us that’s not quite right.

The lesson from Oregon is:  if we give people access to health insurance, they will use more healthcare, and they will feel better for it.  But, their health may not be that much better off.  How could this be?

The explanation is simple.  It’s not about access to healthcare; it’s about access to high quality healthcare.  Americans fail to consistently receive high-quality care and the people on Medicaid in Oregon were no exception.  There is some evidence that providers who disproportionately care for Medicaid patients deliver lower quality care, but the problem is much bigger than Medicaid.

In fact, most Americans get pretty mediocre quality healthcare.  Therefore, not surprisingly, healthcare often fails to improve health.

In the Oregon study, we see that many people, especially in the high risk groups, have poorly controlled blood pressure, diabetes, hypercholesterolemia, and depression.  Yes, Medicaid seemed to help a little, but not enough.  People with Medicaid had, on average, 7.2 office visits over the past 12 months.

That’s more than once every 2 months.  Yet, their blood pressure, cholesterol, and blood sugars barely budged.  This is not an access problem.  This is not about “Medicaid is bad” or “insurance is bad”.  This is about what happened (or did not happen) in those visits – namely, evidence-based care that we know improves health.

Most healthcare policymakers talk about the three legs of the stool of the healthcare system: cost, access, and quality.  The Affordable Care Act makes a big effort to improve access, but does less on cost and little on quality.  That’s unfortunate.

Oregon reminds us that if we want to improve the health of the population, we will have to make real and concerted efforts to ensure that people are receiving high-quality care.  We can’t just improve access and think that our job is done – in fact, its just the beginning.

Ultimately, while many factors affect health (such as education, income, neighborhoods where we live, etc.), healthcare matters too.  And it better – we’re spending $2.8 trillion on it.  Oregon tells us that insurance has its benefits – it gives us peace of mind and improves access to health services like office visits and preventive screening.

But it doesn’t do that much for health, because it’s not about access to healthcare.  It’s about access to high quality healthcare.  Quality is the link between healthcare services and better health outcomes.  And we need to spend more time working on that.

Ashish Jha, MD, MPH is the C. Boyden Gray Associate Professor of Health Policy and Management at the Harvard School of Public Health. He blogs at An Ounce of Evidence.He will serve as a Senior Editor-in-Chief for Healthcare: The Journal of Delivery Science and Innovation. Submission is open now, and the first issue will be released in late spring 2013.

32 replies »

  1. I’m impressed, I have to admit. Rarely do I
    encounter a blog that’s both equally educative and
    entertaining, and without a doubt, you have hit the nail on the
    head. The issue is something which not enough folks are speaking intelligently about.
    I am very happy that I came across this in my hunt for something regarding this.

  2. Hi William,
    I’m not sure what the answer to your question is, BUT, if one wants to make a difference in this world, one must look inside. We continue as a human race to look outside of ourselves for answers. The system was created by humans. What is our need for greed? Is it survival? Is this what we want? I feel the only answer is to gather together with other enlightened beings and other humans that want to base the idea of healthcare on humanity and compassion for the sick. Collaboration will be essential for solutions.

    I also want to address this plan about wellness that corporations are insisting on. Corporations don’t need to know about our health. How dare they! What are their intentions for being provided our health information? As I see it, it is for profiling. One will not be able to get a job if they have health issues. Are we going to stop hiring bright human beings if their BMI is above the “normal” range? Why do they need this kind of data? Why are corporations involved anyway? Oh..it seems like it is in the name of wellness, but when has a corporation ever acted as honorable? If we don’t act in the way they want, we are going to be charged fees or have benefits taken away. What is this kind of thinking?

    It seems sometimes that humans have choices, but sometimes they don’t. But if they look inside and connect with their own bodies, they will start to see that their bodies actually “talk” back to them when they are overweight. Their blood pressure go up, they have constant indigestion etc. Once we teach humans to be in touch with their bodies can we make a change. Pointing an individual back to themselves whether it be health care or anything else, is the answer as I see it. I have learned this to be true in myself.

    Is this answer helpful.

  3. “Less depression” — how much less? Thirty percent (30%) less? Depression is one big deal healthcare problem, a disease that heavily tolls our economy and appears connected to tens of thousands of deaths by suicide. Did the Oregon study indicate significant reductions?

  4. “The odds of being stiffed are much higher than with an insurance company.”

    Legacy, patients PAY the full amount, as with most single providers payment is due at time of service. In the case of hospitals, yes the amount may need to be paid in installments. The “risk” does not get better the higher the bill, it gets worse. Installment payments to hospitals should carry an interest element but not the usual charge master gouge amount, which puts a patient at greater risk of default. In other lending transactions the amount the person pays is a result of their credit history. Of course we know the health care system operates outside normal market influences.

    ” Insurance companies like to pay the least they can.”

    From the continued rise in health care costs to patients it appears insurance takes the least resistive path – raise premiums. When I had BCBS I would consistently get 5% – 10% premium increases annually – COMPOUNDED! I never heard of providers getting a cut in payments, but I did hear of 45% bonus checks to executives.

    5% of a $billion in volume is better than 5% of a $million in volume.

  5. Peter1,

    “They pay in cash which is far more efficient than billing an insurance company”

    Wrong. Unless you collect the entire amount up front (we don’t), you have to collect from the patient. The odds of being stiffed are much higher than with an insurance company.

    “The % of profit for insurance is a direct result of dollar volume and therefore is in their interest to push pricing volume(sic) higher”

    Wrong again. Insurance profits are the difference between what they take in (premiums) and what they pay = claims + overhead. Insurance companies like to pay the least they can.

  6. Mike hits the nail on the head
    Healthcare accounts for about 10% of health
    Looking for insurance to dramatically change health outcomes is therefore both imprudent and likely to dissappoint.

  7. If this were a trial of a new drug it would prove the intervention (Medicaid) was ineffective and its sponsor would be reluctant to market it.
    Future studies should incorporate a third arm..cash for the uninsured and allow them to make health care choices.
    They may then buy health care they need not we think they need and we may have surprising outcomes.

  8. There are two main values to health insurance:

    a. obtain lower prices from insurer’s bargaining power

    b. Not go bankrupt from health care

    These are worthy goals, well worth public involvement………..

    but insurance policies are not the only way to do this.

    We could have sliding-scale subsidized health clinics for the poor.

    And we could have rigid limits on what hospitals charge the uninsured

    This could be done for a fraction of the cost of Medicaid and the ACA subsidies.

    Personally I do not think that an adult’s blood pressure or cholesterol or blood sugar level is a matter of public concern. In a child, yes, so that child gets a fair start on life. But on the whole, adults earn their chronic conditions.

    Bob Hertz, The Health Care Crusade

  9. Politically incorrect?

    I am well read, and generally, when I see the issue of personal responsibility raised, its in response, or in balance to, another piece discussing the opposite.

    A good example is March NEJM on smoking penalties. The point-counterpoint has all the hallmarks of a balanced debate — worthy arguments on both ends. I believe people need to see the sides of both parties as each has merits.

    If junk science was driving the “anti” personal responsibility perspective you would be on solid ground. Not the case, and we have a lot to learn.


  10. Legacyflyer, not a good correlation. The uninsured buy directly from providers not insurance companies. They pay in cash which is far more efficient than billing an insurance company. Providers attempt to charge more to cash payers because they feel they can gouge an unsuspecting patient. I have found I can also negotiate what I pay and come up with close to the insurance reimbursement, in the mean time I have not paid the monthly premium that add to my cost.

    “Insurance companies buy in volume and demand price (and other) concessions.”

    If only would insurance companies would play their role in restraining costs. The % of profit for insurance is a direct result of dollar volume and therefore is in their interest to push pricing volume higher, not restrain it – as we can see.

    What insurance companies also sell is a client list for the provider.

  11. William, as one who also took your route let me say that $200 per month is small piece of mind. But we all know that the $200 quickly balloons to $500 and more per month with little return and a fight for coverage when needed.

    I would recommend you sock that $200 and more into a bank account set aside for health care because there might come a day when a large event will require a lot of money to fix. For me it was needed hip surgery that I was able to get in India with a qualified surgeon in an accredited hospital for 25% of the cost.

  12. From the study:


    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.”

    Couldn’t we say that about any health care plan? It’s our food/exercise culture driving health not our health plan.

  13. If you want to understand better why you (as a non-insured individual) are charged more than someone with insurance, think about the price you would pay for a screwdriver vs. what Walmart pays.

    Insurance companies buy in volume and demand price (and other) concessions.

  14. There ought to be a law against clinics charging on-the-spot-cash customers more (exhorbitantly more, I believe) than what they would accept from an insureer for the same service. Yet being “uninsured” I’m often treated as if I’m somehow criminal.

    Recently, just having started a job that offers insurance (I’ve been self-employed most my life), I discovered that a dentist office I visited quoted a price twice as much as what they eventually charged the insurer. I was not asked to make up any of the difference. Some clinics offer a 5%-20% discount for cash payment. Even with the rare 20% discount, I wonder how much more I am paying than an insurer would for the same service. I end up subsidizing the whole setup, yet am treated as second-class by the women who take appointments and handle payments.

  15. Being quite fit and healthy, at 46 I decided to stop buying health insurance (about 9 years ago) when rising premiums and deductibles made it a bad investment and I hated to support the insurance industry. I decided the nearly $200 a month would be better spent on things like health club membership, fresher and higher quality (organic) food, a good juicer, a nice bike, good hiking shoes (and using them), massage, various skill development and other mental health measures, etc.

    Yearly expenditures average around $600 on physicians, pharmacy, etc. Before accepting a prescription or lab test, I do my research and make my own choices. About once a year I go online and order myself a lab test or two to monitor things like basic bloodwork, STDs panel, blood levels of vitamins, etc.

    Dental has been always much more expensive than all other health costs combined, and I have pretty good teeth. But to keep them that way isn’t cheap. I would have been farther ahead to have bought dental insurance.

  16. Excellent, Janet. The system cannot be fixed. But how can it possibly happen that everyone would become educated to the ideas you express? More than just the healthcare system must collapse.

  17. That’s because it’s become politically incorrect to talk about the contribution that personal choices make to health and health spending. The “wets” in the health policy community think it’s “blaming the victim”, as if illness is a force of nature, like a tornado, that just appears out of the clear blue and devastates the family.

    Medicaid spends almost as much on nursing home care as on hospitals.
    They pay physicians in fun bucks, and “relationship based” physicians that might actually have a prayer of influencing heath behavior 10-20c on the dollar relative to private plans, which is why physicians are abandoning the program.

    Medicaid spending is largely devoted to “sweeping back the tide” of illness, rather than improving peoples’ health. Sadly, a parallel study with Blue Cross or commercial insurance would probably have produced similar findings.

  18. The fact that this piece did not even pass by and wave at individual health behaviors as contributing to the lamented inability to enhance the subjects’ health is telling.

    No one this sharp and well-reasoned could fail to understand this point. Yet, we see no signs that what I choose to put in my body in any way affects my well-being. Are you kidding?

    This is medicine seen through the eyes of the education lobby model, where more money thrown at a problem will solve it until it doesn’t.

    I couldn’t begin to speculate on why something so obvious as personal choices didn’t even receive a passing glance here. All I can say is it irreparably damaged the credibility of everything else said in the piece.

  19. An important issue is the amount of money spent for capital equipment such as EMRs to help manage patients.

    A study should be done of community health centers in New York City which are well capitalized and have all installed high quality eClinicalWorks EMRs. These plans focus on coordinated care (and are part of NYC’s PCIP http://www.nyc.gov/html/doh/html/hcp/pcip.shtml

    I would love to see a study of CHCs Ryan Center (Upper West Side, NYC) and Urban Health Plan (South Bronx — one of the poorest parts of the city) compared with the Oregon patients that received Medicaid. I’m certain that Ryan Center and Urban Health Plan will have better indicators that the new patients receiving Medicaid in Oregon.

  20. Most of what we do, even if it were this elusive “high-quality care”, doesn’t change much re: outcomes. It just medicalizes everyone.

    This is especially true at the margins. (i.e. adding one more med to get the blood pressure “to goal”, putting grandma on the Alzheimer’s pill because “we have to do something”, etc.

  21. David — thank you for writing in. The higher diagnosis of diabetes but no better diabetes control is pretty good evidence that while we may be effective at diagnosing conditions, we are far worse at managing them. Its just more evidence that part of the reason why the Oregon study failed to find a big effect was because the quality of care that these patients received was not very good. Unfortunately, I think the poor quality care is rampant and all of us are subjected to it.

  22. And what are we getting as a society for the $2.8 trillion a year, exactly?
    Protection from the effects of spendng the $2.8 trillion on our household cash flow, a slightly better mood, a bunch of well paying jobs . . . . and what else?
    35% percent more health spending for the covered folks, but no reduction in morbidity or mortality?

    What is the societal ROI on the $2.8 trillion, exactly? Matthew is right on this- it’s about the money.

  23. Very clear and well written, Ashish. I enjoyed meeting and hearing from both you and Kate at Barry Bloom’s Advanced Leadership conference. Keeping poorer people from bankrupting themselves and radically lowering depression is a hello of a good start.

    the part you don’t address and I can’t figure out is the higher diagnoses of diabetes, but no differences that follow.

  24. The Sh** Sandwich Theory of Life. The more bread you got, the less Sh** you gotta eat.

  25. The study repeats what Marmot has shown in Britain that if you want to improve the health of the poor, you need to focus first on getting the poor a job and out of poverty. Dr Roizen of the Clevland Clinic hand others have shown the mechanism and devastating effects of prolonged financal stress on the body.

  26. Sure would like to hear what Joe Flower and JD Kleinke have to say on this.

    Second the sentiment: Great piece, Ashish.

  27. Ashish,

    Great piece – and observation. It’s also one of the (many) reasons I struggle with all the noise around “pricing transparency.” There’s a false sense of hope that “market forces” will magically ensue and pricing will surely plummet. The larger point – which is your conclusion here as well – is that healthcare pricing is a false fabrication and tells us nothing (tangible) about quality.

    When a car manufacturer says the cost of their car is $20k and another manufacturer tells me the cost of their car is $80k – I can make some reasonable assumptions about build quality, comfort, convenience, prestige, design AND budget – but none of those attributes are really applicable to healthcare – nor should they be. The only attribute that really matters in healthcare is quality. Thanks for the focus here on that attribute.

  28. Yes, you are right. Also, healthcare has nothing to do with health, it has to do with money. If the government really wanted us to be healthy then they would stop subsidizing corn and empowering companies like Monsanto that are destroying the planet and killing the bees. Health is directly related to the quality of soil and our soil is becoming acidic. We don’t know all the results of what GMO’s are doing either. We need to be conscious of the way we treat and feed our animals because if we continue to feed them corn we deplete all the omega 3’s out of the food. Now we have developed the franken apple that doesn’t turn brown, but it messes with our RNA. We think these issues are separate, but they are not. We need to let the healthcare system collapse. The foundation is all wrong. If we want to be humane then lets treat each other with respect and have respect for life. There is no polar opposite to life and that is what connects us to all other living forms.

  29. Closely related to what Mike (above) says, we frequently (consistently?) talk about healthcare and health insurance as if they are the same thing. Homeowners insurance means if you have a fire, you don’t go bankrupt. It does not mean your furnace gets serviced (preventative) and it certainly doesn’t mean your house gets painted. That’s the way insurance is supposed to work.

    I think we could get a lot farther in the heathcare discussion if we could separate these concerns.

  30. This misses the obvious–the big factor in improving health is not quality healthcare, it’s not healthcare at all. It’s the habits and environment that lead to poor health. Why would we expect ANY kind of healthcare to change that?