Medicaid: An Expensive Placebo?


Rhode Island’s government so enthusiastically leaped into both the ObamaCare health benefits exchange and its Medicaid expansion that residents may have wondered whether any questions had been asked about the benefits of the new programs, or whether more government expenditure and involvement in our lives are just assumed to be good things.  The RI Center for Freedom & Prosperity offered some objections. (Note: the linked paper is my work.)  But it seemed as if nobody much cared to hear them.

More money spent and more centralized planning are apparently taken to be risk free and positive developments.

Now, even beyond the critiques on cost that the Center offered, it appears questionable whether Medicaid really improves healthcare results in the first place.  Reason‘s Peter Suderman reports:

In its second-year results, the Oregon Health Insurance Experiment, which randomly assigned Medicaid to 10,000 people in Oregon, and compared them with a randomly selected control group, found that those who got Medicaid did not on average have healthier blood pressure, cholesterol levels, or diabetic blood pressure control than those who did not get Medicaid. Those with Medicaid did see some reduction in out of pocket health expenses. They were also less likely to be diagnosed with depression.

The Medicaid recipients also ended up utilizing a lot more health care—care that has to be paid for—than those who didn’t get coverage. But they didn’t use the emergency room any less than the control group.

This result is likely to be even more conspicuous among the Rhode Islanders whom the expansion will now rope into government dependency, because as the government admits, they’re mostly going to be able-bodied young adults.  That is, people who don’t tend to need much healthcare because they’re young and, well, healthy.

Suderman points to an interesting twist to the findings, as well:

… even though it is true that self-reported health status rose amongst the population assigned Medicaid, the bulk of the improvement in self-reporting occurred prior to the provision of any care. Just because the Medicaid recipients said they felt better, in other words, did not necessarily suggest that they were measurably healthier.

Medicaid, arguably, is a very expensive placebo.  People feel better because they have it, but it isn’t really doing much to improve their health.

Why this would be the case is an interesting question.  Regular checkups don’t do much if the patient doesn’t follow the doctor’s advice.  And much of what doctors do, outside of the hospital and the emergency room, is to treat symptoms and screen for signs of more-serious illness.  For most visits, the symptoms will be minor and the more-serious illness non-existant.  That doesn’t mean regular meetings with a doctor aren’t advisable, but those who derive the most value from them will be those already concerned with taking care of themselves.

Of course, there may be longer-term benefits to more use of regular healthcare, and there may be additional benefits that aren’t measured in the study at hand.  But then, the longer-term and more general we’re talking the more questionable it is whether a program like Medicaid is the best, most-efficient approach.

A skeptical eye might bring into view challenges to the notion of whether transforming health insurance into a total health maintenance package — rather than, you know, insurance — is really the appropriate way to organize a healthcare system.  Let alone whether such packages should be a target for redistribution of wealth through the government.

  • Edward Martin

    I like many are blessed to have traveled and stayed at various places mostly in our US of A. I am here to say that we here in the upper New England region have a propensity to expect more from all forms of governments than not and certainly more than probably a majority of states and their citizenry do expect. It is simple and predictable…"Big City Banding" that means the more persons of all diversities can be coralled in as small a geograhical footprint as possible the more socialist and some ways fascist ideas permeate. Obviously that comes into play politically and I do'nt think I have to spell it out. Rhode Island ("My home state)" is a control of City / State politics if there ever was one. I am not getting any further into posting because it is depressing to say the least. You all figure it out and post your comments and maybe I will feel sane for a little longer. but please let's no one talk of 17 percent victory Chaffee. That's the biggest insult since we became a state. He is a walking insult and a cult of loyalists who do it all except for powdered wigs, and whom knows if they wear them in secret !