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Early returns: Oregon's expanded Medicaid didn't improve outcomes

A study containing mixed results of the effects of increased Medicaid enrollment in Oregon offers some caution about expectations for dramatic improvements in the health of millions of individuals from just expanding coverage across the nation in 2014, according to one of the authors of a recent study.

"The study gives policymakers a lot of information about the costs and benefits of expanding Medicaid to low-income adults," said Katherine Baicker, professor of health economics at Harvard School of Public Health, in comments to Healthcare Finance News. "But there are reasons to be cautious in generalizing from what we found to the particulars of the Affordable Care Act."

"The Oregon Experiment--Effects of Medicaid on Clinical Outcomes," published in the May 2 issue of the New England Journal of Medicine, showed substantially reduced depression and nearly eliminated catastrophic out-of-pocket costs among new enrollees. The research was led by Baicker and Amy Finkelstein, Ford professor of economics at MIT.However, it demonstrated little measurable effect in the prevalence and control of diabetes, high cholesterol or high blood pressure, three common measures that can be improved with medical care within the near two-year timeframe of the study, she said.

"Our study should make people question whether we can expect to see substantial improvements in physical health among people newly covered by Medicaid within two years," Baicker said.

The Oregon Health Insurance Experiment is the first use of a randomized controlled study designed to evaluate the impact of covering the uninsured with Medicaid and provides important evidence for policymakers as states undertake Medicaid expansion in 2014, a news release said.

"Our study was done in Oregon, just one state, and we looked over only two years and the effects that you might expect to see from insuring 10,000 people, which is a relatively small share of the population, might be quite different from what you might expect if you were to suddenly insure millions of more people," Baicker said, adding that the numbers still give policymakers much better information than they had before.

The researchers found that there are real costs to expanding Medicaid and costs substantially more because individuals use more health care. "That's the point of the program, but it dispels the mistaken view that Medicaid will actually save money by improving health by so much, keep people out of the emergency department and hospitals so effectively that it costs less money," she noted.

But real benefits come with that increase in resources, including more access to care, preventive care, utilization of doctor office visits, prescription drugs, higher quality care and higher satisfaction. "What you care about is not those inputs but the outcomes in terms of health and financial well-being and other measures of well-being," Baicker said.

The reduction in catastrophic out-of-pocket costs is "an overlooked component" of any health insurance. "It's not just about getting access to health care. It's about protecting you from financial ruin if someone in your family gets sick," she said.
Among the findings, Medicaid coverage reduced rates of depression by 9 percentage points, compared to the 30 percent of the control group screening positive for depression, the report said. But coverage did not generate any measurable improvement in physical health measures that included blood pressure, cholesterol and diabetic blood sugar control. Baicker said that their results were consistent with moderate improvement, but too small to be statistically significant.

The report noted that "…the effects of insurance in the longer run may differ." The newly insured participants in the study were a small portion of all uninsured Oregon residents and the outcomes from this group were evaluated just 17 months after obtaining coverage through a lottery. Better outcomes also may have been limited by such variables as diagnosis of underlying conditions, compliance with recommendations, medication adherence and effectiveness of treatment, the report said.

In 2008, Oregon held a lottery to give additional low-income, uninsured residents access to its Medicaid program. About 90,000 individuals signed up for the lottery for the 10,000 available openings. Two years later, the researchers conducted more than 12,000 in-person interviews and health examinations of lottery participants in the Portland, Ore. metropolitan area and compared outcomes between those randomly selected in the lottery and those not selected in order to determine the effect of Medicaid.

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