Since the success of ObamaCare depends a great deal on the success of Medicaid, it makes sense to know as much as possible about Medicaid’s effectiveness. As Thomas Donlan points out in the latest Barron’s, an accidental experiment in Oregon is helping to provide valuable information.
Read Donlan’s article to learn the interesting details of Oregon’s case study. This blog entry focuses on his conclusions.
Medicaid coverage fulfilled the traditional role of health insurance by nearly eliminating catastrophic out-of-pocket medical expenditures (defined as spending more than 30% of annual income). Those with Medicaid had a lower probability of a positive screening for clinical depression, and they increased the use of many preventive services, such as mammograms and regular checkups.
Bottom line: Adding people to the Medicaid rolls not surprisingly increases the cost of running the Medicaid program; more surprisingly, significant health benefits to the lottery winners were hard to see, or they may not show up in measurable statistics until more time has elapsed.
If more people take medicine well known to lower the risks of diabetes and heart disease, those people should eventually show the benefits. Regular checkups and mammographies are believed to reduce the risk of cancer, among other things. The treatments may not pay off for decades, but it’s too soon to say they will never pay off. If they don’t pay off, the medical establishment should change the practice for everyone.
The inference from Oregon that should concern all of us is the possibility that health insurance, whether provided by the government in Medicaid, by our employers, or even by our own expenditures, does not much improve “wellness” in the short term. Other studies—and experience from socialized medicine in other countries—also suggest that a lot of routine care will catch and avert life-threatening ailments for a few people, at a high cost for all.
The Oregon experiment suggests that most Americans, not just Medicaid beneficiaries, receive excessive health care of debatable utility. We will never change the rising cost of health care if everyone, rich and poor, young and old, insured and uninsured, receives all the health care they want with little or no out-of-pocket expense.
