Saturday, October 26, 2013

Even More on The Oregon Medicaid Study

Charlie Clarke offers up some criticisms of my interpretation of the Oregon Medicaid study (here and here). An excerpt:

"In a follow up to the post that started a long argument between Scott Sumner and I, Anon Ymous demonstrates exactly what you shouldn't conclude from the Oregon Health Study, "To put it simply, the Oregon study showed that Medicaid does a good job of protecting the poor from crushing medical expenses, but it doesn't make them healthier or save lives."

The correct statement is, "the Oregon study showed that Medicaid does a good job of protecting the poor from crushing medical expenses, but we don't know if it makes them healthier or saves lives."

Actually, the correct statement would be "the Oregon study showed that Medicaid does a good job of protecting the poor from crushing medical expenses, but it does not provide evidence that Medicaid improves physical health".

That isn't too different from what Clarke said, but we need to remember that the folks did look to see if there was evidence in this study that Medicaid improved physical health and found none. They didn't find evidence to the contrary either, which Clarke goes to great lengths to point out.

Let me also put Clarke's quoting of me in fuller context. This is from my last post on the subject:

"I also think many people assumed that I was making an argument based on the Oregon study that I was not. I was not trying to argue that the Oregon study was an indictment of Medicaid. I was simply arguing that it was not a vindication of Medicaid. We can quibble about the results, but this study was not a big win for Medicaid. That much should be clear. Chetty seemed to imply that this study was a big win for Medicaid in its current form, and that was the claim I took issue with.

What the study did indicate was that spending money on health care for the poor helps the poor (which should be rather obvious). The statistically significant results on financial security and mental health show that having a program of this sort is worthwhile.

To put it simply, the Oregon study showed that Medicaid does a good job of protecting the poor from crushing medical expenses, but it doesn't make them healthier or save lives.

This result does, I would argue, bolster the case for reforming Medicaid. If we, for example, moved towards a system where Medicaid provided catastrophic insurance plus a subsidy that can be used to purchase supplemental private insurance or start some sort of health savings account (as some states are already doing), this program would still protect the poor from crippling medical expenses. It also would offer them more choice, improve the quality of care they receive (which is big problem with Medicaid), and help constrain costs.

Of course, there are many other proposals for reforming Medicaid (Tyler Cowen has a interesting one as well). The main takeaway from this study is that there is nothing special about the form Medicaid currently takes, and that, therefore, we should not be afraid of looking at serious reform."

Here is more from Clarke:

"As far as the politics of Medicaid, this certainly doesn't mean that supporters are immune from criticism.  In a more perfect world, Scott and Anon Ymous would be arguing the effects estimated by this study are too small to be worth the money or much smaller that liberal so and so would have thought going in.  If even the high end of the estimates are not worth the cost, then that is a big feather in the cap of Medicaid opponents.

Alas, the commentary we get is on the order of: Study proves Medicaid doesn't make people healthier.  And then we get attacks on Raj Chetty for not parroting that false interpretation."

My issue with Chetty's interpretation of the study was the unambiguously pro Medicaid result he implied came with it. In fact, the study did not find evidence of improvements in phyiscal health. That doesn't mean that Medicaid doesn't improve physical health, but it does mean that fairly high caliber study found no evidence that it did. 

I don't know how many different times and different ways I have to explain that I am talking about the absence of a positive result and not the presence of a negative one. The Oregon study did not find evidence of statistically significant improvements in physical health. That is a pretty significant result. Obviously, it is not as bad as positive evidence that Medicaid does not improve physical health. Still, if we had the critics and supporters of Medicaid in its current form predict the results on physical health in advance, I think that it is fairly clear that the critics would have been closer.

We spend hundreds of billions of dollars on this program every year. Any attempt to reform or reduce the rate of spending growth in this program is met with claims that Medicaid saves lives and makes people much healthier. My response isn't: "the Oregon study proved that Medicaid doesn't save lives or make people healthier". Instead, my response is: "where is the evidence? The Oregon study didn't find any. Most other studies haven't either."

The defenders of Medicaid seem to think that the burden of proof is shared on this question. It is not. It is squarely on the shoulders of those making these bold claims about Medicaid, as they are the ones defending the status quo of a program that commands a lot of resources at least partially based on very bold claims about what good the program supposedly does. Claims that, thus far, are quite scant on evidence. 

The Oregon study wasn't proof that Medicaid doesn't make people healthier. If Clarke thought I was implying otherwise, I apologize. Even though I tried to be clear that this was not the point I was making, I was still not clear enough. However, the Oregon study was yet another example of a study that failed to provide evidence for the bold claims about Medicaid.

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