Fact-Check Central

Did a Harvard study prove that Obamacare raises healthcare costs without improving health?

In other words, what Reichert is calling a "Medicaid spending increase" is a voluntary increase in co-pay spending by low-income adults for badly needed services that previously had been out of reach for them. Furthermore, the upper end of that spending range is almost certainly for catastrophic care services that although expensive with Medicaid, would otherwise have been out of reach for low-income families--unless of course, they happened to have $80,000 stashed in a box of corn flakes for rainy day surgeries and cancer treatments.

Second, the 95% (or "2-sigma") confidence interval for that figure reflects a standard deviation that is nearly half the size of the mean. The spread in the actual out-of-pocket expenditures is larger than the value being reported, and literally covers everything from the cost of a blender to several months’ take-home pay for many program participants. Essentially this is like using an air-dropped cluster bomb to mark the location of a penny. The usefulness of such a figure for policy planning is questionable at best.

Reichert and many Republicans claim that Baicker's team found "no better clinically-measured health outcomes." That is false. What they reported was no significant change over a two-year period in three of the proxies they tracked: high blood pressure and cholesterol, and average glycated hemoglobin levels used to diagnose diabetes. But they also reported significant improvements in the treatment of depression, early diagnosis of diabetes, access to preventative medicine and health care services, and drastically reduced medically related financial hardships. There isn't a medical professional anywhere on this earth who would call Medicaid a sweeping failure based on the former alone, and not consider the latter an improvement in care. While it is true that there's no consensus regarding the cost-effectiveness of preventive healthcare measures in general, their ability to reduce long-term costs of many chronic illnesses (e.g. diabetes) and improve quality of life are beyond dispute (Maciosek et al., 2010; Russell, 1993), and reductions in violence due to improved treatment of depression and other mental illnesses would likely impact the cost of treating the resulting catastrophic injuries as well.

Furthermore, the authors rightly report that their study had limitations that directly affect the generalization of its conclusions to the ACA nation-wide. First, there are several respects in which Oregon's low-income uninsured population is not a representative sample of the overall uninsured population in the United States in general. It was heavily weighted toward able-bodied whites and restricted to those who are below the federal poverty level. It's not at all clear that the results can be extrapolated to the national racially diverse population without access to adequate healthcare insurance, including those above the poverty line. Second, while their population sample was large enough to be statistically significant for their purposes, it was far too small to reflect any potential systemic factors affecting access to care (e.g. large-scale pressures on providers and underwriters, etc.), and the period studied was too short for meaningful conclusions to be drawn regarding long-term mortality and quality of care. To be sure, the ACA is not perfect. Few economists and healthcare professionals wouldn't agree that it could be improved, and despite its limitations this study provides valuable insight into how that might be done. But to call Medicaid or the ACA a costly blanket failure based on it alone is at best uninformed.

A couple years ago, while vacationing in the San Juan Islands my fiancé and I met a man who was an English professor. Over breakfast one morning he told us of a colleague of his who was an associate professor of English Literature at a Seattle-area community college. As an associate professor without a full teaching schedule, his colleague didn't qualify for healthcare coverage from the college he worked for and didn't earn enough to purchase coverage on his own. In his 40's he was diagnosed with a fatal but very treatable form of cancer (I don't recall which), but without coverage from the college or the ability to afford the expensive treatments needed, he had no options but to hope for the best. He was in his mid-40's when he died of it... even though with healthcare it could have been treated with a very high recovery rate.

Reichert would have us believe that this man was much better off without the ACA's expanded Medicaid access... because he wasn't "forced" to make affordable co-pays for the cancer treatments he needed, and saving his life wouldn't have been a better "clinically-measured health outcome" anyway...

Had he survived long enough to attend one of Reichert's town halls and been given a chance to tell his story, I doubt he would've agreed.

References

Baicker, K., Taubman, S. L., Allen, H. L., Bernstein, M., Gruber, J. H., Newhouse, J. P., ... & Finkelstein, A. N. 2013. "The Oregon experiment—effects of Medicaid on clinical outcomes." New England Journal of Medicine, 368 (18), 1713-1722. May 2, 2013. Available online at http://www.nejm.org/doi/full/10.1056/NEJMsa1212321. Accessed Feb. 26, 2017.

Cannon, M. 2013. "Oregon Study Throws a Stop Sign in Front of ObamaCare's Medicaid Expansion." RealClearPolitics May 2, 2013. Available online at http://www.realclearpolitics.com/articles/2013/05/02/oregon_study_throws_a_stop_sign_in_front_of_obamacares_medicaid_expansion_118220.html. Accessed Feb. 26, 2017.