In 2008 the state of Oregon decided the fairest way to choose enrollees for the expansion of its Medicaid program would be via lottery.
A sick joke, eh? So it seemed at the time, at least to many observers. But state Medicaid administrators were quite serious. Oregon opened 10,000 new slots for its program, for which almost 90,000 people applied. The state was forced into such a choice by recession-driven budget cuts.
While the "Medicaid lottery" seemed absurd, to social scientists it was an ideal example of a randomized controlled trial – a perfect way to assess the impact of Medicaid coverage on previously uninsured adults, and to compare the health of lottery "winners" to those applicants who weren't so lucky.
Such an analysis would be particularly useful in the case of Medicaid, as the healthcare program for poor people has been maligned by critics for many a year. During the national debate over healthcare reform legislation, Medicaid became a convenient straw man for many foes of "government-run" healthcare who wanted to see reform fail.
But contrary to those who suggest that Medicaid coverage is next to useless, we now have our first evidence that Medicaid may actually be quite effective in providing care to the most vulnerable members of society.
A National Bureau of Economic Research study, released in July, examines the Oregon experience three years after it was proposed and nearly one year into enrollment. The study, which is ongoing, found that Medicaid coverage in Oregon increased access to healthcare for the new enrollees, boosted their use of health services, including preventive care, reduced out-of-pocket costs and medical debt, and provided "a general sense of improved well-being."
A few examples from the NBER research are instructive. The data revealed that Medicaid coverage resulted in:
• A 35 percent increase in the probability of having an outpatient visit.
• A 15 percent increase in the probability of taking a prescription drug.
• A 30 percent increase in the probability of a hospital admission.
Coverage for the new Oregon enrollees also boosted the probability of having a regular office visit for primary care by 70 percent and the likelihood of seeing the same physician on a regular basis by 55 percent.
The benefits of Medicaid coverage also made themselves apparent in people's economic lives, as the study showed that coverage for new enrollees led to a 25 percent decline in the probability of having an unpaid medical bill sent to a collection agency, and a 35 percent decline in having any out-of-pocket medical expenditures.
Oregon enrollees also experienced a 40 percent decline in the likelihood of having to borrow money or skip paying other bills to pay for healthcare. It is true, however, that annual healthcare expenditures increased by 25 percent, and Medicaid coverage did not reduce the use of emergency departments. Nonetheless, the difference between having Medicaid coverage and no coverage at all was profound.
The Oregon enrollees – as well as those who lost the lottery – were an unhealthy group: 18 percent had diabetes, compared with 7 percent of the general population; 28 percent had asthma, compared with 14 percent of the general population; and 56 percent had been screened for depression, versus 28 percent of the general population. This makes the boost in access to care even more important and the results of the study revelatory.
Supporters of the Affordable Care Act have seized on these study results to suggest that the expansion of coverage provided by the reform legislation will have the same salutary effects on a national scale. Indeed, the ACA will expand healthcare coverage to approximately 31 million uninsured people by 2019, a significant proportion of them via Medicaid. If a majority of newly insured people nationwide experiences anything akin to those Oregon enrollees, one would have to deem healthcare reform at least a partial success.
Still, as the California HealthCare Foundation has noted, the relatively small number of new Medicaid enrollees in Oregon — an increase of less than 2 percent — meant that constraints in the supply of primary care physicians was not a concern in that state. That will not be true in every state. Medicaid reimbursement rates in Oregon are also more generous than in many states, a fact that providers will find particularly important in assessing the success of Medicaid expansion.
But even recognizing these concerns, the success of the Oregon experiment should give heart to those who believe that a boost in access to care, and its attendant medical and economic benefits, is justification enough for healthcare reform legislation.