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The Conservative Assault on Medicaid

The right wing’s attack on government insurance programs has taken a novel and brash twist: Conservatives have started arguing that people on Medicaid would be better off with no insurance whatsoever. If you're a thirty-something mother making, say, less than $20,000 as a hotel housekeeper, some conservatives think you'd be better off uninsured--i.e., completely at the mercy of charity care, depending in many cases on emergency rooms even for routine treatment--then if you had the government's insurance policy for the poor.*

Scott Gottlieb, a physician and former Bush Administration official now with the American Enterprise Institute, makes this argument today in the Wall Street Journal editorial page. But he's not the first conservative to say such things and I assume he won't be the last. (Fox News segment coming in 5, 4, 3...) I mentioned this argument briefly on Wednesday, but let me say just a bit more on why I find it unpersuasive and, ultimately, so maddening.

The basis for the claim is a handful of studies, chief among them a clinical study from researchers at the University of Virginia, in which people on Medicaid end up with worse outcomes than people with no insurance at all. As a general rule, the problem with studies like these is the underlying differences in the groups being studied: Simply put, the uninsured, overall, tend to be healthier than people on Medicaid. That’s going to skew the raw results, with the uninsured getting better medical outcomes. The results will suggest correlation, not causation.

Good studies adjust for this fact and, to their credit, the University of Virginia researchers tried to do that. But, as Austin Frakt and Harold Pollack have written, the researchers controlled only for “observable” factors--age, disability, presence of certain medical conditions, that sort of thing--that were present in the medical records made available to them. Anybody who has studied the Medicaid population closely--and by that I include not just academics but also journalists, like myself, who have interviewed providers, patients, and social workers extensively over the years--will tell you that the differences in the populations go beyond these clinical markers. 

The University of Virginia researchers actually acknowledged as much in their paper, mentioning a whole list of factors they couldn't address. Hospital staff, for example, are more likely to help the sickest patients navigate the enrollment process into Medicaid, which can be famously difficult. Medicaid patients may also end up in worse health because they have fewer family and community supports to keep them healthy or to get them help if something goes wrong. One key sign that the University of Virginia paper obscures the true distinctions among its patient populations is that Medicare patients also ended up with worse outcomes than people with no insurance, even after their adjustments. If there's a theory for why seniors would be better off uninsured than on Medicare, I'm eager to hear it.

Austin and Harold, bona fide experts both, offer more details in their exhaustive blog posts on the subject. In so doing, they draw on a large body of research published by some of the smartest and most respected scholars in the field. If you’re interested, it’s worth reading their arguments alongside Gottlieb’s and those of Avik Roy, who has been making this argument for a while. While none of the research in this field is perfect, given the difficulty of finding a truly randomized experiment, the studies suggesting Medicaid improves health strike me as both more thorough and, ultimately, more compelling. But readers should make that judgment for themselves.

To be clear, Gottlieb, Roy, and the rest are absolutely correct when they suggest Medicaid has problems. For certain populations and particularly in certain states, it’s unambiguously inferior to private insurance and to Medicare. Partly that reflects structural problems in the program, like poor management of chronic disease. But partly (perhaps mostly) it reflects the fact that Medicaid reimburses the providers of medical care at absurdly low rates. This makes it harder for Medicaid patients to find professionals that will see them.

(By the way, this may be yet another confounding factor the University of Virginia study missed: Low reimbursement rates may restrict Medicaid patients to less experienced surgeons and less technologically advanced hospitals.)

The solution to this problem is to spend more money on the program, so that it reimburses physicians and hospitals at levels closer to other insurance programs. The Affordable Care Act actually does that, albeit modestly, by boosting Medicaid payments to primary care doctors and reducing the number of uninsured who will get pure charity care. Do I wish the Affordable Care Act would raise reimbursements more? Absolutely. And would I be willing to see at least some of the Medicaid population get coverage directly from private insurers? Maybe, depending on the program design and regulations.

But either course of action would require more government spending and--surprise!--that's something the critics of Medicaid almost universally refuse to do. Gottlieb, to his credit, acknowledges the implications: He says explicitly the program should be less comprehensive, in order to free up dollars for higher reimbursements. Roy has at various points made similar suggestions, although his ideal solution is less clear, given his advocacy for Switzerland's highly regulated, highly subsidized universal coverage scheme. In any event, these conservative solutions usually come down to solving one problem (low reimbursements) by creating another (gaps in coverage). Patients with certain conditions would undoubtedly gain access to doctors and hospitals, but only because others would lose it. 

This is why the conversation about Medicaid is so frustrating. First critics deny Medicaid the funds it needs. Then they blame Medicaid when it doesn’t perform up to standards. Then they suggest replacing the program with a more "flexible" or private alternative that won't actually improve access overall and might even limit it further.  

Of course, conservatives have been making these sorts of arguments for a very, very long time, and not just about Medicaid. In that sense, I guess, this latest argument isn't novel at all.

*It's worth keeping in mind, as reader K_Wilson notes in the comments, that the majority of money in Medicaid goes to the disabled and elderly, not women with children and other groups most people associate with the program.