What’s The Story With Obamacare?
By Katherine Baicker and Amy Finkelstein
Health Affairs Blog, December 9, 2016
States, patients, and voters are wrestling with the pros and cons of dramatic changes in public health insurance coverage, including extending, maintaining, or rolling back Medicaid expansion under the Affordable Care Act (Obamacare) — an often emotional topic of debate. The stories that are told about the effectiveness—or lack thereof—of coverage in improving health and health care usually relate compelling personal experiences, putting a human face on an otherwise abstract argument.
Policies are not enacted in the abstract; they affect real people’s lives, and we should all be concerned with how policy changes help or harm them. Unfortunately, as moving as those stories can be, they can just as easily lead us in the wrong direction as the right one. What we need is evidence, not anecdote.
Medicaid Coverage And Care Use
A key question in the Medicaid debate is whether expanded coverage reduces the use of the Emergency Department (ED) — getting people into the doctor’s office earlier, improving health, and reducing health care spending. Solid evidence is very hard to come by, but we had an opportunity to evaluate the impact of expanding Medicaid using scientifically rigorous methods rarely available in answering public policy questions.
In 2008, Oregon used a lottery to allocate a limited number of Medicaid slots — generating, in essence, a randomized controlled trial of Medicaid. This let us gauge the effects of the program itself, isolated from the usual confounding factors, and allowed us to collect thousands of stories—otherwise known as data!—about people’s experiences on and off of Medicaid.
We found that, contrary to many people’s expectations, Medicaid increased use of the ED by 40 percent. New research tells us that this increase persisted for at least two years, and that Medicaid did not make patients more likely to substitute a visit to the doctor for one to the ED.
In addition to this evidence, gleaned from a randomized evaluation of the experiences of tens of thousands of uninsured and newly insured Oregonians, we also conducted hundreds of interviews to learn how people felt that having Medicaid—or not—affected their lives. These individual narratives were invaluable for deepening our understanding of the experiences of those in study. But they also underscored how easy it is, in the absence of solid evidence, to find an anecdote to match any “answer.”
Conflicting Anecdotes About Medicaid
This is an all-too-common situation. The Oregon experiment has produced a wealth of data and rigorous evidence on the impact of Medicaid on people’s lives. We found that Medicaid increases health care use, improves financial security, improves self-reported health, and reduces rates of depression. For nearly every outcome of interest, we heard stories of experiences that matched the average effect of the expansion on the newly covered population, as well as compelling stories that did not.
Anecdotes Cannot Substitute For Rigorous Research
It’s tempting to think that we can recognize which anecdotes are most representative of the “real story” when we hear them — but we really can’t. We might be more likely to believe the story that is more poignant. Or maybe the one that lines up with our prior beliefs.
This is why, wherever possible, we need to rely on evidence from rigorous research—rather than compelling anecdotes—to get an accurate assessment of a policy’s effects
The Oregon example highlights that it is possible to use randomized evaluations to investigate important health policy questions. As researchers, we need to do a better job of providing the public with that evidence. Policymakers need to be receptive both to partnerships in building the evidence and to using the evidence to make better-informed policy decisions. And the media needs to resist the urge to allow unsubstantiated anecdotes to stand in for real evidence — despite the fact that readers may be drawn in by anecdotes.
Personal narratives can yield vital insight into how policies affect people’s lives, humanizing the stories behind the numbers and suggesting important areas for further research. Dismissing these compelling stories as “mere anecdotes” in favor of more rigorous—but impersonal—data analysis can seem heartless. But making policy based on unrepresentative anecdotes can inflict much greater harm on many more people. We hope that use of rigorous evidence will become the norm rather than the exception in health policy.
By Don McCanne, M.D.
As Professors Baicker and Finkelstein indicate, rigorous research in health policy provides a foundation based on fact for making policy decisions – certainly valuable in our contemporary scene driven by political ideology. But it is imperative that the valid facts be applied with care and not to the exclusion of non-research based knowledge of health policy.
As an example, the Oregon natural experiment provided helpful but limited data. The authors would surely disagree with some statements made by a few politicians and other individuals in the policy community to the effect that the Oregon experiment proved that Medicaid is a wasteful program and should be abandoned, with even at least one saying that Oregon Medicaid patients were worse off than the uninsured. Part of the problem is that the study was underpowered – an unavoidable consequence since is was a natural experiment.
Another example is the RAND HIE. It was a study of cost sharing in workers and their families – a relatively healthy subset of our population. Since the study was for a relatively short time during the healthy years of their lives, the intrinsic validity of this study does not necessarily have extrinsic validity, so the findings should not be extrapolated to apply to the entire population. Yet that is exactly what has been done, especially with the escalation in the use of high deductibles in insurance plans.
The purpose of cost sharing is to reduce spending, but it can be harmful, both because it causes individuals to forgo beneficial health care services, and it creates financial hardships for people in need. Yet ideologues have largely ignored the harm and have pushed this as a means of making patient-consumers more responsible purchasers of health care. One advocate has carried this to the extreme that cost sharing should be inflicted on poor people with no disposable income – a heartless public policy – and she is about to become administrator of CMS.
We do not need rigorous research studies to show us that a well designed single payer system can slow the rate of health care spending while including absolutely everyone and making it affordable for each individual through equitable progressive tax policies. Other nations already do that – providing health care at a fraction of what we are spending through our dysfunctional health care financing system.
There would still be plenty of research opportunities for Baicker and Finkelstein in a single payer system, but at least it would be within a system designed to serve, above all, the health care needs of patients, rather than a system designed to support the administrative excesses and egregious pricing of the stakeholders in our current system.
Incidentally, studies on administrative waste and excess pricing have already been done. We should use them.
By Don McCanne, M.D.
Katherine Baicker and Amy Finkelstein are correct. Rigorous policy research can provide a beneficial input to the policy making process. But there is the risk that policy science can lead only to minor tweaks in the health care financing system when comprehensive overhaul is an imperative.
For instance, many studies have been done that have determined whether various factors influence the numbers of individuals who remain uninsured. Based on these results, the financing system can be tweaked to encourage greater enrollment. But all of these measures combined have still left about 29 million people uninsured.
Suppose instead of doing a study, you simply approved legislation that would automatically enroll everyone, for life, in a national single payer program. What policy study would you need to carry out to determine whether that would be effective in including many or most of the remaining uninsured? Well, you don’t need a rigorous policy study. All of the remaining uninsured would be covered automatically. If someone slipped through the cracks, they would be enrolled at the time they accessed the health care system.
When you look at the various policies being applied in either the public or private sectors, you see that many are based on research that has been narrowly focused on our current fragmented, dysfunctional financing system – simply trying to fix an irreparably broken system.
You do not need research when the system is designed to specifically meet reform goals. Besides requiring that it be truly universal, financing can be made affordable for each individual through equitable, progressive tax policies. Resource allocation can be improved through central planning, which improves access. Administrative efficiency is achieved by eliminating the multitude of expensive, superfluous financing intermediaries. You do not need to study this. You just do it.
The Oregon health insurance experiment (OHIE) – a study conducted by Baicker and Finkelstein – produced some interesting results. But how much impact has it had in reducing the major, fundamental deficiencies in our current health care financing system? I do not recall having seen any policy changes resulting from it. That is not to say that it was an inappropriate study. Being a natural study, it was a rare opportunity to advance policy science, and it was quite appropriate that the study was done.
The point is that the policy community buries itself in these studies that really do have very little impact on the major problems facing us in health care financing today. Besides, the studies would be more valuable done within a health care financing infrastructure that was designed to serve patients rather than to meet medical-industrial business goals, including fine tuning a wasteful private insurance industry that should be discarded instead.
Let’s replace the financing infrastructure with one that meets our goals and then study it to see what beneficial tweaks we can provide.