Monthly Archives: May 2013

Oregon Revisited

It has been a couple of weeks since the landmark Oregon Experiment paper came out, and the buzz around it has subsided.  So what now?  First, with passage of time, I think it is worth reflecting on what worked in Oregon.  Second, we should take a step back, and recognize that what Oregon really exposed is that health insurance is a small part of a much bigger story about health in general.  This bigger story is one we can’t continue to ignore.

So let’s talk quickly about what worked in Oregon.  Health insurance, when properly framed as insurance (i.e. protection against high, unpredictable costs) works because it protects people from financial catastrophe.  The notion that Americans go bankrupt because they get cancer is awful and inexcusable, and it should not happen. We are a better, more generous country than that.  We should ensure that everyone has access to insurance that protects against financial catastrophe.  Whether we want the government (i.e. Medicaid, Medicare) or private companies to administer that insurance is a debate worth having.  Insurance works for cars and homes, and the Oregon experiment makes it clear that insurance works in healthcare.  No surprise.

The far more interesting lesson from Oregon is that we should not oversell the value of health insurance to improving people’s health.  While health insurance improves access to healthcare services (modestly), its impact on health is surprisingly and disappointingly small.  There are two reasons why this is the case.  The first is that not having insurance doesn’t actually mean not having any access to healthcare.  We care for the uninsured and provide people life-saving treatments when they need it, irrespective of their ability to pay.  Sure – we then stick them with crazy bills and bankrupt them – but we generally do enough to help them stay alive.  Yes, there’s plenty of evidence that the uninsured forego needed healthcare services and the consequences of being uninsured are not just financial.  They have health consequences as well.  But, claims like 50,000 Americans die each year because of a lack of health insurance? The data from Oregon should make us a little more skeptical about claims like that.

So what really matters?  Right now, we are pouring $2.8 trillion into healthcare services while failing to deliver the basics.  To borrow a well-known phrase, our healthcare system is perfectly designed to produce the outcomes we get – and here’s what we get: mediocre care and lousy outcomes at high prices.  Great.

Let’s use cardiovascular disease as an example.  We know it kills more Americans than any other condition.  The CDC estimates that we spend about $500 Billion on CV disease.  With that kind of spending, you’d think we would be really good at managing it.  When it comes to cardiovascular disease, management is relatively straightforward: there are four risk factors worth thinking about: hypertension, diabetes, high cholesterol, and smoking.  But guess what?  We’re really not that good at managing these conditions, and evidence suggests that health insurance has almost nothing to do with it.  Here’s the evidence.:

  1. Hypertension: nearly 70 million adults (1 in 3) have it.  More than half of these Americans’ blood pressure is poorly controlled.  Rates of poor control are only marginally worse among the uninsured (58%) than among the insured (51%).
  2. Diabetes: Nearly 26 million people have it. Rates of poor control?  You guessed it: about half, and the same between the uninsured (46%) and the insured (44%).
  3. High cholesterol:  Again, about 70 million adults (1 in 3) have it.  Rates of control?  Even worse!  About 1/3 have their cholesterol under control.  The proportion with poor control is lower among the insured (60% versus 77%) than the uninsured, but even among the insured, frankly, cholesterol management is terrible.
  4. Smoking: About 50 million people smoke.  None of them have it under adequate control (by definition).  Most of these people have health insurance.

Type of insurance really doesn’t matter. A landmark New England Journal paper in 2003 found that the quality of care for privately insured Americans was about as bad as it was for those on government insurance or who were uninsured. On a global measure of how often patients get the right care, insurance really doesn’t make a big difference. See below:

Adjusted Percentage of Recommended Care Received by Participants

P- value









Managed Care



Private non-managed care



*From: Asch SM, Kerr EA, Keesey J, Adams JL, Setodji CM, Malik S, et al. Who Is at Greatest Risk for Receiving Poor-Quality Health Care? New England Journal of Medicine. 2006;354(11):1147-56. PubMed PMID: 16540615.

This, of course, begs the question: how can we be spending so much money and not doing better on cardiovascular disease management?  How can this be?  The knee-jerk reaction that I hear over and over again is to blame the patient – they are not compliant with their medications.  They don’t follow up.  They don’t understand their condition.  But these are weak excuses for a healthcare system that only pays when a patient visits a doctor’s office or an ER or a hospital.  We have a supply driven healthcare system because of a failure of imagination – we only seem to know how to pay for visits and medications and tests and procedures.

If we’re going to get healthcare to improve health, we have to seriously rethink the way we pay for it.  I don’t mean adding a 1% incentive to a doctor’s reimbursement for measuring blood glucose.  That doesn’t do much and is usually just insulting.  I mean adding incentives to make providers focus on managing patients’ health.  The problem right now is that no one gets paid if they figure out how to get patients to take their medications regularly.  No one gets paid to communicate more effectively with their patients or get them to quit smoking.  We don’t financially reward providers who improve health.  In fact, we punish them: because as people get healthier, they will have fewer visits, decreasing provider revenue.

This is more than a diatribe against fee-for-service.  It’s a diatribe against paying for healthcare. We need to find a way to pay for health.  Yes, it sounds naïve, but we have to start thinking outside the box if we want transformative changes rather than iterative ones.  For instance, what if we paid for better blood pressure control?  Instead of getting paid to measure every patient’s blood pressure (as many pay-for-performance schemes do), what if we paid for lowering blood pressure among those with severe hypertension?  Yes, there are issues of case-mix adjustment, but those are solvable.  For each one of us, the things that would improve our health surely vary.  What if the payment system could take patient preference into account, paying for things that we each individually valued as important to our health and well-being?  None of this is easy.  But we surely haven’t built this insanely complex and dysfunctional payment system because it’s the easiest way to pay for healthcare.  We got here despite ourselves.

My lesson from the Oregon experiment is that our system pours hundreds of billions of dollars into stuff, but pays little attention to whether any of that stuff is improving people’s health.  Adding more people to the insurance rolls –pouring more money into a low value healthcare system – isn’t going to improve people’s health.  Will it help the uninsured financially?  Sure.  Is providing financial security to poor Americans a good thing to do?  Absolutely.  No American should be one car accident away from bankruptcy.  But until we improve the underlying functioning of the healthcare delivery system, we shouldn’t expect any intervention that improves access to more healthcare services to have a meaningful effect on people’s health.

Misunderstanding Oregon

Much has already been written about the Oregon Medicaid study that just came out in the New England Journal of Medicine. Unfortunately, the vast majority is reflex, rather than reflection.  The study seems to serve as a Rorschach test of sorts, confirming people’s biases about whether Medicaid is “good” or “bad”.  The proponents of Medicaid point to all the ways in which Medicaid seems to help those who were enrolled – and the critics point to all the ways in which it didn’t.  But, if we take a step back to read the study carefully and think about what it teaches us, there is a lot to learn.

Here is a brief, and inadequate, summary (you should really read the study):  In 2008, Oregon used a lottery system to give a set of uninsured people access to Medicaid.  This essentially gave Kate Baicker and her colleagues a natural experiment to study the effects of being on Medicaid. Those who won the lottery and gained access were compared to a control group who participated in the lottery but weren’t selected.  Opportunities to conduct such an experiment are rare and represent the gold standard for studying the effect of anything (e.g. Medicaid) on anything (like health outcomes).  Two years after enrollment, Baicker and colleagues examined what happened to people who got Medicaid versus those who remained uninsured.  There are six main findings from the study.  Compared to people who did not receive Medicaid coverage:

  1.  People with Medicaid used more healthcare services – more doctor visits, more medications and even a few more ER visits and hospitalizations, though these last two were not statistically significant.
  2. People with Medicaid were more likely to get lots of tests – some of them probably good (cholesterol screening, Pap smears, mammograms) and some of them, probably bad (PSA tests).
  3. People with Medicaid, therefore, not surprisingly, spent more money on healthcare overall.
  4. People with Medicaid were less likely to go bankrupt due to healthcare expenditures.
  5. People with Medicaid had less depression and overall, had better health-related quality of life.
  6. People with Medicaid did not have meaningful improvements in their hypertension, cholesterol, diabetes, or other measures of overall health.

It is first worth taking a moment to dispense with those who will try to nitpick the methodology.  Read through the paper carefully and spend time going through the 62 page single-spaced supplementary appendix and you’ll find that this is about as good of a study as will be done on this topic for the next generation.  Kate Baicker, who led the study, is the smartest person I know and whenever I disagree with her, it’s because she’s right and I’m wrong.  These are the gold standard of folks using the gold standard of methodology to answer an incredibly important question: what is the effect of Medicaid on financial, mental, and physical health.  So, let’s get to the lessons.

  1.  Insurance works.  The goal of my homeowner’s insurance is that if I have a fire, I won’t become bankrupt.  The goal of health insurance should be to ensure that if you get hit by a bus, you won’t go bankrupt.  Medicaid, as insurance, worked.
  2. Insurance gives you peace of mind.  I never lie awake worrying that if I get sick, my family will go bankrupt.  Medicaid may therefore be giving people reassurance, and making them feel better, which may be why there was less depression in the Medicaid group (they certainly weren’t taking more anti-depressants).
  3. Insurance improves access to healthcare services.  Although people without health insurance still got healthcare (they were spending $3,257 per year on healthcare, seeing 5.5 doctors a year, getting medications, outpatient surgery, etc.), people on Medicaid got more.

But this was all predictable and none of it should be a surprise.  What has been fundamentally misunderstood is why it didn’t lead to better health.  And that is the biggest lesson from Oregon:

Healthcare isn’t health, and the missing link is Quality.

Let’s unpack this.  To date, the notion for improving health has been simple: if we give people access to health insurance, they will get more care, and therefore will have better health.  Oregon tells us that’s not quite right.  The lesson from Oregon is:  if we give people access to health insurance, they will use more healthcare, and they will feel better for it.  But, their health may not be that much better off.  How could this be?

The explanation is simple.  It’s not about access to healthcare; it’s about access to high quality healthcare.  Americans fail to consistently receive high-quality care and the people on Medicaid in Oregon were no exception.  There is some evidence that providers who disproportionately care for Medicaid patients deliver lower quality care, but the problem is much bigger than Medicaid.  In fact, most Americans get pretty mediocre quality healthcare.  Therefore, not surprisingly, healthcare often fails to improve health.

In the Oregon study, we see that many people, especially in the high risk groups, have poorly controlled blood pressure, diabetes, hypercholesterolemia, and depression.  Yes, Medicaid seemed to help a little, but not enough.  People with Medicaid had, on average, 7.2 office visits over the past 12 months.  That’s more than once every 2 months.  Yet, their blood pressure, cholesterol, and blood sugars barely budged.  This is not an access problem.  This is not about “Medicaid is bad” or “insurance is bad”.  This is about what happened (or did not happen) in those visits – namely, evidence-based care that we know improves health.

Most healthcare policymakers talk about the three legs of the stool of the healthcare system: cost, access, and quality.  The Affordable Care Act makes a big effort to improve access, but does less on cost and little on quality.  That’s unfortunate.  Oregon reminds us that if we want to improve the health of the population, we will have to make real and concerted efforts to ensure that people are receiving high-quality care.  We can’t just improve access and think that our job is done – in fact, its just the beginning.

Ultimately, while many factors affect health (such as education, income, neighborhoods where we live, etc.), healthcare matters too.  And it better – we’re spending $2.8 trillion on it.  Oregon tells us that insurance has its benefits – it gives us peace of mind and improves access to health services like office visits and preventive screening.  But it doesn’t do that much for health, because it’s not about access to healthcare.  It’s about access to high quality healthcare.  Quality is the link between healthcare services and better health outcomes.  And we need to spend more time working on that.