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May 03, 2013

Medicaid, the $7.5 Trillion Anti-Depression Program

The big headline from the Oregon Medicaid study is that paying for people's health care saves them from spending their own money (duh!) and marginally increases some self-reported psychological indicators (that is, stuff like "how do you feel?" which can be affected simply by the knowledge that someone's paying your bills) but does nothing whatsoever to improve the health of people on Medicaid.

Leftists, seeking any kind of spin, are now lauding the Medicaid program as the greatest anti-depression program since the Mousketeers. But is that really why the country is paying $7.5 trillion dollars on a program? To make people feel slightly better emotionally, without any tangible physical improvement?

Meghan McArdle wrote a long piece that I was trying to think of a way to link most of the day yesterday -- it's long, it's a little wonky, but it's very good. I was trying to figure out a way to sell people on reading it.

Well, anyway, it's an article where you wind up feeling you know slightly more after having read it than you did before. It explains why this study is so important, and really should be treated as very significant new scientific information about policy and policy outcomes.

And yet it's simply being treated as fodder for spin. A great big pile of new scientific information has been added to the debate, but the hacks are simply ignoring it in favor of talking up their shopworn bromides and wishcasting.

The supposed Party of Science sure seems to prefer Faith & Dogma to actual Science. The piece is worth reading in full, but here are her conclusions.

First, she notes that the left, in order to claim that this study vindicates them, are compelled to claim they never really expected ObamaCare or Medicaid to achieve much of anything at all and so they're wonderfully surprised to learn these programs may marginally improve self-reported indica of psychological wellness.

There’s been a bit of revisionist history going on recently about what, exactly, its supporters were expecting from Obamacare–apparently we always knew it wasn’t going to “bend the cost curve”, or lower health insurance premiums, or necessarily even reduce the deficit, and now it appears that we also weren’t expecting it to produce large, measurable improvements in blood pressure, diabetes, or blood sugar control either. In fact, maybe what we were always expecting was a $1 trillion program to treat mild depression.

She then criticizes those who have made certain that they are fully up-to-date on their immunizations against significant new information.

Even if you think that Medicaid has larger effects than we're seeing here, I think you also have to acknowledge that many of the uninsured seem to be surprisingly good at accessing the health system, if not paying for it.

Because, of course, this study shows that there is no difference between those on Medicaid -- free health care -- and the uninsured pool. This means that the Republican Talking Point -- about which I confess I was skeptical myself-- that the uninsured do get health care, is substantially vindicated.

At least on the markers that the study looked for, the majority of them--even the majority of the diabetics, hypertensives, and hypercholsterolemics--are doing about as well as their counterparts in Medicaid. They maybe don't feel as good about it, but from the outside, they're not that much different.

This was pretty much the thesis that Richard Kronick offered, when his observational study (much to his surprise!) suggested that there was no adverse mortality risk to going without insurance. Maybe those without insurance, he said, were simply finding a way to get at least basic care. Maybe in a costly and financially risky way, but still getting it.

If that's true, though, here's the question we have to ask: is Medicaid, or Obamacare, the program that we would design to solve these problems? We might think that they'd better be solved with free mental health clinics, or cash.

I'm not sure that if you'd waved this study at the American public two years ago, they'd have said, "Yup, this makes me want to put 16 million new people into Medicaid, and enact a giant new regulatory apparatus to force everyone else in the country to buy insurance." But of course, we didn't have this study. Instead, we heard that 150,000 uninsured people had died between 2000 and 2006. [A factoid debunked in the rest of the article-- ace.] Or maybe more. With the implication that if we just passed this new law, we'd save a similar number of lives in the future.

Which is one reason why the reaction to this study from Obamacare's supporters has frankly been a bit disappointing. Not because I expected them to fall on their knees and say, "Oh my God, national health care was a terrible mistake!" Even if I thought that was the obviously correct actual response, well, I've met people before, and that's not how they act.

But at this point, the only two large-scale randomized control trials that we have done on the benefits of paying for peoples' health care have both come back showing surprisingly small effects. In 2011, when the first results came out of Oregon, that was not what Obamacare's supporters were predicting. They were predicting that the second phase of the Oregon study would show large, significant effects on basic health measures like blood pressure, blood sugar, and cholesterol control. It didn't. There's really no other way to put it.

A good Bayesian--and aren't most of us are supposed to be good Bayesians these days?--should be updating in light of this new information....

I don't know what a Baynesian is but a quick click on Wikipedia gives me a quick-and-dirty half-assed definition that it's empiricism of a probabalistic sort, that is, empiricism of situations where the precise truth cannot be determined due to its complexity but where you can probabalistic determine which way the truth is leaning.

That was not, let us say, the tone of much of the commentary I read. The financial effects tended to be punched up at the top even though they are the least surprising or interesting result. Depression also ranked high. The health effects often, er, less so--unless it was to explain why actually, these are surprisingly great.

Let me offer a gloss here. I believe leftists understand that the public will not go for a simple transfer of cash from one man to another. The public does not agree, to offer a specific hypothetical, that it is moral to take $5000 from the rich man to give that $5000 to the poor man. (Actually, guestimating, perhaps $1500 goes to the poor man after the government and its bureaucrats take their skim. This is just a Wild Ass Guess but I'll continue using it.)

The left avoids activating this rejection of their schemes by not casting them as simple rob-Peter-to-pay-Paul schemes, but as schemes which go beyond simple cash transfers.

Government-provided health care, you see, is not just about defraying the costs of health care, which would be a Peter to Paul transfer, but about something more than that, about providing people "access" to an absolutely critical good without which they cannot survive, and improving their health.

The idea of a "multiplier" is probably implicit in such arguments as well: Sure, we're taking $5000 from the rich man and giving $1500 to the poor man, but that $1500 will have such an impact on his life that it's wrong to treat it as $1500; you'd have to factor in an impact multiplier of perhaps 10x to represent all the actual good that will flow from this "investment." So the $5000 taken from the rich man yields, perhaps, $15,000 in actual good received by the poor man.

Why, we're actually almost making money on this transaction! We just turned $5000 to $15,000 by government action! Whoo-hoo! As Uncle Choo-Choo, Joe "Big Caboose" Biden, might say, let's get rollin'!

But this study scotches all those arguments, dispositively. Free government-provided health care does not increase health; it merely defrays the cost of it. It really is just a straight-up Peter-to-Paul cash transfer, and while Paul does indeed feel good about that (and who doesn't like to steal, when you get right down to it?), it has no beneficial effects beyond the sheer pleasure of having what you never earned. (Money won is twice as sweet as money earned, said Paul Newman in the Color of Money.)

There is no "impact multiplier" attached to the transfer; taking $5000 from the rich man to give $1500 in benefits to the poor man simply results in the poor man having an extra $1500, the rich man being poorer by $5000, and the government richer by the $3500 Sovereign Vig.

The study, in sort, not only questions the efficacy of the program, but the morality of it, because if there is no Value Added to the taking of money from the rich man than the entire scheme is simply what it's always appeared to be: Straight-up theft.



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posted by Ace at 02:09 PM

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