Dozens of Studies Demonstrate Failure of Medicaid

In America’s endless health-care debate, Medicaid serves as a Rorschach Test for the Left and Right. Critics of government intervention in medical care such as Avik Roy, president of Foundation for Research on Equal Opportunity, contend that America’s “low cost” insurer fails patients at astronomical costs. Allowing Medicaid to continue to expand as-is just doubles-down the federal government’s role in a colossal blunder.

To supporters of the Affordable Care Act, Medicaid serves as an effective insurer for poor and near-poor Americans, shielding them from the medical misfortunes of life. Supposedly, they’ve got the data on their side. Headlines proclaim that, “Medicaid is an effective, efficient program.” But at an annual price tag of nearly $600 billion and burdened with a scourge of improper payments, little evidence suggests that the program improves actual access to care or health outcomes.

What does it mean for Medicaid  — or any other insurance regimen — to “work”? One easy metric is insured status, but this seems like a cop-out. In other developed countries, individuals insured on paper routinely fail to get the care they need and succumb to preventable, treatable illnesses. A better measure of success is whether uninsured individuals have an easier time getting much-needed treatments and see improved health outcomes as the result of being on Medicaid. On these questions, supporters and opponents of the current Medicaid structure frequently trot out studies affirming their pet theories about the program. This tendency is all-too-common in public policy, with dueling studies the norm on minimum wage, trade policies, and welfare spending.

For this reason, meta-analyses analyzing dozens of studies at a time are useful for solving some of the pressing public policy questions vexing lawmakers. In June, Health Affairs published such a study analyzing 77 studies on Medicaid’s effectiveness. The incorporated studies asked more than 400 questions on the impact of state-level Medicaid expansions on various outcome measures, ranging from access to treatments to insurance status to hospital financial performance.

Unsurprisingly, these wide-ranging studies often have conflicting results on virtually every question. But broad trends can be ascertained. For example, more than 70 percent of the studies find either no effect or negative effect on outcomes deemed “consistent with the goals of the Affordable Care Act.” Strangely, though, the minority of studies that find positive Medicaid outcomes tend to ask more questions and attempt to measure more outcomes at once. Does this imply that the roughly 30 percent of studies validating Medicaid are more thorough than the others?

Not by a long shot. To see why, it’s important to examine the studies by the specific outcomes being measured. When the outcome of interest is “insurance coverage,” nearly three-quarters of studies find that Medicaid worked as advertised. But again, few would dispute that the government is capable of getting individuals insured on paper. Only 40 percent of analyses found that health status and quality of care improved as the result of greater spending. Health Affairs found the same 40 percent of studies showed a boost to appointment availability and wait times. In addition, 56 percent of research found no improvement in the financial performance of hospitals, despite claims that Medicaid would reduce the uninsured populations’ reliance on emergency rooms. Despite these sobering findings, media outlets have painted the meta-analysis as a validation of Medicaid’s effectiveness as an insurer. Study contributor Aaron Carroll wrote in the New York Times that “60 percent” of distinct analyses “found a significant effect of the Medicaid expansion that was consistent with the goals of the Affordable Care Act.” This top-line finding is skewed by the “insurance coverage” measurements, which show the most favorable result for Medicaid of all the outcomes measured.

Just as dueling studies paint a complicated portrait of Medicaid, other meta-analyses will inevitably throw a wrench into the picture. But, the most thorough compilation to date shows that most reputable research fails to repudiate Medicaid. As the Taxpayers Protection Alliance has previously pointed out, this may be because of the types of physicians and practices that accept the low reimbursement rates offered by Medicaid. But this is far from conclusive; more research is needed to determine why Medicaid just doesn’t deliver the goods.

Before getting to the root of the problem, however, defenders of the status quo need to acknowledge Medicaid’s gargantuan shortcomings. Until then, $600 billion a year in taxpayer money will go down the hole without bettering the lives of millions of patients.

Ross Marchand is the director of policy for the Taxpayers Protection Alliance.