Providence, Harvard and MIT Researchers Find Medicaid Improves Health, Decreases Financial Strain

July 07, 2011

PORTLAND, Ore. – Providence researchers have taken part in a new study that finds improving low-income adults access to Medicaid reduces their financial strain and improves their sense of health and well-being. The Oregon Health Study, conducted by researchers from Providence Health & Services, Harvard School of Public Health, Massachusetts Institute of Technology and the National Bureau of Economic Research also found that expanded access to Medicaid increases the use of health care services.

This is the first study to evaluate the impact of insuring the uninsured in the U.S. using a randomized controlled trial, which is the gold standard in medical and scientific studies.

“The recent health reform law makes a huge investment in public health insurance, including major expansions in coverage for the poor and vulnerable,” said Bill Wright, Ph.D., Providence Center for Outcomes Research and Education senior research scientist and study author. “The Oregon Health Study provides policymakers with the best scientific evidence to date on the costs and benefits of those upcoming expansions.”

This unique study was done with the cooperation of the State of Oregon. In 2008, Oregon held a lottery to accept additional low-income, uninsured residents into its Medicaid program; about 90,000 applied for the 10,000 available openings. The researchers collected data on the lottery participants from many sources – including hospital records and mail surveys – and compared outcomes between those randomly selected by the lottery and those not selected in order to determine the impact of Medicaid.

Medicaid, which is jointly funded by the federal and state governments, covers the health care costs of eligible low-income individuals and families. The 2010 Affordable Care Act expands Medicaid to cover additional low income adults in all states in 2014.

“This is the first study in which access to health insurance was the only thing that differentiated one group from the other,” said Heidi Allen, Ph.D., Providence Center for Outcomes Research & Education research scientist and study author. “Individuals who had access to the Oregon Health Plan fared better than those who did not in ways that really matter.  If the question is whether having health insurance is important, the answer is definitively yes.”

Based on the first year of this ongoing study, some of the key findings show that Medicaid coverage:

  • Increases the likelihood of using outpatient care by 35 percent, using prescription drugs by 15 percent, and being admitted to the hospital by 30 percent, but does not seem to have an effect on use of emergency departments.
  • Increases the use of recommended preventive care such as mammograms by 60 percent and cholesterol monitoring by 20 percent.
  • Increases the probability individuals report having a regular office or clinic for their primary care by 70 percent and the likelihood they report having a particular doctor that they usually see by 55 percent.
  • Decreases the probability of having to borrow money or skip paying other bills to pay for health care by 40 percent, and decreases the probability of having an unpaid medical bill sent to a collection agency by 25 percent. Declines in unpaid medical bills also benefit health care providers, since the vast majority of such debts are never paid.
  • Increases the probability that people report themselves in good to excellent health by 25 percent and increases the probability of not being depressed by 10 percent.

This is an unprecedented study for Providence’s Center for Outcomes Research and Education. CORE staff members have fielded several waves of mail surveys to approximately 70,000 people. They opened three clinics and completed more than 13,000 in-person health screenings. CORE staff members continue conducting interviews with hundreds of participants to help capture the stories behind the statistics.

Support for the study was provided by the National Institute on Aging, Office of the Assistant Secretary for Planning and Evaluation in the Department of Health and Human Services, California HealthCare Foundation, Centers for Medicare & Medicaid Services, MacArthur Foundation, Robert Wood Johnson Foundation, Sloan Foundation, Smith Richardson Foundation, and U.S. Social Security Administration.

The full study, released as working paper 17190, can be found at www.nber.org.