Study Finds Medicaid Expansion Reduces Healthcare Debt but Fails to Improve Health

For revenue cycle professionals a study of Medicaid expansion coming out of Oregon is good news: lower-income Americans who suddenly fall under Medicaid’s umbrella pay their medical bills. Or better, the government pays their respective bills for them.

The downside to Medicaid expansion is that providing healthcare for low-income Americans does little if nothing to improve their physical health, the researchers found.

“The Oregon Experiment — Effects of Medicaid on Clinical Outcomes,” published in the latest number of the New England Journal of Medicine, is a study of a one-of-a-kind expansion of Medicaid by the Oregon Health Study Group. In 2008 Oregon held a lottery offering to expand Medicaid to almost 10,000 state residents, provided they met income, health insurance, and employment criteria. The Oregon Health Study Group then compared a sample of lottery winners with those from the same demographic who did not win.

In July 2011 the group released its preliminary results, which at least from a revenue cycle perspective were encouraging. “We find that in this first year, the treatment group had substantively and statistically significantly higher health care utilization (including primary and preventive care as well as hospitalizations), lower out-of-pocket medical expenditures and medical debt (including fewer bills sent to collection),” the researchers wrote.

There were early indications that health improved as well as the researchers found “better self-reported physical and mental health than the control group.”

Later study of the data did not support that self-reported results, at least as far as physical health. “We found no significant effect of Medicaid coverage on the prevalence or diagnosis of hypertension or high cholesterol levels or on the use of medication for these conditions,” the researchers wrote in the abstract to the New England Journal of Medicine article. “Medicaid coverage significantly increased the probability of a diagnosis of diabetes and the use of diabetes medication, but we observed no significant effect on average glycated hemoglobin levels or on the percentage of participants with levels of 6.5% or higher.”

Expanding Medicaid failed to improve several markers of good health, it did encourage greater use of providers by the population while at the same time decreased the amount of medical debt, the researchers found.