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Is Medicaid Coverage as Good as Private Insurance or No Better

than Being Uninsured?

Jack Hadley, Ph.D.(George Mason University)

AcademyHealth Annual Research Meeting, June 4, 2007

Research supported by the Kaiser Family Foundation

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Study Objective

• Compare Medicaid beneficiaries to both privately insured and uninsured people– Medical care use and spending– Short-term change in health

• Draw inferences about relative efficiency of Medicaid coverage

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Major Methodological Issue:The Identification/Endogeneity

Problem

• People are not randomly assigned to different insurance states

• Unobserved differences in characteristics and/or health may explain both insurance status and use/outcomes

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For Example

• Many people have Medicaid because of poor health: explains higher use and worse outcomes

• Medicaid beneficiaries typically have the lowest incomes, least education, and very weak family/community supports—Are study results due to Medicaid coverage or the characteristics of Medicaid beneficiaries?

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Research Design

• Use longitudinal data; measure change in health

• Focus on exogenous adverse health events: accidents and new chronic conditions

• Measure insurance status prior to adverse health shock in order to establish exogeneity

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Data: MEPS-HC

• Pooled data from 1999 – 2004• Two-year rotating panels w/ 5 interviews• New health conditions after baseline trigger

special module of questions, including date of accident or when new condition first noticed/diagnosed, if– caused by an accident or– condition on HHS “priority” list

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Sample

• 12,787 accidents and 8,963 new chronic conditions among non-elderly– Medicaid about 10% of each sample– Uninsured 13% (accidents) and 16% (new

chronic)

• Constant insurance status 2 months before, month of, and month after adverse health event

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Multivariate Regression: Dependent Variables

Medical Care Use– Received any care at all– Categorical quantities of specific types of care

(inpatient, outpatient, office-based, ER, RX)– Total charges and spending for care associated with

condition

Short-Term Change in Health– Change in health status from round before to round

after health shock (e.g., excellent to poor)– Fully recovered from accident

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Multivariate Regression:Control Variables

• Dummy variables for specific conditions, overall severity (self-rated), and accident type and location

• Baseline health and sociodemographic characteristics (from interview before event)

• Dummy variables for census region, metro status, year, month of event, survey round; time between event and follow-up interview

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Results: Service Use and Spending

• Service Use – Medicaid use greater than uninsured and similar to privately insured

• Spending – Medicaid spending is greater than uninsured and similar (new chronic) or slightly lower (accidents) than privately insured

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Results: Short-Term Change in Health

Accidents– Medicaid beneficiaries do better than uninsured and

similar to privately insured in terms of full recovery– But change in health status same as uninsured, and both

worse than privately insured

New Chronic Conditions– 1st post-event round: Medicaid change in health similar

to privately insured, and both better than uninsured– 2nd post-event round: Medicaid change in health moves

closer to uninsured

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Conclusions: Clear-Cut

• Uninsured receive less care and have worse outcomes than privately insured

• Care received by Medicaid recipients is not more costly than care received by privately insured

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Conclusions: Not So Clear

• If Medicaid health outcomes not significantly better than uninsured’s– May be indicative of lower quality care in

Medicaid compared to private insurance– Methodology may still not be able to control

for effects of • unobserved differences between Medicaid

beneficiaries and privately insured• unobserved Medicaid program differences

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Sidebar: Medicaid Managed Care vs. Medicaid FFS

• Supplementary analysis divides Medicaid beneficiaries into managed care (MMC) and FFS into populations

• General Results– Service use and spending higher in FFS population

– Similar changes in short-term health measures

• Implies MMC more efficient than FFS: same change in health for lower cost

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Sidebar: Emergency Dept. Use

Accidents– No difference in ED use by uninsured,

Medicaid, and privately insured

New Chronic Conditions– Significantly higher use by uninsured– Medicaid and privately insured have similar ED

use

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Appendix: Service Use(odds ratios from ordered and binomial logistic regressions,

relative to privately insured)

Accidents New Chronic Condition

Medicaid Uninsured Medicaid Uninsured

Received Any Care 1.16 0.45a 1.92a 0.52a

ED Visits 1.15 0.99 0.88 1.45a

Outpatient Visits 0.87 0.63a 1.18 0.68a

Office Visits 0.89 0.59a 1.04 0.77a

Prescription Drugs 1.13 0.65a 1.13 0.76a

a. Significantly different from privately insured, p<=.01

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Appendix: Spending(percentage difference from log-linear regressions,

relative to privately insured)

Accidents New Chronic Condition

Medicaid Uninsured Medicaid Uninsured

All Cases

Total Charges 0.04 -0.79a 0.23 -0.33b

Total Payments -0.11 -1.33a 0.07 -0.70a

Cases w/ Positive Charges

Total Charges 0.02 0.01 0.07 -0.23a

Total Payments -0.18b -0.93a -0.13 -0.78a

a. Significantly different from privately insured, p<=.01

b. Significantly different from privately insured, 0.1<p<=.05

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Appendix: Short-Term Change in Health(odds ratios from logistic regressions, relative to privately insured)

Medicaid Uninsured

Accidents

Not Fully Recovered 1.03 1.70a

Decline in Health Status 1.26a 1.22a

New Chronic Conditions

Decline in Health Status 1.10 1.37a

a. Significantly different from privately insured, p<=.01

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Appendix: Medicaid Managed Care vs Medicaid Fee-for-Service

Accidents New Chronic Condition

Medicaid Managed

Care

Medicaid FFS

Medicaid Managed

Care

Medicaid FFS

Percentage Difference in Spending (relative to private insurance)

-0.22c -0.002 -0.18 0.32c

Short-Term Decrease in Self-Reported Health Status (odds ratio relative to private insurance)

1.29b 1.22c 1.04 1.17