Oregon Medicaid Advances Despite Critical Report

Oregon Medicaid Advances Despite Critical Report

By Lou Cannon - May 29, 2013

Oregon Gov. John Kitzhaber, an apostle of preventive health care, likes to tell what he calls the “air-conditioning story.” It’s about an elderly woman living in an over-heated apartment who collapses and is rushed to a hospital emergency room, where many thousands of dollars are spent treating her.

The point of the story is that the state might have saved the money and the woman would have been spared her ordeal with a $200 air conditioner. Kitzhaber tells it with an authority unique among U.S. governors, for he earned his living for many years as an emergency room physician. Now in his third term, the Democrat has pioneered the expansion of Medicaid, the federal-state program providing health care for the poor, which in his state is known as the Oregon Health Plan.

These days, however, Kitzhaber (pictured) and other Oregon advocates of public health spending are on the defensive following a new study published in the New England Journal of Medicine that found little difference in the blood pressure or cholesterol levels of those who are covered by Medicaid and those who are not.

The study (titled “The Oregon Experiment -- Effects of Medicaid on Clinical Outcomes”) has become a favorite Internet link for conservatives opposed to the expansion of Medicaid, as provided in President Obama’s health care plan, the Affordable Care Act.

Under that law, Medicaid is being expanded to include individuals and families whose income is 138 percent above the poverty line or less. (This is $15,416 for an individual and $26,344 for a family of three.) A Supreme Court decision in 2012 upholding the overall constitutionality of the law allowed states to decline Medicaid expansion without penalty. Using this escape hatch, most states with Republican governors or GOP legislative majorities are resisting expansion.

The New England Journal of Medicine report on Medicaid in Oregon has become a significant rallying point in the national debate because it is by far the largest study of a group that mirrors the working poor who will become eligible for coverage under the ACA.

In 2008, Oregon had a small budget surplus and an urge to expand Medicaid. But without enough money to cover all the working poor, state officials decided to use a lottery. The New England Journal of Medicine study was based on data from 6,387 adults who won the lottery -- and thereby were randomly selected for Medicaid coverage -- and a group of 5,842 adults who were not selected.

Conservatives such as Oregon state Rep. Dennis Richardson interpret the study as a sign that Medicaid has failed. Kitzhaber, who says this is a misreading of the outcome, has submitted a budget to the Democratic-controlled legislature calling for expansion of Medicaid to the maximum of the federal law. This will add an estimated 200,000 people to the rolls, which currently include 670,000 Oregonians. Richardson says this will blow a $1 billion hole in the state budget by 2015.

In truth, the New England Journal study, the work of 10 physicians, offers comfort for both advocates and critics of Medicaid. It concluded that “Medicaid coverage generated no significant improvements in measured health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression and reduce financial strain.”

Health care professionals say these are hardly trivial achievements. They assume that financial strain and depression are related, since it is widely recognized that there is a relationship between economic stress and mental health. In plain language, those lucky enough to have won the lottery had a greater sense of well-being since they did not have to worry about paying medical bills while their counterparts without Medicaid struggled. Their option was to go to hospital emergency rooms in times of medical crisis.

Patty Wentz, communications director for the Oregon Health Authority, says that Medicaid works just like any other insurance, paying the bills but not necessarily improving health or health habits. That, she said, shows that more must be done, not that Medicaid has failed.

Indeed, Kitzhaber, helped by a $1.9 billion federal grant, has launched a first-in-the-nation project to improve the results for Medicaid patients, who often have a hard time navigating the complexities of the health care system and keeping track of their weight, blood sugar, and other critical health factors. The project, run by the Oregon Health Authority and known as “coordinated care,” will, among other things, make outreach workers available to help Medicaid patients make appointments, keep medications in order and prevent unnecessary repeated tests.

Oregon has five years to prove it can recoup the federal funding for the project by reducing the rate of Medicaid spending increases.

Richardson calls his state’s plan “a medical monster.” Brad Wright, an Oregon health management and policy expert, disagrees, saying Medicaid is working as intended.

“We have just to make sure that all of the other components of a high-performance health care system are in place and doing what they are supposed to,” Wright said in a recent blog post. “When that happens, the health care outcomes we seek will follow.”

The air-conditioning story that Kitzhaber tells is apocryphal. But there are real-life examples that demonstrate the potential of coordinated care.

Bart Clifford lost the use of his legs after being shot by police in a drug-related incident 25 years ago. When his shower chair broke after 18 months, his private insurer declined to replace it on grounds such chairs should last two years. Clifford continued to use the damaged chair and suffered a cut below the waist that he could not feel because of the nerve damage to his legs. He wound up in the hospital with gangrene and required multiple surgeries and skin grafts.

Clifford’s physician, Evan Saulino, tallied the medical costs of this injury at $2.1 million, which could have been prevented by the purchase of a $57 shower chair. Clifford now lives independently in a Beaverton apartment with an infant son and is enrolled in the Oregon Health Plan.

In contrast is the story of 8-year-old third-grader Malik Wilkerson of Portland, who suffers from asthma attacks that can be triggered by dust mites or chemical additives in scented soap. Asthma attacks used to send the boy to the emergency room once or twice a month, but that’s now a rare event.

A primary care team from Portland’s Northeast Health Center searched the Wilkerson home for asthma triggers, replaced some of the household cleaning agents, and provided the boy with a home nebulizer and a portable mini-inhaler to help him overcome wheezing attacks at school or on the playground.

No one denies that these government interventions succeeded. The question is whether they can be replicated on a scale that will make Oregon a medical success story instead of the poster child in the conservative battle against Medicaid expansion.

Kitzhaber, doubling down on a program he believes in, is betting that coordinated care -- and with it Medicaid -- will be a winner. 

Lou Cannon, who is traveling in Scotland, has written about the campaign for RealClearPolitics.

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