Monday, October 28, 2013

Tag Team (Back Again)

By Robert H.

Having followed and enjoyed Charlie's recent discussions about the Oregon Medicaid study, I think Anon Ymous is suffering from a basic misunderstanding.  To clarify: "more significantly significant" does not mean "better policy outcome."

Imagine getting on medicaid automatically turned your hair green.  The Oregon Medicaid study would have found that 1. There was extremely robust evidence that getting on medicaid turned people's hair green 2. There was statistically significant evidence that getting on medicaid improved mental health for some folks 3. There was inconclusive evidence about how medicaid effected physical health.  For example, Charlie interprets the study to provide evidence that medicaid could lower the number of people with high blood pressure by 7% or raise it 5%.

So let's say the actual numbers in the population were (and these are very made up): 1. Turns hair green 100% of the time.  2.  Reduces number of depressed people, who make up a third of the population, by 20 percent  3. Reduces number of people with high blood pressure, who make up a fifth of the population, by 7 percent.  Which of these, from a policy perspective, is the best and most desirable result of medicaid?

It's impossible to tell from that information, because, "statistically significant" or "big effect on the population" does not equal "good."  For example, in any sample of that population the most statistically significant result is going to be that medicaid turns your hair green.  But it isn't actually very useful or pleasurable to have green hair.  Green hair is the most statistically robust but the least useful correlation.  Just so, studies in that world would probably find that medicaid has more robust and observable effects when it came to reducing depression than high blood pressure.  But that doesn't mean reducing depression is the best result from a policy perspective: it could be the case that a relatively small reduction in high blood pressure has net better effects than a larger reduction in depression.  Or not.  Figuring out the answer is an empirical and philosophical question (how do you weigh extending lives versus improving lives?).  You've got to dig down in the trenches and do tough, expert-level cost benefit analysis to make a conclusion.

That's why "medicaid has no health effects" would be such a good result for people who want to fund it less.  If you are spending money to get *nothing* then that is clearly a waste.  But if you are spending money to get 7 or 3 or 4 or 5 percent reductions in diseases with high morbidity, suddenly we've got to have a tough cost/benfit argument.

The only other thing I'd add is that even if the physical health effects of medicaid are less important in and of themselves, that doesn't mean they are separable from the mental health effects.  Once you acknowledge there are real health benefits to medicaid coverage, it becomes possible that those real benefits are causing the improved mental health.  Maybe I will put myself through a whole lot for a pill that can reduce my chance of dying young by 1 percent, and maybe just handing me that pill will improve my mental health a whole lot versus a situation where I have to blow my life's savings to get it.   If a lot of people thought like that, the mental health effects of getting the pill would apply to more people than the health effects, would be more robust in any survey, but would still be totally inseparable from the health effects.  Just giving me a placebo wouldn't work: I don't want a pill to make my worries go away, I want that pill that has that result.


  1. Here:

  2. I'm having trouble posting on your blog's comments, so I'll say here that 1. Eyeball it all you want, but the math is clear that Medicaid could have positive health effects this study would not have picked up with 95 percent confidence. If you can walk me through better math or a better statistical method then I will change my mind. 2. Prior to this study I would have expected Medicaid to reduce employment rates, and I'm guessing Charlie would to. 3. Neither Charlie nor I are arguing for Medicaid, we are arguing that the health effects of Medicaid are unknown and that that makes it very hard to know if Medicaid is worth it. Personally, I generally favor subsidizing low income families with cash transfers vs services, so I could probably be talked into scraping Medicaid and replacing it with cash transfers.