Wash. Times Hypes Study Saying Surgical Patients On Medicaid Are More Likely To Die Than The Uninsured

Wash. Times' Wolf Cites Medicaid Study To Suggest Government Health Insurance Programs Leave You Worse Off. In a June 8 column headlined, “Obamacare wrecks Medicare by design, but why?” Washington Times columnist Dr. Milton R. Wolf wrote:

Despite Democrats' breathless claims that private insurance companies are the enemy, it is our federal government that is the largest denier of medical claims in the world. And that's before the president unleashes his rationing board, the Independent Payment Advisory Board (IPAB) or so-called “death panel.” And if that wasn't enough, the Democrats have plundered $1.9 trillion from Medicare over the next decade ($8.2 trillion over 20 years) to fund Obamacare and have all but destroyed the popular Medicare Advantage program. Make no mistake: Obamacare is killing Medicare.

We have selfishly forced our children into lifelong indentured servitude to pay our debts, and for what, exactly? World-class, government-run health care? Not quite. The average U.S. life expectancy in 1965, the first year of Medicare, was 70.2 years. Forty years later, in 2005, it rose to 77.4 years, an improvement of 10 percent. Compare that to the 40 years before Medicare, from 1925 to 1965, when life expectancy improved by nearly twice that - 19 percent.

Medicaid is even worse. A recent University of Virginia study shows Medicaid surgical patients, for example, are 97 percent more likely to die than private insurance patients. And get this: They are 13 percent more likely to die than uninsured patients. This shouldn't surprise you. Health care decisions that are based on political considerations are meant to benefit politicians, not patients. President Obama's solution is to force even more people into government health care. Obamacare will increase the Medicaid rolls by 16 million poor souls. [The Washington Times, 6/8/11]

U. Va. Study: Surgical Patients On Medicaid Are 13 Percent More Likely To Die Than Patients Without Insurance. As noted by a National Review Online blog post, a 2010 study by the University of Virginia found that “surgical patients on Medicaid are 13% more likely to die than those with no insurance at all, and 97% more likely to die than those with private insurance.” [National Review Online, 7/17/10; American Surgical Association, Primary Payer Status Affects Mortality For Major Surgical Operations, 2010]

But Authors Of Study Acknowledge “Several Noteworthy Limitations” To Their Research

Study's Lead Author: “Discrepancies In Patient Outcomes As A Function Of Payer Status Are Likely Due To Subtle, Complex Interactions Between A Number Of Patient And Health System-Related Issues.” From a January 1 article in State Health Watch, a newsletter that focuses on developments in health policy at the state and county levels, regarding the University of Virginia study:

From 2003 to 2007, 893,658 major surgical operations were evaluated using the Nationwide Inpatient Sample database, including lung resection, esophagectomy, colectomy, pancreatectomy, gastrectomy, abdominal aortic aneurysm repair, hip replacement, and coronary artery bypass.

The researchers found that patients with Medicaid payer status had a higher risk of in-hospital mortality and complications. Medicaid patients accrued higher costs compared to uninsured and Medicare patients, even after accounting for patient risk factors.

“We do not believe there is a simple explanation,” says Damien J. LaPar, MD, the study's lead author and a surgery resident physician in the Division of Thoracic and Cardiovascular Surgery at the University of Virginia.

The researchers accounted for many potential factors that may impact surgical outcomes, such as patient health and co-morbid diseases, socioeconomic status and income, regional hospital differences, and race. Despite these adjustments,Medicaid patients had the highest odds of mortality among Medicaid, Medicare, private insurance, and uninsured patients.

“Discrepancies in patient outcomes as a function of payer status are likely due to subtle, complex interactions between a number of patient and health system-related issues,” says Dr. LaPar. For example, these patients may have more advanced disease when they present, may have a limited support network after surgery, and may be getting their care at different centers compared to other patients. [State Health Watch, 1/1/11, via Nexis]

Authors Acknowledge “Several Noteworthy Limitations” To The Study. From the authors' postscript of the University of Virginia study:

Another possible explanation for the differences we observed among payer groups is the possibility of incomplete risk adjustment due to the presence of comorbidities that are either partially or unaccounted for in our analyses.

[...]

Several explanations for inherent differences in payer populations have been suggested. Factors including decreased access to health care, language barriers, level of education, poor nutrition, and compromised health maintenance have all been suggested.

[...]

There are several noteworthy limitations to this study. First, inherent selection bias is associated with any retrospective study; however, the strict methodology and randomization of the NIS database reduces the likelihood of this bias. Second, NIS is a large, administrative database, and the potential for unrecognized miscoding among diagnostic and procedure codes as well as variations in the nature of coded complications must be considered. Further, we are only able to comment on short-term outcomes as data collected for NIS reflects a patient's inpatient admission. Consequently, the results reported herein may underestimate true perioperative mortality and morbidity rates that may have occurred following the patient's discharge.

[...]

For example, the proportion of Medicaid patients may be artificially inflated due to the fact that normally Uninsured patients may garner Medicaid coverage during a given hospital admission.

[...]

[I]n our data analyses and statistical adjustments there exists a potential for an unmeasured confounder. Due to the constraints of NIS data points, we are unable to include adjustments for other well-established surgical risk factors such as low preoperative albumin levels or poor nutrition status. However, upon sensitivity analyses our statistical models proved resilient to the presence of a potentially unmeasured confounder. [Primary Payer Status Affects Mortality For Major Surgical Operations, accessed 6/9/11, via National Center for Biotechnology Information]

Experts Say Study Didn't Take Into Account Significant Reasons For Discrepancies In Patient Outcomes

Urban Institute Health Economist: “The Study Does Not Take Into Account The Possibly Confounding Factors That Are Likely Linked To Medicaid Enrollment.” From the January 1 article in State Health Watch:

“Given that Medicaid enrollees have a number of characteristics that put them at a higher mortality risk, it is not surprising that they experience higher mortality rates, even after adjusting for the comorbidity measures that are available on the hospital discharge abstract,” says Genevieve M. Kenney, PhD, a senior fellow and health economist at The Urban Institute in Washington, DC.

However, Dr. Kenney notes that the study does not include a full set of controls for socioeconomic status and related health risks. “Therefore, the study does not take into account the possibly confounding factors that are likely linked to Medicaid enrollment,” says Dr. Kenney.

Dr. Kenney points to greater poverty rates among Medicaid enrollees and their much higher rates of mental and physical health problems as likely contributors to their higher mortality rates.

“In addition, relative to Medicare and private-pay patients, Medicaid patients may be receiving care from different hospitals and/or surgeons, or may be receiving a different mix of services and procedures,” says Dr. Kenney. [State Health Watch, 1/1/11, via Nexis]

Principle Of Health Management Associates: “Medicaid Is Coverage That People Characteristically Go On And Off Of. So, The People In Medicaid Were Likely To Have Not Been Covered For A Long Time And Have Underlying Illnesses.” From the January 1 article in State Health Watch:

Terry Conway, MD, a Chicago-based principle of Health Management Associates and former chief operating officer of the Ambulatory and Community Health Network at Cook County Bureau of Health Services in Chicago, notes that the compared outcomes in this study were for serious surgeries that are likely to be done to non-pregnant adults, which is not the major population that is in Medicaid. Also, people with serious illnesses often go onto Medicaid because of their condition, which is not the case with Medicare and commercial insurance.

“There are significant differences there. Medicaid is coverage that people characteristically go on and off of,” says Dr. Conway. “So, the people in Medicaid were likely to have not been covered for a long time and have underlying illnesses. That was controlled for, but what wasn't controlled for is how well they were cared for in the past. So, these differences could be due to how well this population was treated.”

Another possibility is that the providers or hospitals that did the surgery were not high quality or lacked the resources of facilities that see primarily Medicare and commercial insurers, Conway says. [State Health Watch, 1/1/11, via Nexis]

Lead Research Scientist At GWU's Health Policy Department: Medicaid Enrollees “May Have Had Less Preventive Care Coverage Than Someone Who Had Medicare Or Private Insurance Coverage Prior To The Hospitalization” Because They Gain Eligibility Retroactively. From the January 1 article in State Health Watch:

Patricia MacTaggart, a lead research scientist and lecturer in the Health Policy Department at George Washington University in Washington, DC, says that in general, the study authors address variables that are consistent with other studies, such as volume being an indicator of quality.

“The study discussion also acknowledges identified limitations that are critical for analysis,” notes Ms. MacTaggart. For instance, many elderly and disabled Medicaid are “dually eligible” for Medicare and Medicaid, and these were counted in only one payer source in the study.

The study also acknowledges that the data source accuracy is limited by the fact that many Medicaid enrollees gain their eligibility retroactively as a result of their hospitalization. “Thus, Medicaid individuals may not be tracked in the correct category,” says Ms. MacTaggart. “More importantly, they may have had less preventive care coverage than someone who had Medicare or private insurance coverage prior to the hospitalization.”

Most states have been analyzing high-cost, high-utilization inpatient services based on their Medicaid data for some time, says Ms. MacTaggart. “What is added in this study is the comparison data from other payers,” she says.

Various states utilize Medicare Hospital Compare, The Leapfrog Hospital Survey, Healthcare Cost and Utilization Project, and the Healthcare Effectiveness Data and Information Set measurement data to do similar analyses and comparisons for the hospitals in their states in order to make decisions regarding coverage and payment.

“While inpatient hospital coverage has a significant immediate cost impact on Medicaid, outcomes of inpatient hospital stays have an even more substantial impact on Medicaid costs long term,” adds Ms. MacTaggart. [State Health Watch, 1/1/11, via Nexis]

Department Of Veterans Affairs Health Economist: Study's Researchers Controlled Only For “Observable” Factors In Patients' Medical Records. In a March 2 post on the health care blog The Incidental Economist, Austin Frakt, a health economist at the U.S. Department of Veterans Affairs and an assistant professor at Boston University's School of Public Health, wrote:

The point I want to drive home in this post is why an IV approach is necessary in studying Medicaid outcomes. People enrolling in Medicaid differ from those who don't. They differ for reasons we can observe and for those we can't. An ideal study would be a randomized controlled trial (RTC) that randomizes people into Medicaid and uninsured status. Thats neither practical nor ethical. So we're stuck, unless we can be more clever.

The next best thing we can do is look for natural experiments. That's what IV exploits. In this case, the studies I examined use the state-level variation in Medicaid eligibility (and related programs). That variation obviously affects enrollment into Medicaid (you can't enroll unless you're eligible), though it is not determinative. Importantly, state-level variation in Medicaid eligibility rules does not itself affect individual-level health. Other than figuratively, do you suddenly take ill when a law is passed or a regulation is changed? Do you see how Medicaid eligibility rules are somewhat like the randomization that governs an RTC, affecting “treatment” (Medicaid enrollment) but not outcomes directly? (If this is unclear, go here.)

Note that IV studies can, and should in some cases, control for observable factors. (The studies I reviewed use quite sophisticated controls, including fixed effects and interactions, that greatly reduce the ambitiousness of the assumptions required to obtain causal estimates. In contrast, assumptions for inference of causality in the studies Avik prefers are far greater.) But controlling for observable factors alone is insufficient. That brings me to a study that Avik has cited many times as evidence that Medicaid produces worse health than no insurance at all. Tyler Cowen referenced the same study in his book, about which I wrote earlier. It's the UVa surgical outcomes study, formerly known as: Primary Payer Status Affects Mortality for Major Surgical Operations, by LaPar and colleagues.

Avik has summarized this study, so I'll skip that. It examines 11 surgical outcomes by insurance status, adjusting for many observable factors, but, crucially, with no controls for unobservable factors that affect selection. All adjusted outcomes for Medicaid enrollees are worse than for the uninsured. With only one exception, adjusted outcomes for Medicare beneficiaries are worse than for the uninsured too. Got that? Not just Medicaid enrollees, but Medicare beneficiaries too, fare worse than the uninsured. Any theory to explain what's going on in Medicaid had better explain Medicare too. It cannot be just that Medicaid enrollees see lower quality providers.

You know what theory is consistent with these results? It's a pretty famous one? I just described it above: selection (or omitted variable) bias. It is well known that studies that do not exploit purposeful (i.e., an RTC) or natural (i.e., natural experiment or instrumental variables) randomness can suffer from selection bias. Even controlling for observable characteristics is not enough in the field of health care. This is well known. I've explained it before, even in a diagram. [The Incidental Economist, 3/2/11]

Faculty Chair Of The University Of Chicago's Center For Health Administration Studies: Study Ignored Key “Unobserv[able]” Factors, Including The Fact That “Medicaid Patients Likely Face Greater Economic, Family, And Educational Obstacles.” In a March 3 post on The Century Foundation's Taking Note blog, Harold Pollack, the Helen Ross Professor at the University of Chicago's School of Social Service Administration and faculty chair of the Center for Health Administration Studies (CHAS), wrote:

Roy calls this a landmark study, suggesting that is shows that people fare worse on Medicaid than they can by going uninsured and getting what people can on their own. In fairness, the study is titled “Primary payer status affects mortality for major surgical operations.” That title should not have passed peer review.

This is a valuable descriptive study which demonstrates that adjusted mortality is high among Medicaid surgical patients, even after one sensibly corrects for the kinds of potential confounders readily available in large-scale clinical databases. Indeed Medicaid patients have higher adjusted mortality than the uninsured. (The authors' reported statistical findings compare Medicare, Medicaid, and uninsured patients to the privately-insured rather than each other. The authors don't seem to report the statistical significance of the rather modest differences between Medicaid patients and the uninsured.)

As Austin notes, Medicare patients also fare worse than the uninsured on many outcomes. This pattern -- and others reported in the paper -- suggests that we are seeing straightforward selection bias. Medicaid patients face more difficult personal risk-factors and circumstances that lead to worse outcomes. The original paper even includes a postscript in which experts identify many ways in which such selection biases could arise.

In this study sample, Medicaid patients receive more costly care and had longer lengths of stay, which is consistent with some selection bias account. Some patients are enrolled into Medicaid during their hospital stay. Hospital staff and social service agencies may have greater motivation to pursue such processes when patients are especially sick or needy. Medicaid patients likely face greater economic, family, and educational obstacles. They use different hospitals and live in different communities. Some receive Medicaid because they have specific disabilities. Privately insured patients with minor issues may have better access to surgery. Some of these factors can be controlled in the statistical analysis. Others are unobserved. (See Austin for more on why this is an inherently dicey study design to test the causal impact of insurance coverage.) [The Century Foundation, Taking Note, 3/3/11]

Health Economist: Studies Show “Medicaid Improves Health”

Department Of Veterans Affairs Health Economist: “No Credible Evidence That Medicaid Results In Worse Or Equivalent Health Outcomes As Being Uninsured.” In a blog post summing up his review of studies that “met [his] criteria for sound methodology for estimating the causal effect of Medicaid coverage on health outcomes,” Frakt concluded:

My take-away from the Medicaid-IV literature review is: there is no credible evidence that Medicaid results in worse or equivalent health outcomes as being uninsured. That is Medicaid improves health. It certainly doesn't improve health as much as private insurance, but the credible evidence to date -- that using sound techniques that can control for the self-selection into the program -- strongly suggests Medicaid is better for health than no insurance at all.

There are observational studies that purport to reveal otherwise, that Medicaid coverage is worse or no better than being uninsured. One cannot draw such conclusions from such studies if they do not control for the unobservable factors that drive Medicaid enrollment. Causal inference requires appropriate techniques. Even a regression with lots of controls, even propensity score analysis, is insufficient in this area of study.

Finally, none of this means Medicaid is a program without flaws. It is badly in need of reform. It should be federalized or otherwise protected from state-level fiscal woes. Physicians and hospitals treating Medicaid patients should be reimbursed at rates closer to those of Medicare or private insurance. (That might mean lowering the latter, not only increasing the former.) So long as they're evidence-based, I'm not opposed to adjustments in the design of Medicaid to increase the value of care delivered to the population that relies on it.

However, what we should not do is fool ourselves into thinking Medicaid is not capable of improving health. Based on high-quality evidence to date, it is and it has. [The Incidental Economist, 10/14/10]

• Frakt Stands By Conclusion In Light Of U. Va. Study. Responding to commentary about the University of Virginia study, Frakt stated: “Bottom line: once again, we find that Medicaid is shown not to be bad for health, but only if proper econometric techniques are employed.” [The Incidental Economist, 3/2/11]