Did RomneyCare Saves Lives?

Does health insurance save
lives, or make people healthier? The answer to this question might
seem obvious: Of course people who are insured are
healthier and likely to live longer. But the evidence has not all
been so straightforward. A 2005 study published by the National
Bureau of Economic Research
found that, in the decade following the introduction of
Medicare in 1965, the establishment of a universal health insurance
program for the elderly had “no discernable impact on their overall
mortality.” A large observational study of
more than 600,000 respondents conducted from 1986 through 2000
found that, after adjusting for demographics, health, and behavior
“the risk of subsequent mortality is no different for uninsured
respondents than for those covered by employer-sponsored group
insurance.” Last year, a rigorous, randomly controlled
experiment by a team of top-flight health researchers working
in Oregon found that there was no statistically significant
difference in measured physical health outcomes between people
awarded Medicaid coverage in a lottery and a control group of
people who were not. Initial findings from the same study also
reported no mortality effect.

In other words, it’s not at all obvious whether health insurance
makes people healthier or increases longevity. Which is why the
result of a new
study on RomneyCare, published in the Annals of
Internal Medicine, is counterintuitive. The study looks at
Massachusetts’ experience in establishing the state-based,
near-universal health insurance program in 2006. A trio of
researchers from Harvard and the Urban Institute compared
Massachusetts counties in 2007-2010 with similar control counties
in other states, and found a corresponding 2.9 percent decrease in
mortality. More specifically, they found a 4.5 reduction in
“mortality amenable to health care”—basically, deaths that we know
how to prevent using medical services—following the introduction of
the Bay State’s health reform. No similar mortality reduction was
found in the control counties.

This is a big study with a really large sample size, which means
we ought to give it more weight. It also looks at a somewhat longer
time than the Oregon experiment—four years, rather than Oregon’s
two. In other words, it’s a good solid study that you should not
dismiss.

So does this mean that RomneyCare saved lives? Well…maybe. It’s
entirely possible, and plausible. But the study can’t quite answer
that question one way or another. It’s not randomly controlled,
like the Oregon experiment was, which means it’s subject to
problems with confounding variables and selection effects. It’s a
study that does a pretty good job of proving correlation, but
doesn’t quite get us to causation.

To which a frustrated liberal health wonk might demand to know:
Well, what else could have caused the same effect? There’s a
measurable drop in mortality in the four years following the
implementation of a state-wide, near-universal health insurance
scheme, and that’s just a coincidence?

It may not be a complete coincidence; indeed, I suspect, though
I cannot prove, that if we could determine causality with anything
approaching real certainty, we’d find out that it’s not. But there
may be other, additional factors at play as well.

Massachusetts is a wealthy, highly educated state that already
had one of the highest insured rates in the nation. It’s home to a
slew of elite hospitals and health care systems. Judging by the
unemployment rate, which
topped out at 8.7 percent, the state weathered the recession a
good bit better than the United States as a whole. The authors
control for the difference in unemployment rates, of course, but
wealth, employment, and health are correlated in all sorts of
complex ways that we don’t fully understand; the recession’s
lighter toll may be expressing itself in other ways.

Massachusetts is different from other places in ways that are
obvious and ways that are not so obvious. The implementation
environment in Massachusetts, for example, was radically different
than the one Obamacare faces nationally: broad public approval,
bipartisan political support, a booming economy. Which means
that even if you assume that RomneyCare’s increase in coverage was
the sole cause of the drop in mortality, enacting a similar program
nationwide wouldn’t necessarily produce the same results.
Government-run health care pilot programs are
notoriously difficult to scale up. Just because something works in
one place, even if it works really well, does not mean it will work
as well or at all in another.

But let’s assume, for a moment, that it does. The result of a
nationwide 3 percent drop in mortality would be
about 17,000 fewer deaths per year. But as with anything,
there’s a cost. To put it another way, the study suggests that in
order to save one life each year, about 830 people would need to
enroll in health coverage. That’s an expensive proposition. As
Michael Cannon, director of health policy at the Cato Institute,

estimates in a post at Forbes, “If we assume the
per-person cost of covering those 830 adults is roughly the
per-person premium for employer-sponsored coverage in Massachusetts
in 2010 (about $5,000), then a back-of-the-envelope calculation
suggests that RomneyCare spent $4 million or more per life saved,”
perhaps more when the law’s other costs are included. It’s not
enough to simply ask whether a policy has any effect at all. It’s
also necessary to ask whether there are different, more effective
sets of policies that could be achieved for a similar price
tag. 

And as Cannon points out, his estimated cost for RomneyCare
probably doesn’t pass a basic cost-effectiveness test:

The World Health Organization considers a medical intervention
to be “not
cost-effective” if it costs more than three times a
nation’s per-capita GDP per year of life saved. This in turn
suggests that RomneyCare would have to give every person it saves
an average of nearly 30 additional
years of life to meet the World Health
Organization’s criteria for
cost-effectiveness. Given that the mortality gains were
concentrated in the 35-64 group, that seems like a stretch.

On the same note, it’s worth remembering that for the past
several years, the price tag in Massachusetts has looked
unaffordably expensive. In a 2011
review of the state’s health reform published in Health
Affairs, a team of researchers looked at the results of the
program over the same time frame measured by the new study. What
they found was more coverage, more utilization of care—and costs
that could not be supported over time. Not in Massachusetts. Not
anywhere. “The pre-2010 status quo is not a sustainable option for
Massachusetts or the nation,” the report said. Around the same
time, state health officials were also describing
the program’s costs as unsustainable, warning that, if left
unchecked, they will crowd out everything else the government needs
to do. Some reforms have been put in place by then, but even still,
cost-containment is a
challenge—in part because more coverage has led to greater
use of care.

The new Massachusetts study sheds some genuinely useful, though
not perfectly conclusive, light on the question of how health
insurance effects health. But it offers less help with the public
policy questions that come next: What should we do, and how much
will it cost? Health insurance programs like RomneyCare won’t help
anyone if their costs turn out to be unsustainable.