Cato At Liberty

Today, the nation’s top health economists released a study that throws a huge “STOP” sign in front of ObamaCare’s Medicaid expansion.

The Oregon Health Insurance Experiment, or OHIE, may be the most important study ever conducted on health insurance. Oregon officials randomly assigned thousands of low-income Medicaid applicants – basically, the most vulnerable portion of the group that would receive coverage under ObamaCare’s Medicaid expansion – either to receive Medicaid coverage, or nothing. Health economists then compared the people who got Medicaid to the people who didn’t. The OHIE is the only randomized, controlled study ever conducted on the effects of having health insurance versus no health insurance. Randomized, controlled studies are the gold standard of such research.

Consistent with lackluster results from the first year, the OHIE’s second-year results found no evidence that Medicaid improves the physical health of enrollees. There were some modest improvements in depression and financial strain–but it is likely those gains could be achieved at a much lower cost than through an extremely expensive program like Medicaid. Here are the study’s results and conclusions:

We found no significant effect of Medicaid coverage on the prevalence or diagnosis of hypertension or high cholesterol levels or on the use of medication for these conditions. Medicaid coverage significantly increased the probability of a diagnosis of diabetes and the use of diabetes medication, but we observed no significant effect on average glycated hemoglobin levels or on the percentage of participants with levels of 6.5% or higher. Medicaid coverage decreased the probability of a positive screening for depression [by 30 percent], increased the use of many preventive services, and nearly eliminated catastrophic out-of-pocket medical expenditures…

This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical 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.

As one of the study’s authors explained to me, it did not find any effect on mortality because the sample size is too small. Mortality rates among the targeted population – able-bodied adults 19-64 below 100 percent of poverty who aren’t already eligible for government health insurance programs – are already very low. So even if expanding Medicaid reduces mortality among this group, and there is ample room for doubt, the effect would be so small that this study would be unable to detect it. That too is reason not to implement the Medicaid expansion. This is not a population that is going to start dying in droves if states decline to participate.

There is no way to spin these results as anything but a rebuke to those who are pushing states to expand Medicaid. The Obama administration has been trying to convince states to throw more than a trillion additional taxpayer dollars at Medicaid by participating in the expansion, when the best-designed research available cannot find any evidence that it improves the physical health of enrollees. The OHIE even studied the most vulnerable part of the Medicaid-expansion population – those below 100 percent of the federal poverty level – yet still found no improvements in physical health.

If Medicaid partisans are still determined to do something, the only responsible route is to launch similar experiments in other states, with an even larger sample size, to determine if there is anything the OHIE might have missed. Or they could design smaller, lower-cost, more targeted efforts to reduce depression and financial strain among the poor. (I propose deregulating health care.) This study shows there is absolutely no warrant to expand Medicaid at all.

Too much privacy advocacy is done by a self-appointed expert class who, believing their own preferences to be universal, beseech legislators and regulators to mold or even remake the information economy. I have nothing against self-appointed experts—I am one, and some of you have been falling for my schtick for a decade. But the hubris of claiming to know how things should come out? That’s too much.

So the Electronic Frontier Foundation’s “Who Has Your Back?” report is real stand-out. Using a clear, six-star grid, they assess how well major Internet companies and ISPs do when it comes to key dimensions of privacy protection.

This puts you, the consumer, in a position to choose with whom you want to do business. As importantly, it puts business decision-makers on notice: If they don’t satisfy actual consumer demand for privacy, they are more likely than before to lose money.

If consumers care about privacy, they will act on what’s in this report—and specifically on the dimensions of privacy protection that matter to them. If they don’t, they won’t, because they prioritize other things, and businesses can do the same. It’s an elegant system—a market-based system—for discovering and delivering what consumers want.

The alternative is a foggy war (politics being war by other means) in which the “consumer advocate” and “industry” use every artifice to persuade various authorities whether or not, and how, to intervene. The actual desire of the consumer is an afterthought in this regulatory battle.

So, Who Has Your Back?

The report is worth checking out. You might learn that a provider you trust is not so trustworthy. You might learn of services that you should try because they are good actors. You might disagree with the methodology, and that’s fine, too. The responses of businesses and consumers to this report will be far more finely tuned to actual consumer demand for privacy than the gaudy privacy show that runs ‘round the clock these days in Washington, D.C., state capitols, and Brussels.

Congratulations and thanks to the Electronic Frontier Foundation for some good, market-based privacy advocacy!

One of the realizations that helped me to dispense of the neoconish foreign policy views of my youth is that for federal policymakers, the Pentagon is like a giant jobs program. Regardless of need, a military installation or armament factory can generally count on the unwavering support of the member of Congress who represents the district or state where the facility is located. 

On Monday, the Associated Press’s Richard Lardner provided a textbook example: over the past two years Congress has spent almost a half billion taxpayer dollars—and wants to spend another $436 million—upgrading Abrams tanks that experts and the Army itself say aren’t needed.

Who are some of the biggest congressional backers of the tank upgrading? Why, Republican “deficit hawks”! 

Keeping the Abrams production line rolling protects businesses and good paying jobs in congressional districts where the tank’s many suppliers are located. 

If there’s a home of the Abrams, it’s politically important Ohio. The nation’s only tank plant is in Lima. So it’s no coincidence that the champions for more tanks are Rep. Jim Jordan and Sen. Rob Portman, two of Capitol’s Hill most prominent deficit hawks, as well as Democratic Sen. Sherrod Brown. They said their support is rooted in protecting national security, not in pork-barrel politics. 

“The one area where we are supposed to spend taxpayer money is in defense of the country,” said Jordan, whose district in the northwest part of the state includes the tank plant.

Ah, yes, the “national security” excuse—probably the most cited justification by politicians to spend other people’s money since the ink dried on the Constitution.        

Read the rest of this post »