What we miss when we look only at the cost of healthcare coverage

With the Republicans on the verge of dismantling the Affordable Care Act and Medicaid, much of their focus has been on how much healthcare insurance “costs”. I thought it would be timely to revisit a 2015 analysis in the American Journal of Public Health, “Considering Whether Medicaid is Worth the Cost: Revisiting the Oregon Health Study.” (full text) The investigators performed a cost-effectiveness analysis using data from the Oregon Health Study (OHS), the experiment that began in 2008 when the state randomly selected uninsured participants to apply for Medicaid coverage creating a randomized controlled trial of a social policy. They concluded that Medicaid is in fact a cost-effective program.

The authors’ cost-effectiveness analysis found that the observed benefit of providing Medicaid was $62,000 per quality-adjusted life-year (QALY) gained. As a reference point, placing smoke detectors in homes provides a benefit of $210,000 per QALY.

The study reminds us that health benefits are best understood broadly and over the long term, rather than through a narrow focus on one year’s “cost” in the cost-effectiveness balance.

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