an unanticipated consequence of
Jack M. Balkin
Jack Balkin: jackbalkin at yahoo.com
Bruce Ackerman bruce.ackerman at yale.edu
Ian Ayres ian.ayres at yale.edu
Mary Dudziak mary.l.dudziak at emory.edu
Joey Fishkin joey.fishkin at gmail.com
Heather Gerken heather.gerken at yale.edu
Abbe Gluck abbe.gluck at yale.edu
Mark Graber mgraber at law.umaryland.edu
Stephen Griffin sgriffin at tulane.edu
Bernard Harcourt harcourt at uchicago.edu
Scott Horton shorto at law.columbia.edu
Andrew Koppelman akoppelman at law.northwestern.edu
Marty Lederman msl46 at law.georgetown.edu
Sanford Levinson slevinson at law.utexas.edu
David Luban david.luban at gmail.com
Gerard Magliocca gmaglioc at iupui.edu
Jason Mazzone mazzonej at illinois.edu
Linda McClain lmcclain at bu.edu
John Mikhail mikhail at law.georgetown.edu
Frank Pasquale pasquale.frank at gmail.com
Nate Persily npersily at gmail.com
Michael Stokes Paulsen michaelstokespaulsen at gmail.com
Deborah Pearlstein dpearlst at princeton.edu
Rick Pildes rick.pildes at nyu.edu
Richard Primus raprimus at umich.edu
K. Sabeel Rahmansabeel.rahman at brooklaw.edu
Alice Ristroph alice.ristroph at shu.edu
Neil Siegel siegel at law.duke.edu
Brian Tamanaha btamanaha at wulaw.wustl.edu
Mark Tushnet mtushnet at law.harvard.edu
Adam Winkler winkler at ucla.edu
The Washington Post has featured two interesting pieces recently on Medicaid managed care. Christopher Weaver reported on a battle between providers and insurers in Texas. Noting that "federal health law calls for a huge expansion of the Medicaid program in 2014," Weaver shows how eager insurers are to enroll poor individuals in their plans. Each enrollee would "yield on average $7 a month profit," according to recent calculations. Cost-cutting legislators see potential fiscal gains, too, once the market starts working its magic.
There's only one problem with those projections: it turns out that "moving Medicaid recipients into managed care 'did not lead to lower Medicaid spending during the 1991 to 2003 period,'" according to a report published by the National Bureau of Economic Research this month. Sarah Kliff is surprised to find that this is "the first national look at whether Medicaid managed care has actually done a key thing that states want it to do."
I share the frustration that we don't have enough information on key policy issues. On the other hand, I can see why economists and other social scientists would be reluctant to pronounce on the efficacy of Medicaid managed care.
The NBER study suggested that Medicaid rates are often already "low enough that private insurers couldn’t negotiate a similar payment" rate. When the managed care insurers did manage to reduce overall spending, they usually did so in states with above-average compensation rates for Medicaid providers. So how would we judge an insurer which managed to reduce spending in a state with average or below average rates for providers? Probably not that highly if the strategy focused on delaying or denying access to needed care. Discussing past problems in managed care, one health law casebook notes that an "HMO was accused of putting its enrollment office on the third floor of a building without an elevator, and another tried to attract healthy elderly subscribers by holding square dances."*
There are a wide range of insurer activities that can add or reduce costs to a system. But how do we assure that we are measuring the effects of an intervention correctly? Some laudable innovations, for example, may be costly upfront, but will end up saving many times the initial spend years down the road. "Meat ax" rationing of pills or procedures may reduce spending now, but worsen health conditions that eventually become extremely expensive. And when we consider quotidian decisions about denying or approving care, value judgments become even more complex. Accurate coding of whether a certain denial of coverage was actually appropriate can be very difficult. Empirical facts can be subject to widely divergent interpretations.
This is not to say that more studies on Medicaid managed care, and other health system innovations, should not be done. (It would be interesting to add up how much study spending was commissioned by the ACA (and even Dodd-Frank), as compared with policies like ELSI (which mandated a certain percentage of grants for the Human Genome Project to study its ethical, legal, and scientific implications).) I am just flagging the difficulties in obtaining "hard," "objective" proof of the value of certain policies. There is usually plenty of room to massage the numbers.