Wonkbook: Everything you need to know about the Oregon Health Study

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Thursday, May 2, 2013

Welcome to Wonkbook, Ezra Klein and Evan Soltas’s morning policy news primer. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.

Wondering why everyone seems to be talking about some health-care study out of Oregon? Here’s why: The Oregon Medicaid experiment is a unicorn. A beautiful, rare unicorn. But it shouldn’t be.

The study gets so much attention because it’s the gold-standard of experimental design: A randomized-controlled trial. In this case, that means the people who got Medicaid were chosen randomly. The people who didn’t get Medicaid were chosen randomly. And so researchers can be pretty sure that the differences between the two groups actually speak to the effect of Medicaid.

This isn’t just the first randomized trial testing the effects of Medicaid against being uninsured. It’s the first randomized-controlled trial testing any kind of health insurance against being uninsured — period.

The Oregon experiment is a sad accident. It was possible because Oregon sharply cut its Medicaid program and then found it had the money for 10,000 more people than it thought. The only problem was 90,000 qualified and wanted to sign up. So the state held a lottery. That lottery is the basis for the experiment.

We shouldn’t be reliant on sad accidents in Oregon for good information about public policy. If we spent one percent of the federal budget — or even one half of one percent — on randomized trials to figure out which policies work and which don’t, we’d quickly amass a huge storehouse of evidence that could help us spend every other dollar in the budget more effectively. Even better, we could design the experiments to tell us exactly what we want to know, rather than being limited to what a sad accident reveals.

The problem with the Oregon study, which is described in more detail below, is we don’t really know what we’re learning. It’s not clear, for instance, if the results are applicable to all health insurance, to all Medicaid insurance, or just to Oregon’s Medicaid program. It also only has two years worth of data, so we can’t know whether the sharp uptick in preventive medicine and diabetes diagnoses will pay off down the road.

Those questions, however, could be answered if we designed experiments to answer. And we should. Seeing a unicorn is fun, but breeding them is even better.

(If you want to really geek out on this subject — and you’re reading Wonkbook, so you probably do — the Hamilton Project has some good ideas for how the government could supercharge evidence-based policymaking. And Jim Manzi has written a whole book on the subject.)

Wonkbook’s Numbers of the Day: 1.0 and 1.1 percent. Those are the annual rates of inflation as measured by two price indexes closely watched by the Federal Reserve, the headline and core indexes for personal consumption expenditures. The Fed targets the former at 2 percent per year. Low inflation may mean more easing in future meetings. More below.

Wonkblog’s Graph of the Day: The rise of genetically modified crops.

Wonkbook’s Top 5 Stories: 1) Exciting Medicaid study news! 2) Fed weighs more monetary easing; 3) immigration reform a topic for Obama trip to Mexico; 4) Treasury won’t guess debt-ceiling date; and 5) Republican policymaking in chaos.

1) Top story: Everything you need to know about the Oregon Health Study

The results, in short: “The research, published Wednesday in the New England Journal of Medicine, did find that low-income people who recently gained Medicaid coverage in Oregon used more health-care services. New Medicaid enrollees had less trouble paying their bills and saw significant improvements in mental health outcomes, with rates of depression falling by 30 percent. But on a simple set of health measures, including cholesterol and blood pressure levels, the new Medicaid enrollees looked no different than a separate group, who applied for the benefit but were not selected in a lottery.” Sarah Kliff in The Washington Post.

Read: The study. The New England Journal of Medicine.

@ezraklein: If nothing else, the Oregon Medicaid study shows we need to fund more randomized controlled experiments in public policy

What the Oregon study can’t tell. “The Oregon Health Study released a new round of results on Wednesday, showing that Medicaid coverage does not seem to improve low-income adults' blood pressure, blood sugar or weight in a two-year time frame. It says nothing about the chance of diagnosis of, eventual health outcomes for or costs associated with any form of cancer, Alzheimer's, Parkinson's or dozens of other debilitating medical conditions. It also says nothing about health results outside of a two-year time frame.” Annie Lowrey in The New York Times.

CARROLL AND FRAKT: How you should understand the Oregon study. “The good: Medicaid improved rates of diagnosis of depression, increased the use of preventive services, and improved the financial outlook for enrollees. The bad: It did not significantly affect the A1C levels of people with diabetes or levels of hypertension or cholesterol. This has led many to declare (and we're not linking to them) that the ACA is now a failed promise, that Medicaid is bad, and that anyone who disagrees is a "Medicaid denier".” Aaron Carroll and Austin Frakt in The Incidental Economist.

COHN: Why Oregon matters. “The big news is that Medicaid virtually wiped out crippling medical expenses among the poor: The percentage of people who faced catastrophic out-of-pocket medical expenditures (that is, greater than 30 percent of annual income) declined from 5.5 percent to about 1 percent. In addition, the people on Medicaid were about half as likely to experience other forms of financial strain--like borrowing money or delaying payments on other bills because of medical expenses.” Jonathan Cohn in The New Republic.

CANNON: Bad news for Medicaid. “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.” Michael F. Cannon for the Cato Institute.

@mattyglesias: Oregon study hardly decisive, but strengthens the case for giving poor people money rather than discount health care.

IRS releases rules for health law’s tax credit. “People who don't receive adequate health insurance through their employers would be eligible for premium tax credits of varying amounts, based on their income. The draft Internal Revenue Service (IRS) rules, published in the Federal Register for public consideration, detail the parameters of the program…The IRS and Department of Health and Human Services have developed a "minimum value calculator" that employers could use to determine whether their plans meet previously proposed essential health benefits. Individuals could also use the calculator to determine if they are eligible for the tax credit.” Ben Goad in The Hill.

Florida runs out of time to expand Medicaid. “With the Republican-dominated Legislature preparing to leave town on Friday, time has run out to draft a compromise bill between the House and Senate that would expand Medicaid with the help of billions of federal dollars…The Legislature's inability to agree means that more than a million low-income Floridians will remain without insurance, at least in the short term. Florida has one of the nation's highest rates of uninsured people. Public hospitals also will suffer because they will continue to have to care for those one million uninsured who seek treatment in their emergency rooms.” Lizette Alvarez and Christine Jordan Sexton in The New York Times.

@justinwolfers: When someone tells you the Oregon Medicaid study proves the program doesn’t work, ask them if they’re giving up their health insurance.

Poor prognosis for health-data privacy. “The sharing of Americans’ health information is set to explode in coming years, with millions of patients’ medical records converted to electronic form and analyzed by health-care providers, insurers, regulators and researchers. That has prompted concerns over privacy--and now, new federal rules that aim to give patients more control over their information are posing technical and administrative problems for the doctors and hospitals that have to implement them.” Melinda Beck in The Wall Street Journal.

@kdrum: For laymen, the headline of the Oregon study should be “possibly positive but inconclusive,” not “had no effect.”

Republicans propose per-capita Medicaid caps. “Rep. Fred Upton (R-Mich.), who chairs the Energy and Commerce Committee, and Sen. Orrin Hatch (R-Utah), the top Republican on the Finance Committee, proposed a “per capita cap” on Medicaid benefits…Separate funding pools would be created for the four populations Medicaid serves: elderly beneficiaries, disabled people, children and adults. The proposal would cap per-person spending within each category.” Sam Baker in The Hill.

@ATabarrok: Will Oregon’s accidental experiment increase support for randomized trials of public policy or decrease support. I bet decrease.

Reid says Obamacare needs more implementation funding. “Reid warned that people will not be able to choose health insurance plans on government health exchanges if federal authorities lack the resources to set them up and educate the public.” Alexander Bolton in The Hill.

Administration plans to appeal Plan B ruling. “The Obama administration also asked the U.S. District Court of the Eastern District of New York to stay Judge Edward Korman's early-April ruling, which is set to take effect Sunday. The administration's challenge will no doubt reignite a debate over whether young teens should be eligible to obtain emergency contraception without a doctor's consent, a politically fraught issue that has vexed two presidential administrations and led to the resignation of multiple FDA officials…In federal court documents, the Justice Department argued that Korman overstepped his authority in ordering the FDA to make emergency contraceptives available to all women over the counter.” Sarah Kliff in The Washington Post.

…It will be available to 15-year-olds, but they’ll need a passport. “FDA spokeswoman Stephanie Yao said in an interview that other forms of identification would also be acceptable for obtaining the contraceptive. "A 15-year-old can use an alternative form of ID to verify their age, for example, a passport or birth certificate," Yao said. "If a 15-year-old is unable to verify their age, they will not be able to purchase Plan B One-Step."” Sarah Kliff in The Washington Post.

Music recommendations interlude: Dire Straits, “Setting Me Up.”

Top op-eds

REINHART AND ROGOFF: Austerity is not the only answer to a debt problem. “First and foremost, governments must be prepared to write down debts rather than continuing to absorb them. This principle applies to the senior debt of insolvent financial institutions, to peripheral eurozone debt and to mortgage debt in the US…One of us attracted considerable fire for suggesting moderately elevated inflation (say, 4-6 per cent for a few years) at the outset of the crisis. However, a once-in-75-year crisis is precisely the time when central banks should expend some credibility to take the edge off public and private debts.” Carmen Reinhart and Kenneth Rogoff in The Financial Times.

STEVENSON AND WOLFERS: How to separate lies from statistics. “Focus on how robust a finding is, meaning that different ways of looking at the evidence point to the same conclusion. Do the same patterns repeat in many data sets, in different countries, industries or eras? Are the findings fragile, changing as one makes small changes in how phenomena are measured, and do the results depend on whether particularly influential observations are included?” Betsey Stevenson and Justin Wolfers in Bloomberg.

YGLESIAS: Disruption is overrated. “That's a lot of disruption. Enough to lead a person to the conclusion that it's become an all-purpose technology industry buzzword, drained of meaning. A "synergy" for our time. This is a shame, because while all innovation is great, the idea of disruptive innovation as a distinctive kind of innovation has real value. And while disruptive innovation is generally a good thing, nothing inherent to the idea implies it's the only good thing or the best thing. Entrepreneurs should not be ashamed to admit that their ideas aren't particularly disruptive.” Matthew Yglesias in Slate.

DIONNE: Obama needs to hope again. “ In the areas he does control, Obama has to talk less about the hurdles he faces and more forcefully about what he's doing to get over them. No matter how much Congress may have tied his hands, he should not have let Guantanamo fester…Obama is right that Republicans aren't going to make anything easy for him. But he has let them suck him into a debate about budget cuts when his task is to talk about growth. In the process, he has allowed congressional paralysis to become the dominant story in Washington.” E.J. Dionne in The Washington Post.

EDSALL: Guns and political suicide. “A shift of those four votes would have dramatically changed the politics of the debate over gun legislation. Together with Senate Majority Leader Harry Reid, who voted "no" to preserve parliamentary maneuverability, the four dissenting Democrats would have brought the total number of votes in support of the background check amendment to 59. If gun control advocates had been within one vote of winning, they would have been able to put tremendous pressure on Senator Kelly Ayotte, Republican of New Hampshire, to vote yes.” Thomas B. Edsall in The New York Times.

Data interlude: The highest CEO pay ratios.

2) Fed considers boost

Fed ponders increase in monetary stimulus. “[A]fter its two-day policy-setting meeting wrapped up Wednesday, the central bank explicitly stated for the first time that it could increase, as well as reduce, bond purchases "as the outlook for the labor market or inflation changes."” Ylan Q. Mui in The Washington Post.

Read: The FOMC policy statement.

They’re watching for any disinflation. “U.S. inflation has moved noticeably below the Fed’s 2% goal, part of a global slowdown. This has taken pressure off the Fed and other central banks to pull back from their efforts to boost growth by pumping new money into the world economy…The global inflation slowdown is one of the more surprising developments confronting the Fed and other central banks, and has become more apparent in recent few weeks.” Jon Hilsenrath, Victoria McGrane, and Brian Blackstone in The Wall Street Journal.

What Apple’s bond sale has to do with the Fed. “Apple Inc. sold $17 billion worth of bonds Tuesday, in one of the hottest corporate debt offerings in history. The deal is a clever maneuver of corporate finance that will likely prove beneficial for Apple shareholders--but in ways that show what's wrong with U.S. tax policy and why the Fed's easy money policies haven't done more to rev up the economy.” Neil Irwin in The Washington Post.

Is manufacturing really making a comeback — or is it just hype? “Caterpillar, GE and Ford are among those that have announced that they're shifting some manufacturing operations back to the United States. And economists are now debating whether these stories are a blip -- or whether they signal the beginning of a major renaissances for American manufacturing.” Brad Plumer in The Washington Post.

Obama picks Mel Watt to oversee agency behind Fannie and Freddie. “President Obama on Wednesday nominated telecom industry lobbyist Tom Wheeler to head the Federal Communications Commission and Rep. Mel Watt (D-N.C.) to be the next director of the Federal Housing Finance Agency…In nominating Watt, Obama noted that the congressman has served on the House Financial Services Committee during entire his 20 years in office.” Zachary A. Goldfarb and Cecilia Kang in The Washington Post.

…And he has no intention of ever getting rid of government guarantees on mortgages. “A decision to maintain a significant role for the government in the housing market would continue to make affordable 30-year mortgages available to most Americans, analysts say, although it would also mean that taxpayers would continue to be exposed to risks. Other proposals, including several to abolish Fannie and Freddie and replace them with nothing, could mean the disappearance of the 30-year loan because there would be no entity to guarantee such long-term debt.” Zachary A. Goldfarb in The Washington Post.

…But Watt gets backing from key liberals. “Does Watt, who is quite liberal, have any chance at all of getting confirmed in the face of GOP opposition? That's crucial to the left, because it's critical that DeMarco be dislodged, in order to help distressed homeowners, which is urgent both for their sake and for the economy. On the first point, two top liberals -- Senator Elizabeth Warren and Dem Rep. Keith Ellison, the co-chair of the Congressional Progressive Caucus -- both assured me that Watt is a solid choice for the left.” Greg Sargent in The Washington Post.

Explainer: Why the debate over labor force participation matters. Jim Tankersley in The Washington Post.

Hiring and manufacturing weaken in April. “Businesses added 119,000 employees to payrolls last month, according to the ADP National Employment Report released on Wednesday, short of economists’ expectations for 150,000 jobs and the smallest gain since last September..Another report showed construction spending fell 1.7 percent to an annual rate of $856.72 billion, the lowest since August, according to the Commerce Department. The drop could cause the first-quarter economic growth estimate to be trimmed from a first reading of 2.5 percent.” Reuters.

Confounding animals interlude: What the heck is this animation?

3) Immigration reform looms over Mexico trip

Immigration on agenda for Obama’s Mexico trip. “For the first time in two decades, Washington appears headed toward an overhaul of immigration laws that will affect the future of millions of Mexicans who have immigrated, legally and illegally, to the United States over the years. But with a bipartisan group of lawmakers seeking to navigate legislation through Congress this month, White House officials are hoping that Mexico's new president, Enrique Pena Nieto, treads carefully in any public comments he makes about the issue.” Michael D. Shear and Randal C. Archibold in The New York Times.

…And what policy specifics might come up? ”The Obama administration's robust deportation practices probably will be a point of tension in the U.S.-Mexico talks. The policies have resulted in record numbers of Mexicans being expelled by U.S. Immigration and Customs Enforcement (ICE), which sometimes releases them en masse onto the streets of rough border cities where they are vulnerable to kidnapping or recruitment by gangs.” Zachary A. Goldfarb and Nick Miroff in The Washington Post.

Big deal: Rubio says Gang of 8 deal can’t pass House. “Sen. Marco Rubio acknowledged Tuesday on a conservative radio talk show that the Gang of Eight's comprehensive immigration reform bill won't likely pass the Republican-led House. The comments from Rubio, perhaps the most influential congressional Republican on immigration, illustrate the challenges facing the prospects for reform after months of private negotiations by a bipartisan coalition of senators produced a wide-ranging, 844-page bill.” Seung Min Kim in Politico.

Washington is deeply engaged with immigration. The public? Not so much. “The debate over whether and how to reform the nation's immigration laws has seized the attention of Washington. But beyond the beltway, Americans are barely tuning in. Fewer than half (44 percent) say they are following the debate very or fairly closely, according to a new Pew Research Center poll. And a plurality (38 percent) don't have an opinion on the bipartisan "Gang of Eight" measure that was recently introduced in the Senate. Those who do have an opinion are split over the bill.” Sean Sullivan in The Washington Post.

Obama prods liberals to have realistic expectations on Senate’s immigration reform. “President Obama is warning liberal supporters that their push to make changes in a comprehensive immigration bill could jeopardize the strategy of Senate leaders, who are aiming to win up to 70 votes for the measure…In a private meeting with a dozen Latino leaders at the White House this week, Obama emphasized that securing a large margin in the Senate is crucial to putting pressure on House Speaker John A. Boehner (R-Ohio) to accept the general framework of the legislation.” David Nakamura in The Washington Post.

…One problem is gay rights. “Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) has told advocates that he will offer an amendment during the bill markup next week allowing gay Americans to sponsor their foreign-born partners for green cards, just as heterosexual couples can. The measure is likely to pass because Democrats face pressure from gay rights advocates to deal with it in committee, rather than on the Senate floor, where the odds of passage are far less favorable. But by doing so, Republicans warn that Democrats will tank the whole bill.” Carrie Budoff Brown in Politico.

Fun longread interlude: What it’s like to leave the Internet for a year.

4) Treasury: We won’t guess on debt ceiling hit

Treasury declines to provide a debt-limit estimate. “The Treasury Department said Wednesday it can keep borrowing “for a period of time” after the debt ceiling resets this month, but it didn’t endorse Wall Street projections that the U.S. can stay below the borrowing limit into September…The Treasury was criticized by Republican lawmakers in 2011 when it repeatedly adjusted the likely drop-dead date for when it would run out of borrowing room. Since then, officials have been loath to pinpoint an exact target until they are more certain of their estimates.” Jeffrey Sparshott in The Wall Street Journal.

Line forms for sequester exemptions. “Congress and President Barack Obama spared the FAA from the full brunt of sequester, sending a clear message: We're willing to cave. Now advocates for other agencies and programs are lining up by the newly opened door, looking for fixes to their own across-the-board budget cut woes…Here's a look at which agencies and programs have the best chance -- or little to no chance -- at scoring their own sequestration exemptions or funding increases.” Darren Samuelsohn and David Nather in Politico.

Strange signs interlude: This sign apologizes for itself with “Sorry.”

5) Republican rethink turns to disorder, extremism

The House Republican caucus is in complete chaos. ”The GOP leadership is dealing with an unprecedented level of frustration in running the House, according to conversations with more than a dozen aides and lawmakers in and around leadership. Leadership is talking past each other. The conference is split by warring factions. And influential outside groups are fighting them. The chaos has led to a sense of stalemate for House Republicans, who have been in the majority since 2011.” Jake Sherman in Politico.

Governors and GOP clash on taxes. “Republican lawmakers in several states are blunting plans by GOP governors to reduce or eliminate income taxes, putting the legislators at odds with figures many in the party see as leading voices on reshaping government. Friction over tax policy within the GOP has flared in states such as Louisiana, Nebraska, Kansas and Ohio, as Republican lawmakers raise concerns over projected revenue losses from income-tax cuts. Three of those states shelved big income-tax cuts that would be paid for by broadening the sales tax, and in Kansas, legislators will return next week to a continuing debate over the size and speed of proposed cuts.” Mark Peters and Neil King Jr. in The Wall Street Journal.

The GOP wants to stop measuring the unemployment rate and other economic data. “In what's becoming a biennial tradition, another House Republican wants to cut the Census down to size. Rep. Jeff Duncan (R-S.C.) is rolling out the Census Reform Act this week, having formally introduced it April 18. The bill, as Michael McAuliff of the Huffington Post notes, would abolish the Current Population Survey, which is used to compute the unemployment rate and labor force participation rate. We wouldn't have an unemployment rate if Duncan and his cosponsors -- who include GOP House libertarian-leaners like Jason Chaffetz, Raul Labrador, Thomas Massie, Steve Stockman and Walter Jones -- get their way.” Dylan Matthews in The Washington Post.

House to move on family flexibility bill next week. “House Republicans next week plan to pass legislation aimed at giving private-sector workers the option of taking more time away from work instead of overtime pay. The GOP will call up H.R. 1406, the Working Families Flexibility Act, sponsored by Rep. Martha Roby (R-Ala.). Roby’s bill fits in with the broad theme that House Majority Leader Eric Cantor (R-Va.) outlined earlier this year in a speech on “making life work” for people. It would let private sector workers who receive overtime pay take extra time off from work instead of additional salary.“ Pete Kasperowicz in The Hill.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

The rise of genetically modified crops. Brad Plumer.

Is U.S. manufacturing making a comeback -- or is it just hype? Brad Plumer.

Obama administration plans to appeal Plan B ruling. Sarah Kliff.

Plan B will be available to 15-year-olds, but they might need a passport to get it. Sarah Kliff.

WonkFeud Finale: Why the labor force participation debate matters. Jim Tankersley.

A new GOP bill would prevent the government from collecting economic data. Dylan Matthews.

Here's what Apple Computer's insanely great bond offering has to do with the Federal Reserve. Neil Irwin.

Study: Medicaid reduces financial hardship, doesn't quickly improve physical health. Sarah Kliff.

Et Cetera

Should we release dying prisoners? Criminal-justice experts say yes. Charlie Savage in The New York Times.