Medicaid Is Still a Very Good Investment

March 26, 2015

Researchers at Columbia University’s Mailman School of Public Health analyzed the results of the Oregon Health Experiment, where eligible uninsured individuals were randomly assigned Medicaid or to stay with their current care. Considered controversial because the experiment found no measurable gains for physical health it did reveal benefits for mental health, financial wellbeing, and preventive screening. In terms of quality-adjusted life years, the researchers showed that Medicaid is an excellent value—a $62,000 gain in quality-adjusted life years. Study findings are online in the American Journal of Public Health.

Quality-Life Year Gains $62,000

In 2008, the state of Oregon randomly provided Medicaid coverage to approximately 10,000 individuals out of 30,000 selected from all Medicaid-eligible residents. Of the 10,000 randomly receiving Medicaid there were 6,315 in the treated category and 5,769 in the control group. Using high performance computers and the resources of GRAPH, a Columbia Mailman School initiative that studies how to optimize population health policy, the researchers analyzed survey responses and biomarker data for both samples. Findings showed that Medicaid provided substantial financial protections, increased rates of preventive testing, reduced depression, and improved self-rated health. Alternately, Medicaid did not significantly lower blood pressure, serum cholesterol, or blood glucose levels.

In response to the findings, opponents of Medicaid called for its funding to be stopped, while proponents hailed the study as proof that Medicaid was a worthwhile investment because it showed some benefits. Representatives from both groups claimed that the sample size was too small to draw conclusions about physical benefits.
“Both ways of thinking are correct,” said Peter Muennig, MD, MPH, associate professor of Health Policy and Management at Columbia University’s Mailman School of Public Health and first author. “While the arguments of Medicaid proponents and opponents are plausible and the concerns about sample size are justified, we found that the benefits to mental health and fiscal protections are meaningful enough to justify further expansion of Medicaid.”
The research team points to preventive measures like mammography and the estimates of the U.S. Task Force on Clinical Preventive Services that higher rates of screening for disease saves lives. But because there is no scientific evidence that proves this, these benefits were not included in the current analysis. “By excluding these potential benefits while including all of their costs, we can be even more certain that our estimate of $62,000 quality-adjusted life year gained is conservative,” noted Muennig.
“Because none of the observed outcomes were harmful and because all costs were included, one can be much more certain that the combined effects of all benefits of Medicaid are cost-effective.” 

About Columbia University’s Mailman School of Public Health

Founded in 1922, Columbia University’s Mailman School of Public Health pursues an agenda of research, education, and service to address the critical and complex public health issues affecting New Yorkers, the nation and the world. The Mailman School is the third largest recipient of NIH grants among schools of public health. Its over 450 multi-disciplinary faculty members work in more than 100 countries around the world, addressing such issues as preventing infectious and chronic diseases, environmental health, maternal and child health, health policy, climate change & health, and public health preparedness. It is a leader in public health education with over 1,300 graduate students from more than 40 nations pursuing a variety of master’s and doctoral degree programs. The Mailman School is also home to numerous world-renowned research centers including ICAP (formerly the International Center for AIDS Care and Treatment Programs) and the Center for Infection and Immunity. For more information, please visit