Study: RomneyCare Saved Lives, But at a High Cost
The authors estimate that “for approximately every 830 adults who gained insurance [under RomneyCare], there was 1 fewer death per year.” If we assume the per-person cost of covering those 830 adults is roughly the per-person premium for employer-sponsored coverage in Massachusetts in 2010 (about $5,000), then a back-of-the-envelope calculation suggests that RomneyCare spent $4 million or more per life saved. The actual figure may be much higher if we include other costs incurred by that law. The World Health Organization considers a medical intervention to be “not cost-effective” if it costs more than three times a nation’s per-capita GDP per year of life saved. This in turn suggests that RomneyCare would have to give every person it saves an average of nearly 30 additional years of life to meet the World Health Organization’s criteria for cost-effectiveness. Given that the mortality gains were concentrated in the 35-64 group, that seems like a stretch.
As an economist might put it, this means there are likely to be policies out there that could save a lot more lives than RomneyCare does per dollar spent.
Massachusetts had a lower all-cause mortality rate than the control group as well as a lower medical amenable mortality rate. After RomneyCare, the mortality rate (per 100,000) fell more in Massachusetts than in the control group. The mortality rate was 8.2 fewer deaths per 100,000 people (an average of slightly less than 300 people die for every 100,000 population).
The authors are likely picking up an effect of something else beside the effect of RomneyCare. Or, maybe their control group isn’t as representative as they hoped it would be. The finding would have more meaning is the lower mortality was only occurring among the newly insured. But that’s not the case.
I remember in grad school how a classic experiment in econometrics was a model that perfectly correlated the temperatures in Nome Alaska with the winning record of a baseball team. The whole point of this exercise was that correlation doesn’t equal causation.
The whole study is likely a joke. Can’t tell because the research (probably taxpayer funded) is hidden behind the typical academic you-are-a-stupid-and-ignorant-peasant paywall.
I don’t kniow what the research says, but I know the abstract doesn’t tell you what the Massachusetts Department of Public Health has told us for years: the amendable death rate in Massachusetts went down twice as fast before the RomneyCare law was passed than it went down after it passed. Insurance likely has no effect one way or the other (unless the 2000-2005 drop is due to the 1997 Massachusetts so-called “reform” by Weld and Cellucci, which none of these Democratic academics is claiming).
But even if insurance has an effect after 2007, it would be too early to tell. A year or two of a few preventive tests after a lifetime of not going to a doctor could not have dropped the amenable death rate in such a short period. And a doctor’s visit in any other scenario — a year without insurance, e.g. — would be even less relevant. Remember, this new Medicaid coverage in Massachusetts only affected less than 5% of the Massachusetts population – NET – but the academics are measuring the death rate of the whole Massachusetts population.
But I love this wording in the abstract:
“Nonrandomized design subject to unmeasured confounders. Massachusetts results may not generalize to other states.”
And then the academics apparently base their whole argument by comparing to other states. And rush out of press release that the fawning press laps up.
But we saved lives….
“Nevertheless, this study does suggest RomneyCare has saved lives. I certainly hope it has.”
Indeed it has.
We have to save lives at a better cost though! We can be better.
As long as Sebellius is not in charge
Living longer is a good thing, as they say it sure beats the alternative.
But when you add up the trillions spent on Medicare,
(which has unquestionably increased life expectancy after age 65), and the somewhat fewer trillions spent on Medicaid (which has somewhat reduced infant mortality), and the coming trillions spent on expanded health insurance in general (with minute effects on life expectancy)………….
you have to wonderif America is fiscally going over the top to achieve something rather modest.
Especially when there is much scholarship to show that improvements in public health, sanitation, safe food, and safer liquor, and anti-smoking campaigns, are far cheaper and save far more lives.
Then are we as good as we are going to get? How else can we improve healthcare if we aren’t advancing at the same dollar for dollar anymore.
But when you add up the trillions spent on Medicare, (which has unquestionably increased life expectancy after age 65)…
One major effect of Medicare is higher medical prices. To the extent there is an increase in longevity attributable to Medicare, I suspect it’s related to R&D that massive increases in funding provided over the past 50 years. That’s one thing about third-party payment: if they develop it, someone will pay for it (even if it’s only marginally effective compared to older therapies.
I’m most certainly not against medical advancement. I worry about the cost, however. If the average length of life has increased by, say, 25 years in the past 100 years, but the average cost per life-year saved was $100,000, that suggests the average family should budget $2.5 million for medical care. The average family cannot afford $2.5 million over a lifetime for medical care. Basically we need a level of care that society can afford.
…improvements in public health, sanitation, safe food, and safer liquor, and anti-smoking campaigns, are far cheaper and save far more lives.
According to the CDC, of the top 10 improvements to public health in the 20th Century, most were things like you mention. Safer drinking water, better sanitation, safer food supply, childhood immunizations, recognition of tobacco as a health hazard, safer workplaces, safer automobiles, better control of infectious diseases, healthier mothers and babies, family planning, and better care for heart and stroke. With the exception of better treatment of heart disease, most of the advancements had little to do with medicine.
“If we assume the per-person cost of covering those 830 adults is roughly the per-person premium for employer-sponsored coverage in Massachusetts in 2010 (about $5,000), then a back-of-the-envelope calculation suggests that RomneyCare spent $4 million or more per life saved.”
I propose this study though. What is the overall economic impact of one person at the average age of death? That number should be the one we seek to match with costs.
Considering that acts of terrorism place a human life at US $2 million, it may be around there. But that is an interesting theory, and it would provide a goal to reach.
If the impact was $8 million, I would say we are getting a steal.
I am not sure. But it could be an important factor in growth
Although we normal people cannot see the actual Harvard report (although we probably paid for it as taxpayers; we certainly paid for the data it used), the Forbes article to which this blog post is linked shows — as the Massachusetts DPH has reported for years — that the decrease in amenable deaths in Massachusetts started long before RomneyCare. The Forbes article also illustrates that the amenable deat rate in Massachusetts increased after 2008, revering the trend that began long before RomneyCare. So should I conclude RomneyCare caused increased deaths.
[2008 was both the year RomneyCare actually went into effect and the first year that any goo goo scenario could possibly claim that RomneyCare would have an effect. That is, if you were given Medicaid in 2007 and went to the doctor and were told to start taking simvastatin or atenolol, then the first year that RomneyCare kept you from dying would have been 2008.)
Not only is the saving of lives an expensive proposition, I sometimes suspect it makes us poorer.
When we save the life of someone over age 65, they then collect ten or twenty more years of Social Security and Medicare payments. They do pay some income taxes, but usually in far less amounts than their benefits.
This is NOT an attack on greedy geezers. I recently started on Medicare so I am a geezer myself.
I had a heart attack at age 60 and I received life saving medicine.
But not for one moment would I claim that saving my life has made America better off. Saving lives is a luxury in economic terms.
I don’t think extending health insurance to the uninsured is about saving lives or increasing life expectancy though to the extent it does that, it’s a good thing. Health insurance is mainly about providing people with peace of mind and financial security against highly unpredictable and potentially extremely expensive medical events that most of us can’t afford to pay for out of our own resources.
I’ve had my share of health issues over the years including heart bypass surgery 15 years ago. I always had good employer provided health insurance to pay most of the bills. I wouldn’t have wanted to face those bills without health insurance and I don’t think anyone else should have to either.
That said, I’m all for developing strategies to reduce the cost of healthcare including price and quality transparency tools, new payment models including bundled pricing for surgical procedures, reference pricing, tort reform, more investment in fraud mitigation and a more sensible approach to end of life care.
I’ve never seen the World Health Organization metric of 3X per capita GDP as the consensus outer limit of how much society should be prepared to spend on health interventions to gain one quality adjusted life year (QALY). Since the U.S. per capita GDP is 30% higher than Germany’s, it suggests that we should be willing to spend 30% more than Germany to gain one QALY. That still doesn’t suggest, at least to me, that drug prices and other medical prices should be higher in the U.S. just because we are richer on this metric.
By the way, recent OECD data puts U.S. per capita GDP at about $52,000 vs $40,000 for Germany. An upper limit of $150K per QALY for medical interventions would implicitly value a life in the U.S. at $12 million based on a life expectancy of 80 years.