Why Health Insurance is Not the Same Thing as Health Care

Obama health-care adviser Zeke Emanuel outside his office in the Eisenhower Executive Office Building in 2009. (Photo credit: Wikipedia)

For most people in the health policy community, the word “coverage” carries a certain emotional power. People without health insurance coverage, we believe, are one bad break away from disability and destitution. Hence, many politicians, researchers, and activists believe that expanding coverage is more important than any other policy goal. But not all health insurance is created equal. Indeed, there are tens of millions of Americans who believe they have “health insurance” who can’t get actual health care when they truly need it. If Obamacare remains the law of the land, this problem will get worse, not better.

(DISCLOSURE: I am an outside adviser to the Romney campaign on health care issues. The opinions contained herein are mine alone, and do not necessarily correspond to those of the campaign.)

Earlier this month, in an interview with the Columbus Dispatch, Mitt Romney pointed out that, in America, anyone who has a heart attack has access to hospital care. “We don’t have a setting across this country where if you don’t have insurance, we just say to you, ‘Tough luck, you’re going to die when you have your heart attack,’” he said. “No, you go to the hospital, you get treated, you get care, and it’s paid for, either by charity, the government, or by the hospital. We don’t have people that become ill, who die in their apartment because they don’t have insurance.”

Paul Krugman: Mitt Romney is ‘blind’

Paul Krugman, upon reading these factually accurate remarks, went ape-dung. “These are remarkable statements,” wrote Krugman on Sunday in the New York Times. “Going to the emergency room when you’re very sick is no substitute for regular care, especially if you have chronic health problems. When such problems are left untreated—as they often are among uninsured Americans—a trip to the emergency room can all too easily come too late to save a life. So the reality, to which Mr. Romney is somehow blind, is that many people in America really do die every year because they don’t have health insurance.”

I don’t know if I’ve ever read a Krugman column in which Krugman didn’t paint those who disagree with him as morons or liars. But Krugman has a point—one that Mitt Romney agrees with, by the way—that emergency care is no substitute for regular care. Krugman, though, takes this kernel of truth and attempts to make a gallon of Obamacare popcorn out of it.

Krugman’s logic, and that of many Obamacare supporters, goes like this: (1) It’s not enough to offer all Americans free emergency room care, because access to early diagnosis and treatment is important to good health; (2) The uninsured don’t have access to such care, whereas the insured do; (3) Obamacare, by reducing the number of people without insurance by 30 million, gives 30 million more Americans access to such care; and (4) Mitt Romney, by pledging to repeal Obamacare, seeks to deny such health care to tens of millions of Americans.

Not all health insurance helps people live longer

There is, however, a key flaw in Krugman’s logic. It is this. Just because you have a piece of paper that says you have “health insurance” doesn’t mean that you can see a doctor when you need to.

There are three major forms of health insurance in America: Medicare, our government-sponsored program for the elderly; Medicaid, our government-sponsored program for the poor; and private insurance for most everyone else. As I have described extensively on this blog, it’s much harder to get a doctor’s appointment if you’re on Medicaid than if you have private insurance, because Medicaid pays doctors so little that doctors can’t afford to see Medicaid patients. This, in turn, leads patients on Medicaid that are at best no different than being uninsured, and in many cases even worse.

Krugman contemptuously dismisses such talk. “Conservatives love to cite the handful of studies that fail to find clear evidence that insurance saves lives,” he writes. (Here’s the most rigorous of them.) “The overwhelming evidence, however, is that insurance is indeed a lifesaver, and lack of insurance a killer. For example, states that expand their Medicaid coverage, and hence provide health insurance to more people, consistently show a significant drop in mortality compared with neighboring states that don’t expand coverage.”

In fact, Krugman is wrong. The overwhelming evidence goes in the other direction. That evidence shows that people with private, commercial health insurance have substantially better outcomes than those without insurance; but that Medicaid makes little to no difference.

Understanding this data really matters, because of the 30 million people that Obamacare expands coverage to, about half get that coverage through a cavalier and reckless expansion of Medicaid.

Medicaid has little impact on preventive care

Let’s review the evidence. In a paper I wrote in March for the Manhattan Institute, I went through research studying nearly a million patients, showing that patients on Medicaid had worse outcomes than those with no insurance at all.

The study Krugman cites in his column, regarding supposedly improved mortality in three states that expanded Medicaid, was statistically flawed. Only one state—New York—showed a significant improvement against its (biased) comparator. In another state, Maine, mortality under the Medicaid expansion got worse.

Another study that Obamacare’s supporters like to cite comes from Oregon. But the Oregon study, so far, has only described patients’ subjective view of their own health, rather than looking at objective clinical outcomes such as death and longevity.

Let’s look at the specific question Paul Krugman raised. Are patients on Medicaid diagnosed and treated earlier than they would have been if they were uninsured? There is no evidence of that to date.

Indeed, the evidence goes in the opposite direction. To take one of many examples, a group of researchers at the American Cancer Society looked at 533,715 women with breast cancer, and asked: When those women were first diagnosed with breast cancer, were they diagnosed with early-stage or late-stage disease? And how did that correlate to their insurance status?

That correlation matters, because if you already have late-stage cancer when the doctors first discover it, it’s much harder for you to receive curative treatment. Quite literally, the difference between being diagnosed with Stage I and Stage IV breast cancer is the difference between life and death.

Sadly, what the ACS researchers found was quite typical for the literature. Women without insurance were 2.4 times as likely to have late-stage breast cancer upon diagnosis than women with private insurance. But those on Medicaid performed even worse on this metric than did the uninsured; Medicaid patients were 2.5 times as likely to obtain a late-stage diagnosis as those on private insurance. And the authors adjusted their results for race, age, income, education, and geography, among other factors.

The study, like all studies, has its quirks and limitations. But it’s typical of the mountains of published data describing Medicaid’s poor access and poor outcomes. “Our results are in agreement with and extend those from previous, smaller studies,” write the authors in their paper. “The uninsured and Medicaid populations…are less likely to receive timely follow-up and are more likely to experience greater delays in diagnosis and treatment.”

Obama adviser: Medicaid has little impact on survival

Sarah Kliff of the Washington Post, reacting to the same Romney interview as Paul Krugman, wrote a piece entitled “Yes, insurance status does matter for your health.” She spoke to Obama adviser Ezekiel Emanuel, of the University of Pennsylvania, who confirmed to her that health insurance does matter. “In almost every way we’ve looked at it,” said Emanuel, “if you’re uninsured you get worse or more delayed care. In the case of cancer, this is something that can be a matter of life and death.”

To illustrate his point, he sent Sarah a chart, comparing cancer survival times for patients with private insurance, Medicaid, and no insurance at all:

But Sarah neglected to comment about the most notable aspect of this chart. While patients with private insurance lived significantly longer than those with no insurance, patients with Medicaid didn’t. If Medicaid were a drug, the FDA would reject it without a second thought.

Expanding coverage has to be done the right way

This, then, is the fundamental problem with Obamacare. It expands coverage, in large part, by pouring trillions of dollars into the Medicaid program, without making any meaningful improvements to the way that program is structured. And Scott Gottlieb and Tom Miller, of the American Enterprise Institute, fear that Obamacare’s private insurance exchanges will also suffer from poor quality and poor access, just like Medicaid.

The proper goal, then, is not merely to expand coverage out of some obsession with an arbitrary statistic, but rather to do what we can to make it easier for Americans to buy high-quality, private insurance.

The way to do that is to make private insurance cheaper, by liberating the government restrictions that make it difficult for individuals to purchase insurance for themselves, instead of from their employers.

Depending upon how Romney’s plan were to be structured, it could offer universal coverage to all Americans, or achieve more modest expansions of coverage in exchange for reducing the deficit. Either way, the Romney plan focuses on giving more Americans access to high-quality private insurance.

Let’s say, for the sake of argument, that Mitt Romney’s plan expanded insurance coverage to 10 million people, in comparison to Obamacare’s 30 million, by making health insurance cheaper. According to the people like Paul Krugman who insist that all coverage is the same, Obamacare is the better option.

But the 10 million people who might get private insurance under a Romney administration would enjoy the same access to high-quality care that employers provide to their employees. That private insurance would have a real impact on the quality of their health and the length of their lives. Under Obamacare, few will be able to say the same thing.

Follow Avik on Twitter at @aviksaroy.