Considering whether Medicaid is worth the cost: revisiting the Oregon Health Study

Abstract

The Oregon Health Study was a groundbreaking experiment in which uninsured participants were randomized to either apply for Medicaid or stay with their current care. The study showed that Medicaid produced numerous important socioeconomic and health benefits but had no statistically significant impact on hypertension, hypercholesterolemia, or diabetes. Medicaid opponents interpreted the findings to mean that Medicaid is not a worthwhile investment. Medicaid proponents viewed the experiment as statistically underpowered and, irrespective of the laboratory values, suggestive that Medicaid is a good investment. We tested these competing claims and, using a sensitive joint test and statistical power analysis, confirmed that the Oregon Health Study did not improve laboratory values. However, we also found that Medicaid is a good value, with a cost of just $62 000 per quality-adjusted life-years gained.