At a cost of nearly $100 billion a year, Obamacare adds 16 million people to the rolls of Medicaid. The President and his allies are most proud of this aspect of the new law, as it helps to fulfill a long-held progressive goal of providing government-funded health insurance to all Americans.
Except that Medicaid is broken. Medicaid so severely underpays doctors—reimbursing them at 72 percent of already-stingy Medicare rates—that many physicians refuse to see Medicaid patients. Medicaid patients, in turn, fill up emergency rooms, where they delay the care of the seriously injured.
Now comes word, via a large study by the University of Virginia (h/t Joseph Colletti), that surgical patients on Medicaid are 13% more likely to die than those with no insurance at all, and 97% more likely to die than those with private insurance.
The Virginia group evaluated 893,658 major surgical operations from the Nationwide Inpatient Sample database from 2003 to 2007. They divided the patients up by the type of insurance—private insurance, Medicare, Medicaid, and uninsured—and adjusted the database in order to control for age, gender, income, geographic region, operation, and comorbid conditions (having 2 or more diseases simultaneously). That way, they could correct for the obvious differences in the patient populations (for example, older and poorer patients being more likely to have ill health).
They then examined three measurements of surgical outcome quality: the rate of in-hospital mortality; average length of stay in the hospital (longer stays in the hospital are a marker of poorer outcomes); and total costs.
In-Hospital Mortality (vs. Private Insurance)
Length of Stay (days)
Total Costs ($)
The in-hospital death rate for surgical patients with private insurance was 1.3%. Medicare, uninsured, and Medicaid patients were 54%, 74%, and 97% more likely to die than those with private insurance.
The average length of stay in the hospital was 7.38 days for those with private insurance; on an adjusted basis, those with Medicare stayed 19% longer; the uninsured stayed 5% shorter; and those with Medicaid stayed 42% longer.
Total costs per patient were $63,057 for private insurance; Medicare patients cost 10% more; uninsured patients 4% more; and Medicaid patients 26% more.
In summary: Medicaid patients were almost twice as likely to die as those with private insurance; their hospital stays were 42% longer, and cost 26% more. Compared to those without health insurance, Medicaid patients were 13% more likely to die, stayed in the hospital for 50% longer, and cost 20% more. It is hard to see how this problem doesn’t get significantly worse when Obamacare’s expansion of Medicaid is fully phased in.
Remember these statistics the next time you see a study claiming that the quality of American health care is no better than that of Europe. Such studies rarely separate patients with Medicaid and Medicare from those with private insurance.
The Virginia study reminds us that the true cost of government health care is not its impact on the budget, but its impact on the lives and health of every American. We can only hope that our representatives in Washington begin to understand this.
– Avik Roy is an equity research analyst at Monness, Crespi, Hardt & Co., and blogs on healthcare policy at The Apothecary.