The Return on Investment of Medicaid Expansion:
Supporting Work and Health in Rural Ohio
By Loren Anthes, MBA

Fellow, Center for Medicaid Policy
January 4, 2017 

When debating the Medicaid expansion in 2013, the Ohio legislature appropriately questioned whether expanding the program to non-disabled adults would be done so efficiently, supporting the health, welfare, and economy of Ohio and its citizens. The subsequent policy process reflected this focus on program performance, including a legislative committee tour around Ohio to understand the potential impact of expansion, the creation of the Joint Medicaid Oversight Committee, legislative efforts to increase cost-sharing for participants, and an evaluation of the impact of the expansion due 2017. It is this last item, the “Ohio Medicaid Group VIII Assessment” evaluation, which is the subject of this blog.

As required in House Bill 64 (Ohio’s last budget), the Ohio Department of Medicaid (ODM) must provide a report to the General Assembly (GA) examining how the expansion affected new enrollees (“Group VIII”). To accommodate this requirement, ODM developed a report that measured the impact of expansion on access, utilization of services, physical and mental health status, financial distress, and employment. This assessment included a telephone survey of over 7,500 people, a review of nearly 700,000 Medicaid claims, focus groups, interviews, and an in-person biometric screening of nearly 900 respondents. Participants included both the Group VIII population and “pre-expansion” enrollees for comparison purposes.

To understand what the report indicates in terms of program performance, it may be helpful to use an existing evaluation model to consider the strengths and weaknesses of the policy decision that is the Medicaid expansion on Group VIII. To that end, I will use the framework of the “Triple Aim” which evaluates health system performance based on patient experience (which includes quality and satisfaction), health, and per capita costs.

EXPERIENCE

  • Uninsured rates for low-income Ohioans at lowest rate recorded, with majority of benefit going to White, unmarried, childless men with a high school degree or less;
  • Access to care was improved for 64.3 percent of enrollees, including access to services for mental health and substance use disorders;
  • Lessened anxiety about access to services and ability to pay for medical bills;
  • Reductions in Emergency Department (ED) utilization;
  • Greater access to pharmacological treatments except for drugs associated with substance abuse or dependence.

HEALTH

  • 47.7 percent of participants indicated an improvement in health;
  • 27 percent had been newly diagnosed with a chronic condition;
  • Ability to manage chronic diseases increased;
  • Better control of high-risk blood pressure;
  • Severe obesity decreased;
  • High-risk cholesterol decreased.

COST

Unfortunately, cost for the expansion was not something directly reported in the Assessment, though it may be the most significant metric, politically. To that end, when looking at reported expenditures over the last calendar year, the following trend emerges:

  • Spending for the calendar year was $111 million under budget, with $103 million of that in the last six months.
Additionally, utilizing other reports on expenditures made available by ODM, the Office of Budget and Management and the Joint Medicaid Oversight Committee, other data points on cost become apparent:
RETURN ON INVESTMENT
In addition to the triple aim, it may also be helpful to try to capture if this significant investment of state and federal resources creates any other form of returns in regards to population health and economic well-being. Consider the following:
  • 22.9 percent of enrollees stated their financial situation improved;
  • About 58.6 percent of enrollees stated coverage made it easier to purchase food, with 48.1 percent saying it was easier to pay rent or mortgage;
  • 44.8 percent of enrollees with medical debt, the majority of whom indicated such debt made it difficult to pay other bills, saw their debt eliminated;
  • 52.1 percent of enrollees stated attaining coverage made it easier to secure and maintain employment, with that number increasing to 74.8 percent for those currently unemployed.

Beyond the Assessment, Medicaid, generally, has a deep connection to some of the major public health and economic concerns in Ohio, including the opiate crisis, infant mortality, and teen pregnancy:

Interestingly, these maps show the disproportionate impact that Medicaid coverage has on primarily urban and primarily rural counties, particularly those rural counties in Appalachia. These data are consistent with recent research conducted by The Center for Community Solutions (CCS), which shows that many big cities are similar to “small hub towns” in terms of the social and economic issues they face. 

With that said, there are some important differences between big urban centers and small hub towns when it comes to health care. First, nearly 43.5 percent of the population in the small hub towns are covered by Medicaid as opposed to 38.5 percent in big cities. Another important difference lies in the diversity of economies. Of the 47 small hub towns examined in our research, 35 of them had a hospital in their community, representing a major employment sector when compared to cities. Medicaid expansion, then, has had a large effect on the financial status of these rural hospitals, in addition to the effect it has had on health care coverage, also. In a recent study published by the Journal of Health Affairs, researchers determined that rural hospitals were more financially sensitive to Medicaid expansion, given the traditionally higher rates of uncompensated care and lower profit margins of rural providers. Thus, the advantages of expansion not only benefit the patient, but the economies of major employers in these communities. 

Policy is the reflection of the priorities of the public through their elected representatives. Governor Kasich and the General Assembly have worked over the course of the last few years to improve Ohio’s economy and provide the means by which individuals can become economically self-sufficient and independent. In the context of Medicaid, a massive state and federal partnership, this has meant operating a program that is efficient and patient-centered, so that the resources dedicated to funding coverage allow for the greatest improvements in health and spending efficiency. Clearly, the report from the Ohio Department of Medicaid has shown that the investment of these resources has improved health and access. What’s more, when looking at small hub towns, examining the relationships between public health crises like the opiate epidemic and infant mortality alongside the challenge of a diminishing manufacturing economy shows us how Medicaid expansion addresses the health and economic needs of many Ohio communities and individuals. Indeed, the state's Assessment suggests that many previously uninsured Ohioans are now more able to seek work, manage their finances, and have a greater ability to address other social determinants of their health including housing and food. This idea is consistent with recent research which shows that health coverage leads to greater intergenerational economic mobility and liberty, a legacy of the Medicaid program since its inception. Now, at the beginning of a new General Assembly and Congress, policymakers at the state and federal levels need a candid discussion about the impact of Medicaid expansion as they seek reform.