PROVIDENCE – A new study, The Economic Impact of Expanding Medicaid, conducted by The College & University Research Collaborative, a public-private partnership that seeks to leverage the research capacity at Rhode Island’s 11 colleges and universities in order to conduct nonpartisan research to inform economic policy decisions, will have its official debut on March 24 at The Rhode Island Foundation.

CommerceRI and The Rhode Island Foundation are the principal financial investors of the new research collaborative, an outgrowth of the Making It Happen initiative. 

The analysis, done by Liam Malloy and Shanna Pearson-Markowitz of the University of Rhode Island, seeks to answer questions about the economic impact of expanding Medicaid, whether Rhode Island made the right choice by expanding Medicaid, and what will be the impact of that decision on the state’s economy.

The study’s conclusion, rooted in the policy corridor of “regional competitiveness,” says this: “Our analysis indicates that a one percent increase in Medicaid spending per enrollee reduces a state’s employment growth rate by 0.0008 percentage points per year.”

Further, the study opines that complex care management that focused on “high expenditure populations” is “a promising approach,” and that recent research “suggests that the costs may be worth it,” citing one initiative in St. Louis and another in Camden, New Jersey, that achieved “reduced” hospitalizations.

The timing of the report’s release appears to be very opportune for Gov. Gina Raimondo’s initiative to “reinvent” Medicaid.

However, there are some serious questions about the study’s methodology and conclusions that need to be asked and answered before it can become accepted and proven as policy gospel.

To help that discussion process along, with the goal of stimulating conversation and convergence, ConvergenceRI offers the following observation and questions.

Q&A for R&D on policy findings
1. Has the study been peer-reviewed? There’s good reason why most academic studies follow the established tradition of peer-review of studies before publication. In the case of this new study, there does not appear to have been any peer review of the product before publication. Why not? Was there a review of the study conducted at The Rhode Island Foundation? If so, who were the reviewers and what are their affiliations? Collaborative research studies still need to be subjected to review by independent, qualified experts.

2. Have the potential conflicts-of-interest been made transparent? The Rhode Island Foundation, a principal funder of the research collaborative, is also the fiscal agent for what’s now known as the Care Transformation Collaborative, formerly known as the R.I. Chronic Care Sustainability Initiative, or CSI-RI. The study offers the conclusion that “complex care management” is a promising approach to addressing Medicaid spending in Rhode Island. That may or may not be true. But the study does not mention that “complex care management” is a specific strategy now being employed by the Care Transformation Collaborative. The absence of that key fact – that the Rhode Island Foundation may have the appearance of a vested financial interest in the conclusions of the study – raises questions about the validity of the findings. Such potential conflicts need to be made transparent.

3. Did the study, as part of its research methodology, make any age-adjusted calcuations for Medicaid spending in Rhode Island? Some 25 percent of Medicaid enrollees, in the categories of aged and disabled, account for roughly 64 percent of the total spending in 2012, according to the R.I. Executive Office of Health and Human Services and CMS. What length of time does it take to see increased spending associated with the decrease of the number of uninsured? It may take less time to see increased spending for sick, older people than for well, younger people, what’s known as the healthy worker effect? The study said it analyzed coverage by age group, with a particular focus on the working-age population of 18 to 65 years olds. Without some kind of age adjustment, the methodology used in analyzing the spending data would appear to be skewed.

4. What were the statistics for bankruptcy in Rhode Island due to increased health care costs? Going into debt and filing for bankruptcy was cited by the research study as one of the indicators associated with what happens when individuals pay more in health care costs. Analysis of this data could provide a more insightful comparison about economic growth and health spending.

5. Is it a “causal relationship” between the study’s finding that a one percent increase in Medicaid spending per enrollee will reduce a state’s employment rate by 0.0008 percentage points per year? Or, is it a “finding associated with” the data taken from 2011? Where is the line drawn? Ecological study designs are good for generating hypotheses but they cannot be used to make conclusions that infer causality.

6. With the increased enrollment by Rhode Island residents in Medicaid, there were many individuals who were eligible under the previous guidelines but, for whatever reason, did not enroll. Does that need to be factored into the spending analysis of increased spending as a result of new enrollees? The Medicaid “expansion” group, some 70,000 Rhode Islanders, probably represent a mix of traditionally eligible older adults and the younger, single adults, who are one of the key targets of the Affordable Care Act. Unless those data points are well detailed and explored [the study admitted that it guessed about what share of the number of new enrollees were working-age adults], the assumption that the additional utilization will mirror that which older adults in Medicaid have shown will lead to major bias.

7. What is the comparison of the costs incurred by those with chronic diseases, without access to health insurance or affordable health care, as a factor of both medical spending and economic growth in Rhode Island? Given that almost one out of every 10 Rhode Islanders will be diagnosed with diabetes in 2015, and diabetes consumes one out of every $5 spent on health care in the U.S., whatever increases there are in spending as a result of expansion by Medicaid may be completely offset by decreased spending on medical care on health care costs.

8. Unless the study looked at utilization rates for this expanded group of Medicaid enrollees, the researchers are making the assumption – perhaps faulty – that expenditures are evenly distributed and reflect medical utilization before expansion. The study needs to include more data to actually demonstrate added “costs” incurred by the expanded group.

9. Rhode Island’s managed Medicaid programs, such as RIte Care, focused on parents [mostly mothers] and children, has been shown to be an effective tool in managing costs, serving about 75 percent of the Medicaid population. The study’s use of the 18-65 age group, which it describes as its focus on the working age population, may need to be broken down and segmented differently to do a more accurate and complete economic analysis of the benefits of Medicaid spending, as related to consumer and household income, instead of comparing health insurance spending and health care spending in terms of GDP and total employment.

10. If the research study is revamped, and new analysis performed, it may want to look at the local experience of Blackstone Valley Community Health Care, a federally qualified community health center serving Central Falls and Pawtucket, that was able to bend its medical cost curve by $12 million over four years by the sophisticated integration of health IT at the point of care in a team-based approach. Indeed, the community care teams in South County and in Pawtucket being organized as part of the Care Transformation Collaborative are employing health IT platforms provided by Blackstone Valley.

11. Instead of analyzing the economic impact of increased Medicaid spending and its potential on growing or reducing the state’s economic growth based on employment and GDP, a better research question might be to look at how investments in place-based health at the community level can improve health costs, improve health outcomes, and decrease medical costs. The focus on “reducing” utilization as the key factor in “reducing” health care costs by decreasing Medicaid spending may be promoting a false paradigm in policy.