Is expanding Medicare coverage cost-effective?

Cost-effectiveness of national health insurance programs in high-income countries: A systematic review

OBJECTIVES

National health insurance is now common in most developed countries. This study reviews the evidence and synthesizes the cost-effectiveness information for national health insurance or disability insurance programs across high-income countries.

DATA SOURCES

A literature search using health, economics and systematic review electronic databases (PubMed, Embase, Medline, Econlit, RepEc, Cochrane library and Campbell library), was conducted from April to October 2015.

STUDY SELECTION

Two reviewers independently selected relevant studies by applying screening criteria to the title and keywords fields, followed by a detailed examination of abstracts.

DATA EXTRACTION

Studies were selected for data extraction using a quality assessment form consisting of five questions. Only studies with positive answers to all five screening questions were selected for data extraction. Data were entered into a data extraction form by one reviewer and verified by another.

EVIDENCE SYNTHESIS

Data on costs and quality of life in control and treatment groups were used to draw distributions for synthesis. We chose the log-normal distribution for both cost and quality-of-life data to reflect non-negative value and high skew. The results were synthesized using a Monte Carlo simulation, with 10,000 repetitions, to estimate the overall cost-effectiveness of national health insurance programs.

RESULTS

Four studies from the United States that examined the cost-effectiveness of national health insurance were included in the review. One study examined the effects of medical expenditure, and the remaining studies examined the cost-effectiveness of health insurance reforms. The incremental cost-effectiveness ratio (ICER) ranged from US$23,000 to US$64,000 per QALY. The combined results showed that national health insurance is associated with an average incremental cost-effectiveness ratio of US$51,300 per quality-adjusted life year (QALY). Based on the standard threshold for cost-effectiveness, national insurance programs are cost-effective interventions.

CONCLUSIONS

Although national health insurance programs have been introduced in most developed countries, only a few studies have examined their cost-effectiveness. All the selected studies revealed strong evidence to support health insurance programs or health reforms in the United States. The average ICER in this study is below the standard threshold for cost-effectiveness used in the US. The small number of relevant studies is the main limitation of this study.

Estimating the Effect of Health Insurance on Personal Prescription Drug Importation

Personal prescription drug importation occurs in the United States because of the high cost of U.S. medicines and lower cost of foreign equivalents. Importation carries a risk of exposure to counterfeit (i.e., falsified, fraudulent), adulterated, and substandard drugs. Inadequate health insurance may increase the risk of importation. We use inverse probability weighted marginal structural models and data on 87,494 individuals from the 2011-2013 National Health Interview Survey to estimate the marginal association between no health insurance and importation within U.S. subpopulations. The marginal prevalence difference [95% confidence limits] for those without (prevalence = 0.031) versus those with health insurance was 0.016 [0.011, 0.021]. The prevalence difference was higher among persons who were Hispanic, born in Latin America, Russia, or Europe, traveled to developing countries, and did not use the Internet to fill prescriptions or to find health information. Health insurance coverage may effectively reduce importation, especially among particular subpopulations.

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

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.

Cost offsets to medicare attributable to receipt of hip, knee, and shoulder arthroplasty

OBJECTIVE

To estimate trends in numbers of and Medicare payments for hip, knee, and shoulder arthroplasties for beneficiaries with osteoarthritis (OA) and potential savings to Medicare from arthroplasty during followup.

METHODS

The analysis was based on longitudinal 5% Medicare enrollment and claims data for 1992-2010. The analysis of changes in Medicare payments attributable to total arthroplasty receipt used propensity score matching to obtain beneficiary control groups matched on demographic characteristics, general health, joint pain, and Medicare payments by major condition in the year preceding the index arthroplasty. An average treatment effect on the treated (ATT) overall and for each major condition was calculated for payments for care 7-36 months following the index arthroplasty procedure.

RESULTS

Growth in incident OA diagnoses of the hip, knee, and shoulder was substantially higher than growth in real Medicare spending on hip, knee, and shoulder arthroplasties. ATTs showed a mean saving to Medicare of $471/beneficiary/procedure for hip, no difference for knee, and a payment increase of $1,062 for shoulder arthroplasty during followup. For hip arthroplasty, the largest savings was for the circulatory system. For shoulder arthroplasty, increased payments during followup reflected increased payments for musculoskeletal care, especially for hip and knee arthroplasty. Overall, payment differences during followup by major condition were small.

CONCLUSIONS

Provision of hip but not knee and shoulder arthroplasty generated savings to Medicare during followup, but even for hip arthroplasty, the cost offset during followup was small relative to the program cost for the procedure itself.