Does Medicaid improve patient health outcomes?

While Medicaid is a public health insurance program designed to help the most vulnerable populations, it generally fails to meet its good intentions. Thus, reforming the current system ranks a higher priority.

Avik Roy, editor and principal author of Forbes’ Apothecary, just released Transcending Obamacare, a lengthy proposal on how states can realistically pivot towards decentralized health care delivery initiatives that ultimately reduces the number of uninsured and increases access to care – including those eligible for Medicaid.

The report cites numerous Medicaid studies – most of which will likely raise some eyebrows. See examples below, and click here to read more case study results.

  • A landmark study published in the New England Journal of Medicine compared health outcomes for Oregon residents who had won a lottery to enroll in that state’s Medicaid program with demographically similar residents who had lost the lottery and remained uninsured. After following these individuals for two years, the authors found that Medicaid “generated no significant improvement in measured physical outcomes” such as mortality, high blood pressure, high cholesterol, and diabetes.”
  • A University of Pennsylvania study published in Cancer found that, in patients undergoing surgery for colon cancer, the mortality rate was 2.8 percent for Medicaid patients, 2.2 percent for uninsured patients, and 0.9 percent for those with private insurance. The rate of surgical complications was highest for Medicaid, at 26.7 percent, as compared with 24.5 percent for the uninsured and 21.2 percent for the privately insured.

Commerce Department grew 67.5% in budget

In fiscal year 2014-15 Natural and Economic Resources spending within the General Fund increased by 9.7 percent, or $36 million.  That increase was mainly found in the Commerce Department’s budget, which had the largest increase within the Natural and Economic Resources budget category — 67.5 percent, or $34.6 million, over last year.

This increase was composed of $10 million set aside for film incentive grants, $20 million to be used for a job catalyst fund targeting the manufacturing industry, and $1.3 million to expand the Rural Economic Development Division’s grant programs.

Some other items within the Commerce Department’s budget are:

  • A total of $7.5 million is available for payments to Bridgestone, Goodyear, and Domtar for the 2013 grant year.
  • $5 million for the Industrial Commission
  • Eliminates funding for the Industrial Commission’s Investigation Management System, which was intended to process, prioritize, and track investigations by the Insurance Compliance Program.  The Commission is working with the Office of Information Technology Services to evaluate future system needs.
  • Spends $250,000 for contractual services to merge two information technology platforms (AccessNC and D4).  AccessNC inventories available business sites statewide and provides economic data to the public.  D4 publishes labor market data.
  • $200,000 is spent on a challenge grant for a study of the future use of Broughton Hospital facilities
  • Spending $250,000 to provide six months of funding to allow for the continuation of the NC Broadband program from January 1, 2015 through June 30th, due to federal funding ending on December 31, 2014.
  • Budgets $300,000 in nonrecurring receipts for the Apprenticeship Program from the Community Colleges System Office to offset forgone revenue for waived apprentice fees in FY 2014-15.  The Department of Commerce will evaluate the fee waivers effect on increasing participation in the program before requesting a permanent fee change.
  • Eliminated funding to ‘Ag in the Classroom’ program due to inability to spend funds
  • Appropriates $100,648 to fund three additional museums: Marbles in Raleigh, HandsOn! in Hendersonville, and Cowan in Kenansville.  Also eliminates funding to the Health Adventure museum in Asheville due to closure.
  • Provides $250,000 in funding to the Earl Scruggs Center to support activities related to the history and cultural traditions of Cleveland County

State Budget Process has changed

Policy changes are frequently included in the budget, and this year was no different. One of the more important items was a modification to the way the state budget is created. Historically the state’s budget development began with a continuation budget, which is a series of estimates of the amounts necessary to continue the same level of services in the next biennium as provided in the current fiscal year.1 This figure has caused confusion during the budget process, because some commentators and analysts characterize it as a baseline to show increased or decreased spending for an agency. The continuation budget figure was never an actual spending figure but only a calculation used for the budgeting process. Beginning in the 2015-17 biennium, the starting point for budgets will be the base budget,2 a more realistic starting point for budget writers because it represents actual spending figures from the prior year rather than arbitrary calculations and agency wish lists.

This change to the budgeting process should make comparisons from year to year easier and less confusing for budget writers, analysts, and citizens alike. It will also make political manipulation of the budget process more difficult.

Re: Judge declares vouchers for low-income children unconstitutional


Here’s a response from Senate leader Phil Berger, R-Rockingham:

“Today’s ruling by a single trial court judge advances a clear political agenda ahead of the needs of thousands of North Carolina children. We are committed to providing students a sound, basic education – and that’s the very reason we don’t want to trap disabled and underprivileged children in low-performing schools that are failing to deliver on that responsibility. This ruling yet again frustrates parents who desperately want to provide what’s best for their kids, and I hope we will move swiftly to appeal.”

The bad economics of the minimum wage

Today’s Wall Street Journal has a good piece by two young economists that attacks the flawed research purporting to show that raising the minimum wage does only good things. In the letter below, Professor Don Boudreaux comments further.

But before getting to Don’s letter, I’d like to say that the best argument against the minimum wage is not that it has harmful economic consequences, but that it is simply wrong for the state to punish anyone for entering into a peaceful labor contract. Doing so is no better than punishing someone for purchasing a book that  the politicians don’t want anyone to read.

Here’s the letter:

Editor, Wall Street Journal
1211 6th Ave.
New York, NY 10036

Dear Editor:

Kudos to George Mason University economics PhD student Liya Palagashvili and to her GMU econ undergraduate student Rachel Mace for exposing the flawed analyses of those who contend that recent hikes in some states’ minimum wages resulted in especially strong job growth in those states (“Do Higher Minimum Wages Create More Jobs?” August 21).

Yet another point deserves mention, one that I’m sure Liya and Rachel would have addressed had space allowed. Even if (contrary to Liya’s and Rachel’s finding) states that raised their minimum wages did indeed enjoy higher employment growth than did states that did not raise theirs, the foundational economic argument against the minimum still stands. That argument is that the minimum wage reduces the employment prospects of the lowest-skilled of low-skilled workers. It’s possible that raising the minimum wage attracts into the labor market so many employable higher-skilled workers, such as recent retirees, that the effect on overall employment is positive (or not negative) even though – as economics warns – many low-skilled workers are nevertheless pushed into the ranks of the long-term unemployed.

In short, the central economic argument against the minimum wage is not that it reduces overall employment (even though it likely does); rather, it’s that the minimum wage reduces the employment prospects of the people most desperately in need of jobs: workers with the fewest job skills.

Donald J. Boudreaux
Professor of Economics


Majority of Americans Favor Local Control of Public Schools

Yesterday, the 46th Annual PDK/Gallup Poll of the Public’s Attitudes Toward the Public Schools was released and the findings confirm Americans want Local School Boards to have the authority.

 When asked to reflect on who should have the greatest influence on what is taught in the public schools, Americans prefer local school boards over the federal government by a wide margin, 56% to 15%. Twenty-eight percent believe state government should have the greatest say on curriculum.

The use of Common Core Standards was also a topic on the poll.  The results show 59% of all Americans OPPOSE having the teachers in their community use the standards, while only 33% favor the new direction.  A  previous Rasmussen Poll  reflected the same trends, the more parents know about the standards, the more they do not like the standards.

The majority of those who have heard about the Common Core State Standards oppose their use to guide teaching, though opinions on this question are clearly divided along political party lines. While the Common Core Standards are not a federal initiative per se, Americans may see the program as overreaching. Those who oppose the standards for guiding teaching value teacher flexibility and perceive the standards as a threat to teachers’ autonomy in the classroom; and those who favor the Common Core see a framework for teaching that could address the well-documented achievement gap, increase rigor in lagging schools, and set students on equal footing with those in higher-achieving schools.

However,  the report says in summary:

 The jury is out about whether the initiative is making a positive impact on student learning.

The published results of this survey come before the first meeting of the Academic Standards Review Commission.

Judge declares vouchers for low-income children unconstitutional

This morning, Superior Court Judge Hobgood ruled that the Opportunity Scholarship Program is unconstitutional. He claims that the program does not serve a public purpose and creates an unequal, supposedly unaccountable, system of schools.

Let’s look back.  The action began in February when Judge Robert Hobgood issued an injunction that halted the state’s Opportunity Scholarship Program, a school choice initiative passed by the legislature and signed by the governor in 2013 that provides private school vouchers of up to $4,200 to eligible low-income families.

The N.C. State Education Assistance Authority, which administers the program, had received over 5,000 applications for approximately 2,400 vouchers, but Hobgood’s order put the program in a state of limbo.

John Hood was being kind when he observed that Judge Hobgood “ issued a poorly reasoned decision about the case.” John and my colleague Rick Henderson did a better job than anyone else trying to explain Judge Hobgood’s reasoning. Rick wrote,

What the judge appears to be arguing here is that because the 1971 Constitution is silent about a provision in the previous constitution that was illegal [the Pearsall Plan], then the current version of a law that is only marginally related to the provision that was illegal also must be illegal (even though he’s not ruling on the substance of the new law, I think).

The Pearsall Plan was an attempt to use vouchers to avoid integration efforts following the Brown v Board of Education decision in 1954. In 1969, Godwin v. Johnston County Board of Education declared the Pearsall Plan to be unconstitutional. The North Carolina Constitution of 1971 did not include any Pearsall-type provisions.

Hobgood argued that the non-existence of this unconstitutional provision in the 1971 state constitution meant that similar laws would be unconstitutional too. It was a case of “guilt by association,” even though the Opportunity Scholarship Program has almost nothing in common with the Pearsall Plan.

Although the N.C. Court of Appeals subsequently refused to lift Judge Hobgood’s order, the state Supreme Court eventually did. In response, Institute for Justice attorney Renee Flaherty commented, “The N.C. Supreme Court has sent the Court of Appeals a strong and unmistakable signal: This program should be allowed to go on.”

Before today, the question was whether Judge Hobgood received the signal as well? He subsequently denied a motion filed by voucher opponents to halt (again) distribution of approximately 2,400 vouchers for the coming school year. But he did so out of deference to his judicial superiors and not necessarily the merits of the defendants’ arguments.

The case went to trial and Judge Hobgood heard arguments on Tuesday. He issued his decision this morning.

Are North Carolinians paying for other state Medicaid expansions?

This month, the Urban Institute and Robert Wood Johnson Foundation released a report assessing the financial impacts of North Carolina’s decision to forgo the Affordable Care Act’s optional Medicaid expansion.

Extending eligibility levels of our broken – yes, broken medical assistance safety net would cost state taxpayers an additional $300 million per year, amounting to $3 billion to the General Fund books over the course of a decade. But because Medicaid is jointly funded, advocates brush that aside and are instead fixated on North Carolina losing out to roughly $40 billion worth of federal funds over the next ten years.

The argument goes that our citizens’ federal taxes are now paying for other states’ Medicaid expansions, without seeing any benefit themselves. Is North Carolina really “losing out”? The influx of federal funds is borrowed money. What’s really happening is that future generations are being taxed to broaden the safety net of our current generation, all the while adding more weight to our national deficit.

You can access the full report here.