John C. Goodman

Until now. What makes this week's study so different is a special set of circumstances that originated in the state of Oregon. A few years ago the state had a limited amount of money to expand its Medicaid program and the number of qualified people greatly exceeded the state's budget. The state responded to this dilemma by conducting a lottery. This made possible an ideal experiment in which the people who remained uninsured were no different from the people who were enrolled in Medicaid, except for the luck of the draw.

Thanks to a budget crunch in Oregon, scholars had the ability to do a double-blind study (the gold standard for researchers) and it came out very, very bad for the supporters of the new health reform law.

The study doesn't speculate on the reasons why, but I will.

The uninsured in this country have access to a patch work system of free care when they are unable to pay for it out of their own pockets. In Dallas, Texas, where I live, for example, the entire county is part of a health district which makes indigent health care available to needy families. It covers people up to 250% of the poverty level, with sliding scale co-payments, based on family income. Parkland Memorial Hospital and its satellite clinics is the primary provider.

You could argue that uninsured, low-income families in Dallas are actually "insured" in this way, although they face the problems of rationing by waiting and other non-price barriers to care. Officially, they are counted as "uninsured," however. When these very same individuals enroll in Medicaid, they enter another system of patchwork care. A third of the doctors aren't taking any new Medicaid patients, for example. There is rationing by waiting in Medicaid along with its non-price barriers to care. Often, the uninsured and Medicaid enrollees are getting the same care from the same doctors and facilities ? even though one group is labeled "insured" and the other "uninsured."

A similar description applies to Massachusetts. RomneyCare cut the official "uninsurance" rate in half. But it created no new doctors or nurses or clinics. As far as I can tell, the same people are going to the same places and getting pretty much the same care that they got before the health reform. Hospital emergency room traffic is higher than it was before the reform. The traffic to the community health centers has changed very little.

But since they have expanded health insurance in Massachusetts, the demand for care has grown, even as the supply has remained unchanged. As a result, the time price of care has increased. The wait to see a new doctor in Boston is two months ? the longest waiting time in the entire country. People are getting the same care they got before, but they are paying a higher price for it.

I expect to see the Massachusetts results replicated nationwide.


John C. Goodman

John C. Goodman is Senior Fellow at The Independent Institute and author of the widely acclaimed book, Priceless: Curing the Healthcare Crisis. The Wall Street Journal and National Journal, among other media, have called him the "Father of Health Savings Accounts."