Last week, I asked Jim Manzi for his thoughts on the Oregon health care experiment. Manzi is a very smart guy who has founded a very successful company that helps other companies do experiments. He is also the author of the terrific Uncontrolled, a book about using randomized controlled trials to improve business, policy, and life in general. Jim was kind enough to send me his very long, very smart, very wonkish thoughts, which you’ll see below. If you have any interest in Oregon, or just want to be smarter about issues in evaluating social science, you should read this all the way through.
Some Observations on the Oregon Health Experiment
As a vocal proponent of using randomized experiments to inform policy debates, I have followed the discussion surrounding the recent Oregon Experiment with great interest. I think the only thing I’ve previously written for publication on the topic of health care finance was a review of the RAND Health Insurance Experiment. This is the only other randomized experiment of which I am aware that tested the impacts of varying levels of generosity of health care coverage on physical health. The RAND experiment concluded that (1) lower levels of coverage “reduced the use of nearly all health services,” but that (2) this reduction in services “had no adverse effect on participants’ health.” As a casual observer of the topic, that struck me as a fairly important result.
The Oregon Experiment has replicated the first part the first part of the RAND result: Providing free health care coverage increased the use of health care services. However, a debate has arisen between Austin Frakt, Kevin Drum, Avik Roy, Megan and others around the second part: Did this increase in use of health care services lead to measurable improvements in physical health?
This debate has been very informative, but here a few key points that I don’t think have been very widely noted:
1. Almost half the people who were offered free health insurance coverage didn’t bother to send back the application to get it.
About 90,000 people applied for the health insurance lottery (though selection was done at the household level). About 35,000 people won the lottery, and thus had the right to submit an application, but only about 60% of these lottery winners actually sent the application back. This ought to tell any common sense person a lot about the revealed preference for how much the uninsured value the coverage on offer.