I recently attended a presentation by Bernard Black about a study he is working on where he evaluates the effect of health insurance on overall mortality and health among the near-elderly through an observational study using the Health Retirement Survey. He found that health insurance, in general, was not associated with differences in health outcomes, except for public insurance, which he found to be associated with higher mortality.
Black concluded that we would be better off without health insurance because it has either no effect, or perhaps even a negative effect, on population health. I’m not sure the observational study design he relies on supports such a strong causal inference, despite the sophisticated econometrics he employs. But I’ll leave the discussion about the internal and external validity of Black’s findings to the statisticians. I want to focus on his research question itself.
I find the question “what is the effect of health insurance on the health status of the near elderly” somewhat puzzling. In my view, health insurance is not a public health intervention or a healthcare service that is primarily meant to improve the health of any recipient; it’s really just a financial tool. Unlike iodizing salt or health education campaigns, we have no reason to expect that health insurance itself will improve the health of the average person.
Most people (including the near elderly) simply don’t need medical care in any given year, whether or not they have health insurance. Some people (i.e. those who can afford it) who need to go to the doctor in any given year will do so, whether or not they have health insurance. Most of the time, going to the doctor does not have an impact on your health that would show up on in a survey study (ex. it’s hard to measure functional or quality-of-life improvements). All of this suggests that having health insurance will not make a measurable difference on the overall health status in a population.
I’ll be more explicit: The way I see it, the purpose of health insurance is (1) to protect poor, credit-constrained individuals who become seriously ill from having to endure preventable health outcomes for reasons of affordability of care, and (2) to smooth the overall long-run income in a population.
The intuition: (1) Insurance will not improve your health outcomes if you do not become seriously ill, or if you do but can afford effective healthcare; (2) effective healthcare for serious illness is so expensive that even wealthy (or non-credit-constrained) individuals will face undesirable shocks to their income if they become ill.
I therefore find it puzzling that researchers seek to evaluate whether we should promote health insurance by asking whether it has an impact on population health. In fact, health insurance would not work if everyone who got insured needed it and used it. Health insurance, like any other kind of insurance, only works if most of the people who are insured don’t actually end up needing/using it. People buy insurance because they don’t know if they will end up needing it or not, but insurance works only if a large portion of those who do purchase it end up not actually needing it. So in any insurance pool, you should expect most of the people in that pool are in fact healthy and will not benefit from having insurance.
Therefore, asking about the effect of health insurance on overall health outcomes in a population (and not asking about the effects of health insurance on their financial outcomes) stacks the deck against insurance–it’s asking only about something which health insurance does not purport to do. A more fair research question would ask about the effect of health insurance on the health outcomes of those who we anticipate would benefit from health insurance (i.e. credit-constrained individuals who cannot afford healthcare and are likely to become seriously ill), and/or about the effect of health insurance on overall financial outcomes.
Of course, it would certainly be very interesting if it turned out that health insurance, by itself, did have an impact on the health of the average person in any given population! But I believe it it is wrong to conclude that we would be better off without health insurance if it doesn’t.
It’s sort of like asking “are lawyers good at sophisticated econometric analyses?” It would certainly be most interesting if it turns out they are, as with Professor Black. But it would be unfair to conclude that we would be better off without lawyers if it turns out most of them aren’t.