A disproportionate investment in health care wouldn’t necessarily be bad policy, if society believes health outcomes should be the safety net’s top priority. But Medicaid delivers poorly on that goal. A randomized controlled trial comparing outcomes for people in Oregon assigned to receive Medicaid or not found “no significant improvements in measured physical health outcomes in the first two years.”

In any case, the standard for policy makers should not be whether Medicaid spending achieves more than doing nothing. It should be whether some Medicaid funds could achieve more if they were spent elsewhere.

Researchers at the Yale School of Public Health attempted to address this question by comparing health outcomes in states that allocated relatively more or less social spending to health care compared with services such as housing and nutrition. They found that states spending a lower share on health care had significantly better health outcomes on a variety of measures, including mental health.

If the goal of social spending is defined as not just supporting the poor, but helping them move out of poverty, Medicaid’s dominance of the safety net seems even more misguided. A billion dollars spent almost anywhere — on housing, transportation, child care, education and training, apprenticeships, etc. — could better facilitate upward mobility.

States should be given the flexibility to move Medicaid dollars toward other antipoverty strategies.

One potential starting point: Let each state shift some Medicaid spending (and the matching federal dollars that come with it) into an expansion of its Earned Income Tax Credit to subsidize low-wage employment, or into clearing its housing-voucher waitlist. If successful, this approach could expand to encompass pools of resources trapped inefficiently in other antipoverty programs beyond Medicaid. States could even create safety net programs of their own to substitute for ineffective federal ones.

States that are happy with the status quo in Medicaid, and with their safety nets generally, could stand pat. But those that want to experiment with other strategies to help low-income households escape poverty should be allowed to try. As they learned what works and allow budgets to adjust accordingly, their dollars could achieve far more. Slowly, our badly tangled safety net might begin to reach further.

Oren Cass is a senior fellow at the Manhattan Institute. He wrote this for Bloomberg View.