No, it doesn't paint medicine as a huge fraud. For example, suppose people without insurance already do have access to non-emergency medical treatment. Then giving them insurance will not make them healthier - it will only make them wealthier.
So that's part of what happened - if you look at the data, both the control and treatment group did consume medicine. You don't need insurance to get treated. But medical consumption increased in the treatment group - it just didn't improve health. That suggests medicine has a point of diminishing returns, and people without insurance already consume enough to reach that point.
(Also, a caveat: the Oregon Experiment was too short to measure an effect on life expectancy. They measured several other proxy health measures instead.)
So that's part of what happened - if you look at the data, both the control and treatment group did consume medicine. You don't need insurance to get treated. But medical consumption increased in the treatment group - it just didn't improve health. That suggests medicine has a point of diminishing returns, and people without insurance already consume enough to reach that point.
(Also, a caveat: the Oregon Experiment was too short to measure an effect on life expectancy. They measured several other proxy health measures instead.)