Improving access to care for the uninsured and underinsured would

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					                                                        Research Paper 1

                     Research Paper:

Improved Access to Care for the Underinsured and Uninsured

                     Bethany Walker

                   HPA 520, Section 001

                      Mr. Meacham

                    November 28, 2006
                                                                                Research Paper 2

                                        Research Paper:

               Improved Access to Care for the Underinsured and Uninsured

       According to an article by Ayanian, Weissman, Schneider, Ginsburg and Zaslavsky,

(2000), “Many Americans have perceived being uninsured as a transient phenomenon without

significant consequences” (p. 2062). However, the lack of adequate health insurance coverage in

the United States is not a temporary or fleeting issue. Blumenthal (2001) asserts, “Educating the

public about the connection between controlling expenditures and ensuring access to care should

be a high priority for political leaders” (p. 768). The association between the high rate of the

underinsured and the uninsured and the increasing medical care costs in the United States is a

crucial correlation to understand. The number of uninsured in the United States and the total

spending on health care in the United States has increased throughout time. The problem of how

to deal with the uninsured is not going to disappear. The increasing number of uninsured can be

viewed as one cause of the consistent rise in total health care expenditures in the United States.

Also, increases in health care expenditures inevitably increase the number of uninsured;

employers cut back on health benefits and workers are unable to afford private health insurance

coverage (Blumenthal, 2001, p. 767).

       In relation to the preceding opening remarks, Schroeder (2001) points out that the “lack

of health insurance remains one of the most glaring examples of how the United States differs

from other countries” (p. 847). The vast majority of industrialized countries offer government

funded or guaranteed health care coverage, such as universal health insurance in Canada and the

National Health Service in the United Kingdom. As a result, these countries have been able to

more effectively control health care expenditures when compared to the United States.        This

amalgamation of government constraints on health care spending and guaranteed access to care
                                                                               Research Paper 3

control health care expenditures while decreasing inequalities in the health care system. The

primary drawback of this approach is political reaction; Americans are not willing to support a

government controlled health care system due to the general attitude against government

involvement (Blumenthal, 2001, p. 768) However, the fact still remains that the United States

consistently lags behind other industrialized countries in key measures of health status, such as

average life expectancy at birth, infant mortality rates and immunization levels (Schoen, Doty,

Collins & Holmgren, 2005, p. 277).

       When discussing improved access to medical care for the underinsured and uninsured, it

is important to determine the appropriate definition of access.       For the purposes of this

discussion, access to medical care involves sufficient resources, the process of care and the

appropriate type and level of care (Cunningham, 1997, p. 174). The three interacting elements of

access, cost and quality of medical care are important to all citizens of the United States,

including consumers of health care and health care providers. The United States population is

concerned with whether the increase in dollars spent on health services is proportionate to the

increase in quality of health status and appropriate access to health care (Anderson & Hussey,

2001, p. 230).

       This paper will focus on the case to expand access to care to the underinsured and

uninsured to reduce the long-term growth in total health care costs in the United States. First,

increasing access to care for these two underserved populations would decrease the number of

uncompensated care cases, thereby decreasing health care expenditures in the long-term (Hadley

& Holahan, 2003). Next, this development would also result in improved access to primary care

for these underserved individuals and, as an outcome of this, fewer unmet health needs, fewer

escalated and severe disease states and fewer avoidable hospital visits (Ayanian et al., 200).
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Finally, improving access to care in the United States for the underinsured and the uninsured will

have long-term health and economic benefits for the nation as a whole (Miller, Vigdor &

Manning, 2004).

                            United States Spending on Health Care

       According to data from the Organization for Economic Cooperation and Development

(OECD), total health care expenditures in the United States during 2002 accounted for 14.7% of

the gross domestic product (GDP). This percentage increased to 15.3% in 2004. As a measure

of per capita spending, health care expenditures were $5,324 in 2002 and $6,102 in 2004. The

United States is surpassing all other OECD countries in terms of percent of GDP spent on health

care and per capita spending on health care (“OECD,” 2006).

                                   Who are the Uninsured?

       In the United States, there are approximately 45 million Americans without health

insurance at any point in time (Schoen et al., 2005, p. 273). More than 80% of the uninsured

population comes from a family where at least one family member is actively employed

(Schroeder, 2001, p. 847). Health insurance status has an impact on the health of each person.

Individuals who have health insurance are more likely to receive more effective care and less

likely to delay obtaining necessary medical treatment (Schroeder, 2001, p. 848). Uninsured

individuals are more likely to have decreased access to preventive services and decreased access

to the treatment of chronic conditions. The uninsured are also more likely to account poor health

status, to delay seeking medical treatment and to forgo necessary care for serious conditions

(Ayanian et al., 2000, p. 2062).
                                                                               Research Paper 5

                                 Who are the Underinsured?

       The concept of being underinsured can be defined as “being insured all year but without

adequate financial protection” (Schoen et al, 2005, p. 273). To put differently, an individual is

underinsured if medical expenses consume more than 10% of his or her income. During 2003,

12% of insured adults were underinsured; this represents approximately sixteen million

individuals (Schoen et al, 2005, p. 273).   According to Schoen et al., “When uninsured adults

were added to those who were underinsured based on financial indicators . . . an estimated 61

million adults, or 35% of the population ages 19-64, had either no insurance, sporadic coverage

or insurance that exposed them to catastrophic medical costs during 2003” (p. 278). Again, the

number of underinsured and uninsured individuals in the United States is a growing problem

with severe consequences.

       Similar to those who are uninsured, underinsured adults are also more likely to go

without needed medical treatment. Schoen et al. (2005) asserts, “Without attention to insurance

adequacy and whether patients receive effective care, an increase in the number of underinsured

people could undermine health, productivity and financial security in the future” (p. 276). This

statement proves to be an imminent caution for what is yet to come for the United States health

care system.

                            Decrease in Uncompensated Care Cases

       First, increasing access to care for the underinsured and uninsured populations would

decrease the number of uncompensated care cases in the United States; therefore, this change

would result in a long-term decrease in total health care spending in the United States (Hadley &

Holahan, 2003). By expanding access to the underinsured and the uninsured, the United States

health care system would not be inundated with uncompensated care cases in the future.
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       To begin this point, it is necessary to identify “real increases in costs resulting from

expanded health insurance coverage from transfers of existing costs from one financing source to

another” (Hadley & Holahan, 2003, p. W66). Real increases in costs occur from increases in the

amount of care used by those insured.     For example, if an uninsured person becomes insured,

this person may consume more primary medical care. Cost transfers represent shifts from those

who presently pay for the care utilized by the uninsured to those who would pay if coverage

were expanded to the underinsured and uninsured. Noticeably, there would be various cost

transfers involved with expanding health insurance coverage to the 61 million Americans who

are underinsured and uninsured (Hadley & Holahan, 2003, p. W66).

       Based on data collected by the Medical Expenditure Panel Survey (MEPS) between 1996

and 1998 (updated to 2001 dollars), those who were uninsured during any portion of the year

received $99 billion in medical care; of this $99 billion, $35 billion was uncompensated care.

This is a combination of $24 billion in uncompensated care provide by hospitals, $6.5 billion in

uncompensated care provided by clinics and community health centers and $4.5 billion in

uncompensated care provided by physicians (Hadley & Holahan, 2003, p. W72). During these

same years, uncompensated care accounted for 60% of the care received by the full-year

uninsured. (Hadley & Holahan, 2003, p. W70). Hospitals would collect the greatest financial

benefit as a result of decreased uncompensated care cases. In addition to this:

       Another reason to prefer insurance over a patchwork of indirect and hidden subsidies to

       pay for uncompensated care is that payments would move with people and would be

       much better targeted to the providers actually providing the care. Current methods for

       allocating subsidies to hospitals, while generally on target, still overpay some institutions
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         and underpay others relative to the amounts of uncompensated care they provide (Hadley

         & Holahan, 2003, p. W79).

Hadley and Holahan also estimate that 50% of the present money spent on the uninsured is

already provided by government programs (p. W79). With this notion in mind, there is already a

significant amount of government funding in place to care for the uninsured. The potential short-

term cost transfers would be less than the long-term financial benefits of improved access to

health care for the underinsured and uninsured.

                               Improved Access to Primary Care

         Second, increasing access to care for these underserved populations would result in

improved access to primary care for these individuals and a decrease in the number of unmet

health needs, escalated and severe disease states and avoidable hospital visits over the long-term.

Uninsured individuals have a difficult time obtaining primary care services (Schroeder, 2005, p.

848). In a study by Ayanian et al. (2000), approximately 69% of long-term uninsured adults

reported cost barriers to needed care, while only 16% of insured adults reported this concern (p.

2065).    According to Berk and       Monheit (2001), “Some population groups are obtaining

excessive care with benefits not commensurate with costs, that other groups may be under using

medical care and that overall social welfare might be enhanced through a reallocation of

resources from the former group to the latter” (p. 10). To put differently, the United States

health care system is providing too much medical care to some people and not enough medical

care to other people. This is a cause for concern in regards to the proper allocation of resources

and the equitable distribution of medical care services.

         In relation to Berk and Monheit’s comment, E. Book argues (2005), “Unless we’re

willing to limit the care that the well insured can use, we’ll always have disparities in health care
                                                                                   Research Paper 8

access . . . But that does not mean that we should tolerate disparities in access to a basic level of

care” (p. W578).     E. Book stands by the argument that health care access for the entire

population is a shared responsibility, or a social good; real cost containment should be built into

the foundation of the expanded health care system. Although these changes may cost more in

the short-term, the changes will capitulate considerable benefits over time.

       E. Book continues to assert that if an increasing number of “Americans lack meaningful

access to basic care, the public health and emergency systems upon which we all rely will be

strained beyond the breaking point” (p. W579). Again, this is an impending warning of what is

to come for the American health care system.           Because the uninsured regularly rely on

emergency departments for primary care services, these departments will eventually crush

beneath the weight of 61 million underinsured and uninsured Americans. To accompany this,

Mongan and Lee (2005) presage, “Even with a willingness to let health care continue to increase

as a percentage of the gross national product, we may well find that at some point we will need

to limit or ration services” (p. 1263). The United States will continue to spend more and more on

health care while reducing access to essential medical care services at the same time.

                            National Health and Economic Benefits

       Finally, improving access to care in the United States for the underinsured and the

uninsured will result in long-term health and economic benefits for the nation as a whole. There

are various costs as a result of the lack of health insurance to the American society. Some of

these “spillover” costs include: higher taxes, higher public program costs with inferior health,

decreased workforce productivity and reduced social capital (Miller et al., 2004).

       Mongan and Lee (2005) emphasize, Americans “have a historical and cultural bias

against large, intrusive regulatory actions undertaken by the government, especially when they
                                                                                 Research Paper 9

involve increasing taxes” (p. 1261). According to Hadley and Holahan (2003), “The overall

impact of expanded coverage on total health care costs, an increase of $35-$70 billion, is actually

relatively small, accounting for roughly 3% to 6% of total health care spending” (W263).

Hadley and Holahan add to their viewpoint by stating, “An expansion of this magnitude would

increase health spending’s share of the GDP by less than one percentage point. . .The cost of

expanding insurance coverage may be a relatively small or at least a very worthwhile

investment” (W263).     Americans will become more productive in their day-to-day living and

would benefit from an increased life expectancy, improved health and a greater national income

(Hadley & Holahan, 2003, W263).

       In accordance with the prior argument, Mongan and Lee (2005) state, “The Committee

on the Consequences of Uninsurance estimated          that diminished health due to inadequate

insurance leads to societal costs of $65 billion to $130 billion per year” (p. 1262). Miller et al.

(2004) write, “Probably the greatest cost of the lack of health insurance is the poorer health and

shorter lives of people without coverage. Conversely, the greatest benefit of universal coverage

would likely be the improvements in health and longevity among those who otherwise would be

uninsured” (W158). To strengthen this argument, Miller et al. append, “The social investment

needed to expand an insured level of health care to the uninsured is likely to produce gains in

better health and longevity well in excess of the incremental societal costs of increased use and

services” (Miller et al. 2004 p. W158).      Again, in the long-term, the expansion of health

insurance to the underinsured and the uninsured would result in financial viability for the United

States health care system.
                                                                              Research Paper 10


       To conclude, Schoen et al. (2005) maintains, “The United States may well be on a path to

where it becomes harder to distinguish the insured from the uninsured if insurance no longer

provides either access or financial protection” (p. 284). There is an increasing requirement, now

and into the future, for collective action to address health care inequalities and health care

expenditures. Without this consensus, “effective restraints on national health care expenditures

are likely to be elusive” (Blumenthal, 2001, p. 767).    Whatever side of the debate regarding

expanding access for the underinsured and uninsured an individual agrees with, there is a need to

do something about the uninsured and the continuously expanding expenditures on health care in

the United States. Taking no extreme view on the issue, it is important to note that every health

care system has flaws, redundancies and gaps. As the health care system in the United States is a

dynamic system, it is essential to remain up-to-date with current trends, studies and issues.

Everyone wants something different from their health care system, whether the system is mostly

in the public sector or mostly in the private sector; however, one common thread is that people

want to be served well by their medical care system. Efficiency is of utmost importance and

cost, quality and access are consistent interacting elements across any health care system. By

improving access to care for the 61 million underinsured and uninsured Americans, the United

States health care system would reduce the growth in total health care costs in the long-term. To

achieve this notion, it is critical to remember the potential advantages of expanded health care

coverage including decreases in uncompensated care cases, increases in access to primary care

and an improved health and economy of the nation.
                                                                                Research Paper 11


Anderson, G. & Hussey, P.S. (2001) “Comparing Health System Performance in OECD

       Countries.” [Electronic Version]. Health Affairs. 20 (3), pp. 219-232.

Ayanian, J.Z., Weissman, J.S., Schneider, E.C., Ginsburg, J.A. & Zaslavsky, A.M. (2000).

       “Unmet Health Needs of Uninsured Adults in the United States.” [Electronic Version]

       Journal of the American Medical Association. 284 (16), pp. 2061-2069.

Berk, M.L. & Monheit, A.C. (2001) “The Concentration of Health Care Expenditures,

       Revisited.” [Electronic Version] Health Affairs. 20 (2), pp. 9-18.

Blumenthal, D. (2001). “Health Policy 2001: Controlling Health Care Expenditures.”

       [Electronic Version]. New England Journal of Medicine. 344 (10), pp. 766-769.

Book, E.L. “Health Insurance Trends are Contributing to Growing Health Care

       Inequality.” Health Affairs. Web Exclusives (2005): W577-W579.

Cunningham, P.J. & Ha, T.T. (1997). “A Changing Picture of Uncompensated Care.”

       [Electronic Version]. Health Affairs. 16 (4), pp. 167-175.

Hadley, J. & Holahan, J. “Covering the Uninsured: How Much Would it Cost?” Health

       Affairs. Web Exclusives (2003): W250-W265.

Hadley, J. & Holahan, J. “ How Much Medical Care do the Uninsured Use, And Who

       Pays for it?” Health Affairs. Web Exclusives (2003): W66-W81.

Miller, W., Vigdor, E.R., & Manning, W.G. “Covering the Uninsured: What is it

       Worth?” Health Affairs. Web Exclusives (2004): W157-W167.

Mongan, J.J. & Lee, T.H. (2005) “Do We Really Want Broad Access to Health Care?”

       [Electronic Version]. The New England Journal of Medicine. 352 (12), pp. 1260-1264.
                                                                          Research Paper 12

OECD Health Data. Update released on October 17, 2006. Retrieved November 20,

       2006, from

Schoen, C., Doty, M.M, Collins, S.R. & Holmgren, A.L. (2005) “Insured But Not Protected:

       How Many Adults are Underinsured?” [Electronic Version]. Health Affairs. 24, pp.


Schroeder, S.A. (2001) “Health Policy 2001: Prospects for Expanding Health Insurance

       Coverage.” [Electronic Version]. The New England Journal of Medicine. 344 (11), pp.


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