Uninsured Health Care Spending: $30 Billion Out of Pocket

There is a new report from researchers at George Mason University in Fairfax, VA, and the Urban Institute think tank in Washington, D.C. The findings are disturbing. Discussions about health care costs are generally an unsettling course of conversation these days. The dollar signs seem to keep mounting up.

Jane Zhang of The Wall Street Journal reports:

Americans who lack health insurance will spend about $30 billion out of pocket on medical care this year, but others -- mainly the government -- will end up covering another $56 billion in costs, according to a new study.

A grand total of $86 billion? That is quite a pretty penny. The health care equation is most certainly one that tends to produce and incredible amount of dollar signs. Let's take a look at a bit more detail:

The new study estimates the government pays 75%, or $42.9 billion, of the amount uninsured patients can't pay -- through Medicaid, the federal-state health-insurance for the poor and Medicare, the federal program for the elderly and disabled, as well as state and local taxes.

So if the government is paying, that means the money is ultimately coming out of the pockets of the taxpayers. State and local taxes are just the beginning. The other programs listed above all derive their revenue from the tax base as well.

There are a huge variety of factors that play into the final cost of any health care procedure, payment rates tend to fluctuate according to the method by which they are negotiated. The complexity of the issue is succinctly set forth later in Ms. Zhang's article:

Complicating the measure: Some doctors and hospitals donate time and forgo profit to cover poor people, and in some cases private donations cover the costs. Just how much money doctors and hospitals lose in caring for the uninsured is difficult to pin down, partly because group plans often negotiate lower payment rates than other consumers are billed. For this study, Mr. Hadley of George Mason University defined uncompensated care as the difference between how much the uninsured paid and what the providers would have received had those patients been privately insured.

So the net end result, according to the study, is that the majority of the monies used to defray the health care costs of the uninsured end up showing vastly more of an impact on our taxes than on the insurance premiums of those with private policies.

It is predicted that this report in conjunction with the two being released by the Census Bureau today will re-energize the debate about health care reform and health care costs. The Census Bureau reports will focus on income, poverty and the uninsured, and are sure to bring more attention to the issues covered here.

SOURCE: "Uninsured to Spend $30 Billion, Study Says" 08/25/08
photo courtesy of Saad.Akhtar, used under its Creative Commons license

Health Care Access: Steadily Deteriorating Since 2003!

AMedNews calls itself "The Newspaper for America's Physicians." A trade publication for Health Care Providers, they tend to cover topics pertinent to this blog. Hardly shocking.

This time they bring us a bit of news that is shocking, or at least highly disturbing, especially in light of many topics we have covered here in the past. The article's subtitle is an excellent summation: "One report finds that millions more insured patients are delaying or not getting care, while another shows a spike in 'underinsured' Americans."

Doug Trapp brings us the findings and analysis:

One in five Americans -- 59 million people -- reported delaying or not getting needed health care in 2007, up from one in seven in 2003, found a June 26 Center for Studying Health System Change report. "We've been tracking access to care for 10 years, and this is by far the biggest change that we've seen in those 10 years," said Peter Cunningham, PhD, study co-author and senior fellow at the center. Of those reporting an access problem last year, 43.5 million had insurance, compared with 25.9 million in 2003.

In a similar vein, the number of underinsured -- steadily insured people who paid significant out-of-pocket costs for health care -- reached 25.2 million people in 2007, up from 15.6 million in 2003, according to an analysis by the Commonwealth Fund published online June 10 in the journal Health Affairs.

As always when examining the state of the current system, the hard numbers are disheartening. According to Mr. Trapp's reporting, a significant number of those uninsured are among those who earned 200% of the federally determined poverty level.

Access is an issue, now more than ever:

The center's report found growing access problems for children. Among all children, 3.9% had an unmet health care need in 2007, up from 2.2% in 2003 and 3.2% in 1996-97. Cunningham said children's access likely is being affected by the higher insurance costs their parents are facing.

Some people with access problems had trouble making or getting to medical appointments, the center reported. Fifty-eight percent of adults with access problems said the health system was a reason. Of those, 28.6% said they could not get to a doctor's office or clinic when it was open.

"This report is really a warning about seismic change in our health care system," said David Colby, PhD, vice president for research and evaluation at the Robert Wood Johnson Foundation, which funded the center's study. "With each passing year, more Americans are really falling behind when it comes to getting the medical care they need."

The reports he refers to show that cost of care, that consistent bugaboo, once again rears its ugly head as the culprit. Larger deductibles, tighter spending limits, and other factors being introduced on the insurance end of the equation are creating a prohibitive environment for health care access. This is something pointed towards by prior studies, but now is documented.
In addition, the Commonwealth Fund report noted a 62% jump in uninsured adults during the 2003-2007 period studied. I cannot help but wonder if those individuals are included in the oft-quoted number of 47 million uninsured Americans.

The article contains a wealth of information and documentation including a supplement at the end which presents the statistical data as a series of graphs and additional links to source data and online discussions.
SOURCE: "Health care access problems surge among insured Americans" 07/21/08
photo courtesy of FuzzCaminske, used under its Creative Commons license

Putting a Face on Health Care Reform

As the debate about health care reform continues to evolve, we see many facets of the issue examined. Political platforms are dissected, technology based solutions debated, costs analyzed, and statistics quoted in every variety of media the U.S. consumes. Amidst the maelstrom of numbers, it seems to sometimes get lost that the reason we need reform is people. People such as the ones Kristen Gerencher writes about in MarketWatch:

At age 49, small-business owner Jacqueline Church Simonds doesn't want to gamble by going without health insurance but she considers the price she pays for that peace of mind exorbitant.

She transitioned from COBRA seven years ago when her husband left his job and employer-sponsored coverage behind so they could start a business together. They now pay $1,300 a month -- $15,600 a year -- for a small-group PPO policy that covers the two of them, she said. With costs soaring and consumers asked to make more decisions, you need up-to-date health advice.

She looked into health savings accounts but found that having to pay full price for services would leave them with no savings, and the couple hasn't found a more affordable comprehensive option because of their health histories, she said.

"We decided we didn't want to be self-employed and have no insurance," said Simonds, vice president of Beagle Bay Inc., a book publisher and distribution company in Reno, Nev. "Because of that we probably had our nose rubbed in the inequalities and inefficiencies of the system more than most people."

The article gives us a personal view into the lives of three different Americans who have run up against the brick wall of our "non-system" of health care. As awareness of the weaknesses in health care delivery enter the mainstream consciousness, people are getting nervous.

A survey of 1,200 adults in the March issue of Consumer Reports found that six guaranteed principles for health reform garnered more than 80% approval. They were: coverage for all uninsured children; protection against financial ruin due to a major illness or accident; the ability to obtain coverage regardless of a preexisting condition; coverage that continues even when people are laid off, change jobs or start their own business; premiums, deductibles and out-of-pocket expenses that are affordable relative to family income; and the ability to keep current health coverage if desired.

"People are becoming more and more aware of how vulnerable they are to a hugely expensive medical episode," said Nancy Metcalf, senior project editor at Consumer Reports in Yonkers, N.Y. "They're starting to see insurance isn't helping them out as much as they thought it would."

Gerencher helps us to put a face on health care reform. The unfortunate thing is that the face is one creased with worry as it stares at a medical bill.

SOURCE: "Confronting health care's inequities: Three middle-class workers struggle with high costs, limited coverage" 02/20/08
Photo Courtesy of atul666 used under this Creative Commons license

How To Save 88 Billion Dollars

Today the Health Care Reform Now! Blog is happy to share a multimedia extravaganza with our readers. The Commonwealth Fund's Commission on a High Performance Health System has released their report, Bending the Curve: Options for Achieving Savings and Improving Value in Health Spending, which shares savings estimates for 15 federal policy options over the next decade. The study examines the overall effect of many health care proposals put forth by the various U.S. Presidential candidates, as well as going into detail on the ramifications for all levels of government, average American households and private payers.

From the report's executive summary:

U.S. health spending is projected to increase from 16 percent of GDP in 2006 to 20 percent in 2016—from $2 trillion to $4 trillion. Meanwhile, the number of uninsured Americans continues to rise. In this report prepared for The Commonwealth Fund Commission on a High Performance Health System, the authors examine 15 federal policy options that have the potential to lower health spending relative to projected trends. They include policies that would: produce and use better information for health care decision-making, promote health and enhance disease prevention, align financial incentives with quality and efficiency, and correct price signals in health care markets. Combining policies would capture the synergistic benefits of individual changes. If implemented along with universal health insurance, a combination of selected options could save $1.5 trillion in national health expenditures over 10 years, while also improving value in terms of access, quality, and health care outcomes.

What does this have to do with multimedia you ask? To start off with here is a link to the video webcast of the report's unveiling which includes Commonwealth Fund President Karen Davis, Senior Commonwealth Fund Vice President Cathy Schoen, and President/CEO of the Employee Benefit Research Institute Dallas Salisbury as speakers.

For something a little bit more directly interactive the Commonwealth Fund team has thoughtfully provided an interactive matrix that will allow you to rapidly zero in on whatever particular aspect of the report most interests you. As you click through the various subheadings not only do you get a wealth of information, but also a striking array of graphs that present the data visually.

The report's executive summary contains not only all the raw data one would expect, but also a wide variety of PDFs that reconfigure the information in myriad ways for a variety of needs. The report itself and the executive summary are available as separate downloads, while the "chartpack," can be downloaded either as a PDF or as a PowerPoint Presentation. Many related publication and programs are also linked on this page as well. Whatever else you might say, The Commonwealth Fund makes it very easy to access their findings. This is only appropriate since one of their main assertions is that information technology is crucial as far as reducing overall costs is concerned:

Accelerate provider adoption of health information technology (HIT) with the capacity for decision support and to share patient health information across sites of care, financed by an assessment of 1 percent on insurance premiums and Medicare outlays. After initial investment costs, estimated net health system savings could reach $88 billion over 10 years as HIT capacity is improved. Net savings would accrue by year 10 to all except private payers, which would realize cumulative savings in following years.

(NOTE: Emphasis in the above quote is my own - GW)

SOURCE: "The Commonwealth Fund's Commission on a High Performance Health System"
SOURCE: "Bending the Curve: Options for Achieving Savings and Improving Value in Health Spending" 12/18/07
SOURCE: "Report Release On Estimated Savings From Specific Health Reform Options" 12/18/07
SOURCE: "Bending the Curve: Savings Matrix" 12/18/07
SOURCE: "Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending" 12/18/07
photo courtesy of Bending the Curve

Transparency: Health Care Cost and Performance

Today the San Francisco Chronicle brings us an excellent piece co-authored by Bill Novelli (CEO of AARP), James Guest (president and CEO of Consumer's Union and publisher of Consumer Reports) and Peter V. Lee (president and CEO of Pacific Business Group on Health). These three and their respective companies are pushing hard for certain modifications to the final version of California's health care reform legislation.

In short they are demanding that cost and performance data on service providers become publicly accessible.

Many people have fond memories of their grandparents. You probably remember your grandmother taking you shopping as a child at some point. If she was anything like my own grandmother she compared weights and prices and ingredients before deciding on her final purchase. She probably also expounded at length on the virtues of comparison-shopping, and rightly so.

The current state of the health care system here in the United States does not allow that sort of informed choice. This opacity is both counterintuitive and counterproductive. With more data transparency shopping for health care services will come to resemble other types of shopping, you will be able to compare and contrast what you will be receiving for your money.

Many hospitals and private providers are putting up a fight, lobbying for a voluntary program rather than a mandatory one. Novelli, Guest, and Lee take issue with this position stressing that voluntary programs cannot work due to lack of participation by providers.

They demand that certain things be included in the final legislation before it is signed into law:

• Stop compensating for quantity of medical procedures and instead focus on quality of care.


• Preventative care and management of chronic conditions should be encouraged, creating an overall improvement in patient health and a lowering of health care costs.


• Information technology should be used to create access to provider cost and quality data, allowing conservation of both lives and finances

Their summation shares many commonalities with Mr. Halvorson's Eight Developments that Make Health Care Reform Possible. Implementing this sort of transparency can help combat the lack of accountability and inefficiency of our current "non system."

SOURCE: "Health reform must make sure care cost and quality are made public" 12/06/07
photo courtesy of Karmelize, remixed by George Williams and used under this Creative Commons license