A Shared Destiny: Effects of Uninsurance on Individuals, Families, and Communities
Arthur L. Kellermann, M.D., M.P.H.
Co-Chair of the Committee on the Consequences of Uninsurance
Institute of Medicine/The National Academies
Chair, Department of Emergency Medicine, Emory University School of Medicine
Director, Center for Injury Control, Rollins School of Public Health, Emory University
Subcommittee on Labor, Health and Human Services, and Education
Committee on Appropriations
April 30, 2003
Good morning, Mr. Chairman and members of the Subcommittee. My name is Arthur Kellermann. I am chair of the Department of Emergency Medicine, Emory University School of Medicine and Director of the Center for Injury Control, Rollins School of Public Health, Emory University. I also serve as Co-Chair of the Committee on the Consequences of Uninsurance of the Institute of Medicine. The IOM is part of the National Academies, originally chartered as the National Academy of Sciences by Congress in 1863 to advise the government on matters of science and technology.
Over the past two years, this Committee has systematically studied the consequences that lack of health insurance poses for individuals, families, entire communities, and our society. After a brief downturn at the end of the 90’s, the number of uninsured has resumed growth and now stands at over 41 million persons –roughly 16.5 percent of the U.S. population under age 65. The committee is supported by the Robert Wood Johnson Foundation and to date has issued 4 of its 6 planned reports. Our fourth report, entitled A Shared Destiny: Community Effects of Uninsurance, was released last month. Two more reports will follow this year. The fifth will estimate the economic and social costs resulting from uninsurance nationally. Our sixth and final report will present principles for assessing the potential impact of various strategies to expand coverage.
With the release of the 4 reports we have produced to date on the consequences of uninsurance, our Committee has provided the most complete, evidence-based picture of the many adverse effects of uninsurance - from the impacts on individuals to the effects on families, to the consequences for entire communities. In these reports, the committee has reached four main conclusions:
· First, people are not uninsured by choice. Most are uninsured because insurance is not offered by their employer or coverage is unaffordable.
· Second, health insurance contributes to improved health outcomes for children and adults. Conversely, uninsured people are more likely to receive too little medical care and to receive it too late, and as a result, they tend to be sicker and to die sooner.
· Third, when even one member of a family lacks coverage, it can jeopardize the health and financial well-being of the entire family, including insured members.
· Fourth, uninsurance can adversely affect the financial viability of a community's health care institutions and providers. This can result in reduced access to primary care, specialty services, and hospital care, particularly emergency medical services and trauma care.
The nation's more than 41 million uninsured persons are not isolated individuals. They are members of communities. In our 4th report, A Shared Destiny, we conclude that uninsurance has serious community wide effects. Based on our findings, we believe that it is both mistaken and dangerous to assume that the prevalence of uninsurance in the United States harms only those who are uninsured. In our report, we cite evidence that the financial strain of treating large numbers of people without health insurance can hurt the viability of local governments and local health care providers. This can produce "spillover effects" across the community, including reduced access to emergency services and trauma care, loss of access to specialists, and reduced availability of hospital-based services. These effects can compromise access to health care community-wide, and ultimately damage a community's economy. In this report, our Committee establishes a framework for thinking about how the effects of uninsurance ripple throughout communities. We also assess the existing base of evidence and propose a research agenda to learn more about community-level effects.
The presence of a large uninsured population can affect an entire community's access to health care because the delivery of care to the insured and the uninsured is interrelated. This connection is evident if we examine the streams of funding that pay for uncompensated care. When the proportion of uninsured residents increases, or revenue from other sources such as private insurance is reduced, providing uncompensated care to uninsured people has a severe financial impact on health care institutions and providers.
Over the past 25 years, public policies to control health care costs, including promotion of competitive health care markets, have constrained the amounts that insurers pay to providers. This has eroded the financial support that allowed providers to subsidize their uncompensated care. The effects of this erosion have been felt more strongly in communities with large or growing uninsured populations, particularly inner city neighborhoods and rural areas as well as parts of the health care system that serve large numbers of uninsured people, such as public hospitals.
Responsibility for financing and delivering care to the uninsured in the United States is fragmented and ill-defined. As a result, many state, county, and municipal facilities serve as providers by default. The patchwork of federal, state, and local requirements for provision of minimal services typically do not specify the scope of benefits, or guarantee that providers will be reimbursed. Public funding for safety-net care is considerable, accounting for up to 85 percent of the estimated $34 billion to $38 billion in uncompensated care costs incurred by uninsured patients in 2001. However, there is little evidence that the public funds that pay for the bulk of uncompensated medical care for uninsured patients are being allocated or targeted efficiently.
In A Shared Destiny, we find that uninsurance had adverse impacts on ambulatory care:
· Individuals in lower-income families, nearly one-third of whom are uninsured, delay seeking care or go without needed care more often in communities with high rates of uninsurance than do their counterparts in communities with fewer uninsured members.
· Community health centers that serve a large or increasing number of uninsured people report that their capacity to provide primary care to their clients, insured as well as uninsured, is becoming increasingly strained.
Uninsurance can place a severe financial stress on hospital outpatient and inpatient departments, sometimes resulting in fewer available services. For example,
· In contrast to the rest of our health care system, hospital emergency departments or ERs are required by federal law to care for everyone in need, without regard to their ability to pay. Yet in recent years, ERs have become terribly crowded, reducing everyone’s access to life-saving care. Uninsurance is not the primary cause of overcrowding in hospital ERs, but rising uninsured rates can worsen emergency room overcrowding and add financial strain on hospitals. Trauma centers are affected as well. Because trauma victims are more likely to be uninsured, hospitals in communities with large numbers of uninsured may decline to open a trauma center, or decide to scale back or close an existing center in response to financial stress.
· Higher rates of uninsurance in communities are associated with decreased availability of on-call specialists to hospital ERs. Primary care providers also report difficulty in obtaining specialty referrals for patients, particularly those who are members of medically underserved groups.
· Hospitals in urban areas with higher rates of uninsurance have less total inpatient capacity, offer fewer services for vulnerable populations, such as AIDS patients, and are less likely to offer trauma and burn care. Hospitals in rural counties with higher uninsured rates have lower financial margins and fewer intensive-care beds, offer fewer psychiatric inpatient services, and are less likely to offer high-technology services, such as radiation therapy.
· When public jurisdictions respond to the financial pressure of uninsurance and other stresses by converting their hospitals to private ownership, the availability of vital but unprofitable services may be adversely affected.
Local taxpayers bear a heavy economic burden of subsidizing uncompensated health care at the community level. Federal public insurance programs, such as Medicaid, alleviate but do not eliminate the financial demands that uninsurance places on communities. Strains on state and local budgets that result from serving uninsured populations may hurt the community economically. When local governments need additional funds to care for uninsured people, the money must be raised somehow. This may require higher local taxes or budget cuts elsewhere. If, however, local governments cannot raise new funds for health care and instead cut support, providers may be forced to reduce their services or leave the area entirely. This can weaken a community's economic base and reduce access to health care for everyone.
Uninsurance poses a threat to the control of communicable disease by delaying the detection, treatment, and reporting of infectious disease outbreaks, which may include emerging infectious agents such as SARS and perhaps someday those linked to bioterrorism. Hospital emergency departments and health departments play critical roles both in infectious disease surveillance and in caring for low-income populations, who are more likely to be uninsured. When high rates of uninsurance make emergency department crowding worse, the capacity of the emergency care system to handle a sudden influx of patients from a natural disaster or terrorist strike is compromised. To meet the burden of caring for the uninsured, health departments may be forced to shift scarce resources from traditional population-based public health activities, such as monitoring water quality and restaurant inspections to the delivery of personal health services to uninsured persons. This can weaken the ability of local health departments to contain outbreaks of infectious disease and other public health threats.
The IOM Committee on the Consequences of Uninsurance believes that there is sufficient evidence to justify the immediate adoption of policies to address the lack of health insurance in our nation. It is both mistaken and dangerous to assume that the prevalence of uninsurance in the United States harms only those who are uninsured. When analyzing health care at the community level, it is evident that the insured and the uninsured have a shared destiny.
Thank you for inviting me to present the work of the IOM and the Committee on the Consequences of Uninsurance. I am happy to answer any questions that you may have about our work and to provide the Subcommittee with more copies of reports, executive summaries, and CD-ROMs. More information about the IOM Committee is available at http://www.iom.edu/uninsured.