America’s Crisis: The Uninsured

Donna E. Sweet, MD, MACPProfessor of Medicine

The University of Kansas School of Medicine - Wichita

U.S. Uninsured 2003 to 2004

• The number of uninsured rose from 45 45 million to million to 45.845.8 million- million-15.6%15.6% of the of the populationpopulation

• The fourth straight year of increases• The number of uninsured has increased

by 66 millionmillion since 2000• Middle-Class losing coverage at fastest

rate

US Census Bureau, US Dept. of Commerce, AUGUST 29, 2006

U.S. Uninsured2004 to 2005

• The percentage of people without The percentage of people without health insurance coverage rose health insurance coverage rose

from from 15.6 %15.6 % to to 15.9 % 15.9 %

46.646.6 million peoplemillion people

1.US Census Bureau, US Dept. of Commerce, AUGUST 29, 2006

Over 46 Million Americans are now without Health Insurance

Coverage

Making preventive medicine and existing treatment therapies available to uninsured will…

•Increase overall access to health care

•Substantially contribute to a reduction in the total burden of illness facing the U.S.

Uninsured Americans Experience Reduced Access to Health Care

• Are less likely to have a regular source of care.

• Are less likely to have had a recent physician visit.

• Are more likely to delay seeking care.

• Are more likely to report they have not received needed care.

• Are less likely to use preventive services.

Uninsured Americans Experience Poorer Medical

Outcomes• Experience a generally higher mortality

• specifically higher in-hospital mortality.

• May be up to three times more likely than privately insured individuals to experience adverse health outcomes.

• Have been found to be up to four times as likely as insured patients to require both avoidable hospitalizations and emergency hospital care.

Infant / Maternal Mortality in the U.S.

• US ranks 25 / 29 of the developed countries in infant mortality:• 6.8 deaths / 1000 live births• (Iceland – 2.7 / 1000 births)

• US ranks 22 / 29 of the developed countries in maternal mortality:• 9.9 deaths / 1000 births• (Switzerland 1.4 deaths/100,000 births)

Source: ACP News 2007

On an Average Day in the US…

11,266Babies are born

1,393Babies are born preterm

(less than 37 weeks gestation)

1,156Babies are born to teen mothers

(<20 years)

909Babies are born low birth weight

(less than 2500 grams or 5 ½ pounds)

329Babies are born with a birth defect

224Babies are born very preterm

(less than 32 weeks gestation)

166 Babies are born very low birth weight

(less than 1500 grams or 3 ½ pounds)

77Babies die before reaching their first birthday

Source: Perinatal Data Companion 2007 Edition – March of Dimes

Medical Treatment for the Uninsured is…

•Often more expensive than

preventative, acute,

and chronic care of the insured

•Often is more likely received in the Emergency Department

The World Health Organization's ranking of the world's health systems

2000 Report

1 France 2 Italy3 San Marino4 Andorra 5 Malta 6 Singapore 7 Spain 8 Oman9 Austria 10 Japan

31 Finland 32 Australia 33 Chile34 Denmark35 Dominica 36 Costa Rica

38 Slovenia39 Cuba40 Brunei

37 United States

Coverage Clearly Matters

• Uninsured adults have a 25% greater risk of premature death

• The Institute of Medicine estimates that the number of excess deaths each year among uninsured adults, age 25-64, is 18,000

http://covertheuninsured.org/factsheets/display.php?FactSheetID=116

For Comparison…

• Estimated annual deaths in the under age 65 population in the U.S. due to the following causes:

• Diabetes 17,500• Stroke 19,000• HIV / AIDS 14,100• Homicide 19,700

http://covertheuninsured.org/factsheets/display.php?FactSheetID=116

Potential Years of Life LostPer 100 People for All Causes

premature death preventable at any age

5.081

3.666 3.536 3.3862.938 2.84

0

1

2

3

4

5

6

U.S. Germany Canada Australia Sweden Japan

OECD, 2005

Who Are The Uninsured?

Source: Himmelstein & Woolhandler - Tabulation from 1999 CPS

*Students>18, Homemakers,

Disabled, Early retirees

Employed50%

Children25%

Unemployed5%

*Out of labor force20%

Percentage of Children Without Health Insurance, By Poverty Level, 1997-2005

1997 1998 1999 2000 2001 2002 2003 2004 2005Notes: Survey method change in 2005 affects comparison with earlier years slightly. Children less than 18 years old.Source: L. Ku, “Medicaid: Improving Health, Saving Lives,” Center on Budget and Policy Priorities analysis of National Health Interview Survey data, August 2005.

Children below 200% of poverty

Children above 200% of poverty

23%

14%

6%5%

21%

5%

Access Problems for Middle Class Families

(Income $25,000-$49,999)

22% 23%

13% 12%

0%

5%

10%

15%

20%

25%

Postponed Needed Care Problem Paying Bills

Didn't Get Needed Drug Collection Agency Call

NPR/Kaiser Survey, June2002

Current System

Who Profits?

Drug Companies Profits 1996-2004

% Return on Revenue

5

17.1

3.9

16.1

5.2

18.5

5.1

18.6

5.3

18.6

3.3

18.5

3.1

17

4.6

14.3

5.2

15.8

02468

101214161820

1996 1997 1998 1999 2000 2001 2002 2003 2004

Fortune 500 Median Drug Companies

Fortune 500 rankings for 1995-2004

Drug Companies’Cost Structure

Taxes7%

R&D13%

Marketing/Adm35%

Manufacturing27%

Profits(after taxes)18%

Health Affairs 2001:20(5):136

MEDICAL MALPRACTICE INSURANCE

2000-2004

9.6%

134.5%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Payout Increase Premiums Increase Gross Losses Paid Gross Premiums Written

Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry, July 2005

Growth of Registered Nurses and Administrators, 1970-2002

Bureau of Labor Statistics & Himmelstein/Woolhandler/Lewontin Analysis of CPS data

0%

500%

1000%

1500%

2000%

2500%

1970 1975 1980 1985 1990 1995 2002

Gro

wth

sin

ce 1

97

0

Administrators RNs

Growth of Physicians and Administrators, 1970-2002

Source: Bureau of Labor Statistics & NCHS

0%

500%

1000%

1500%

2000%

2500%

1970 1975 1980 1985 1990 1995 2002

Gro

wth

sin

ce 1

970

Administrators Physicians

Bureau of Labor Statistics & Himmelstein/Woolhandler/Lewontin Analysis of CPS data

Administrative Expenses & Profit

% of premium 1998

33%26% 25% 25%

18%15% 14%

1.30%

0%

10%

20%

30%

Best

Week L

ife/H

ealt

h S

peci

al R

eport

4/1

2/9

9 f

rom

SEC

filli

ngs

Administrative Expenses & Profit% of premium 2000

3.10%

16.30%19.90%

26.50%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Medicare Non Profit Blues

Commerical Carriers Investor Owned Blues

International Journal of Health Services 2005:35(1):64-90

Administrative Expenses & Profit

% of premium 2005

23.1%21.4%

19.4%17.1% 16.8% 16.1%

0%

10%

20%

30%

com

pan

y 1

0-K

, year-

en

d fi

lings

wit

h t

he S

ecu

riti

es

and E

xch

an

ge C

om

mis

sion

Current System

Cost

Nations Health Spending per person 2003

$2,231$2,903 $2,996 $3,003

$5,635

$0.00

$1,000.00

$2,000.00

$3,000.00

$4,000.00

$5,000.00

$6,000.00

per capita

U.K. France Germany Canada U.S.

OECD Health Data 2005, OECD, Paris, 2005.

U.S. Health Spending

0

200

400600

800

1000

1200

1400

16001800

2000

1980 1990 2000 2002 2003 2004

Billion

$255

$717

$1359$1608

$1741$1878

California HealthCare Foundation

U.S. Health Spending % of Gross Domestic Product

9.1%

12.4%13.8%

15.4% 15.9% 16.0%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

1980 1990 2000 2002 2003 2004California HealthCare Foundation

U.S. Health Spending per person

$3,910$4,267

$4,726$5,485

$6,280

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

1996 1998 2000 2002 2004California HealthCare Foundation

Employer Health BenefitsCumulative Changes

2000-2006

0%11%

25%43%

59%73%

87%

7%4%

10%12% 15% 20%

3% 5% 7% 10% 14%18%

0%10%20%30%40%50%60%70%80%90%

100%

2000 2001 2002 2003 2004 2005 2006

Health Ins Premium Overall Inflation Workers' Earnings

Employer Health Benefits 2006 Survey, KFF

% of Workers CoveredOffering & Not Offering

Employers

63%

65%

63%62%

61%60%

59%

56%

57%58%

59%60%

61%

62%63%

64%65%

2000 2001 2002 2003 2004 2005 2006

Covered Workers

Employer Health Benefits 2006 Survey, KFF

Average Annual Premium Contribution 2006

$3,615

$2,973

$627

$8,508

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000

Worker Employer

$11,480 Family

$4,242 Single

Employer Health Benefits 2006 Survey, KFF

Employers’ Health Benefits Cost U.S. Vs. Canada

% of Salaries and Wages8.0%

0.6% 0.7%0.5%

0.7%0.4% 0.1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

Medical Disability Dental Vision Care etc

US Canada

KPMG:WWW.GOV.MB.CA

Hospital Billing & Administration U.S. Vs. Canada

$487

$85

$0

$100

$200

$300

$400

$500

$ per Capita

U.S. Canada

Woolhandler/Himmelstein/Campbell NEJM 2003:349:768 UPDATED

A Major Cause of Bankruptcy

Over 50% of personal bankruptcies caused by illness and medical costs

75% of those bankrupted by medical bills had insurance at the time they got sick

Nortons Bankruptcy Adviser, May 2000Health Affairs/online/February,2005

Health Coverage

Single Risk Pool

Current System• 1/3 of Americans are uninsured or

underinsured• Denies care to millions with illnesses• Premature death rate higher than other

wealthy countries• Cost double Canada’s, Germany’s, or

Sweden’s and rising faster• Executives and investors making billions• Destruction of the doctor/patient

relationship

Current System• Hospitals with empty beds• Enough well trained

professionals but rural areas inadequately served

• Excellent research• Current spending could cover

everyone

Advantages of Single Risk Pool Health Care

• Comprehensive Health Coverage for everyone -all needed care,no co-pays or deductible

• Greater choice of provider

• Health decisions made by patient and provider

• Public accountability for quality and cost, but minimal bureaucracy

• Eliminates the high overhead cost of multiple private, for-profit insurances. Reduces administrative costs from up to 33% to 1-5%.

• Fee for service with simplified negotiated fee schedule- simplified reimbursement

• Improved Health Planning

Funding For a Single Risk Pool

Revenue• Federal funds

designated for Medicare & Medicaid

• State & local government funds

• Employer / Employee taxes

Reimbursements• Hospitals,

operating & capital• Healthcare

Providers• Home care

agencies• Long term care

2005 Poll Preference Financed by Taxpayers

Single Risk Pool

30% Current

65% Single Pool

5% Don’t Know

Pew Report, May 2005

Employee Advantages

• Choice of employer not based on health care coverage

• Employer concerned with job performance not your health condition

• Health coverage not based on location

Employer Advantages

• Employer would not be responsible for employee health coverage

• No bargaining with labor unions over health benefits

• No competing on health benefit costs

U.S. Business Competitiveness

• In 1994, Jack Smith, former CEO of General Motors, said he "personally favored the Canadian system" of health coverage.

• Auto manufacturers and other companies are voting for single-risk pool health care by moving plants to Canada (e.g., Toyota, Ford, General Motors & Microsoft Support).

• In 2005, it was reported that the cost of employee health care to manufacturers adds $1,500 to the cost of a U.S.-made car.

"Critical Condition," James Steele

National Coalition on Health Care Report

Impacts of Health Care ReformProjections Of Costs And Savings (2006 to 2015) 4 Alternative Solutions

• Employer & individual mandate: total savings= $320.5B

• Expansion of existing public programs for the uninsured: total savings= $320.5B

• Creation of new programs for the uninsured: total savings= $369.6B• Establishment of a universal publicly financed

program: total savings= $1,136Btotal savings= $1,136BKenneth E. Thorpe , Ph.D., Department of Health Policy and ManagementRollins School of Public Health, Emory University

A report prepared for the National Coalition on Health Care,2005

Massachusetts' New Healthcare Law

• Requires the uninsured to buy their own private coverage

• Assumes that private insurers will offer affordable, comprehensive policies

• Costlier than promised• Out of reach for most of the uninsured• Increases the cost of state subsidies to the

poor• Cost will force more employers to drop

coverage• The program is simply not sustainable

David U. Himmelstein, M.D.Steffie Woolhandler, M.D.

Cambridge, Mass., April 6, 2006

CanadianHealthcare System

• Canadian doctors are in private practice. Doctors are guaranteed payment by the provincial government according to the standard fees.

• Services not covered or only partially covered such as prescription drugs, dentistry and optometry are paid by the private sector . Many Canadians have private health insurance, often through their employers, that cover these expenses.

• Private clinics offer some of the same services as the public system such as hip replacements and MRI scans. Selling private health insurance that could cover these procedures is legal in several provinces.

Health Savings Account

vs

Comprehensive

Health Savings Account (HSA)

• Plans with very high deductibles-$2000 to $15,000/family per year

• High coinsurance rate-25% to 35% after deductible

• Tax free HSA to pay deductible and coinsurance

• Only covered services count toward deductible

Early Experience withHealth Savings Account

HSAHSA Health Plan with deductible Individual $1000+ Family $2000+

Comprehensive Comprehensive Health Plan with no deductible or less than Individual $1000Family $2000

December 2005 EBRI Issue Brief No. 288

Satisfaction WithHealth Plan

63%

42%

8% 26% 11%33%

0%

10%

20%

30%

40%

50%

60%

70%

Extremely or VerySatisfied

Not Satisfied Not Likely to Stay

Comprehensive Health Savings Acct.

Dece

mber

2005 E

BR

I Is

sue B

rief

No. 288

HSA Health Plans Worse Access

% Foregoing Needed Care

17%

24%

10%

20%

11%

23%27%

38%

0%5%

10%15%20%25%30%35%40%

RxFilled Test or treament MD vist Any 4 ProblemsLess than $500Deductible More than $499 Deductible

Commonwealth Fund Bienneal Ins Survey, 2003

Problems with HSA Health Plans

• Must have a health plan before qualifying for a health saving account

• Decreases necessary care• Discourages preventive care/early intervention• Very high administrative cost• Many unable to pay ruinous medical bills• Makes the current health care crisis worse• Enriches a few people• 2005-Only 1% of health plans have HSA

The American College of Physicians Plan

• that ACP believes the final authorizing legislation should include:

• Expanded eligibility and funding to cover all • currently eligible children • and to provide coverage to more children from lower

income families.

• The College said that the current funding levels in the bill are insufficient and noted that they are substantially lower than the budget resolution approved by Congress on May 7.

The American College of Physicians Plan

• A federal grant program to support states that redesign their Medicaid and SCHIP programs around the Patient-Centered Medical Home (PCMH). • The PCMH provides patients with care coordinated

by a primary care physician. • The potential of this model to improve care and lower

costs is supported by the experience of states, like North Carolina, that already are implementing it, and by numerous studies on the beneficial impact of care coordinated by primary care physicians.

The American College of Physicians Plan

• Higher taxes on tobacco, such as proposed by Senators Baucus and Grassley. • Given the fact that smoking is the number one

cause of preventable deaths in the United States and a huge contributor to the growing numbers of patients with chronic diseases covered by federal government, funds from higher tobacco taxes should be applied to the SCHIP reauthorization and to avert Medicare physician payment cuts.

Martin Luther King, Jr.

"Of all the forms of inequality, injustice in health care is the most

shocking and inhumane."