A Report on the Institute of Medicine Committee on Uninsurance

Keynote Address to the “Voices of Detroit Initiative” Annual Meeting
President Mary Sue Coleman
University of Michigan

Cobo Conference/Exhibition Center, Detroit
May 19, 2003

I want to thank the leadership of the “Voices of Detroit Initiative” for inviting me to speak to you today.

First, I want to congratulate all of you for the work you are doing to improve access to health care to such a significant segment of our population. You have undertaken a very challenging job at a moment when all the struggles are uphill.

It is disheartening to see hmw the health care crisis is affecting institutions such as the Detroit Medical Center—but this crisis makes your work all the more important.

I am so pleased that the University of Michigan has been able to work with your organization in the area of dental health care. Professor Amid Ismail directs the Detroit Center for Research on Oral Health Disparities, which is closely coordinated with the Voices of Detroit Initiative and the Detroit Department of Health.

He has been working with “Voices of Detroit” to expand the network of dental clinics in Detroit.

Our School of Dentistry has supported the opening of one dental clinic in Detroit, and has obtained funding from Delta Dental Fund of Michigan to support the operation of a “Voices of Detroit” dental clinic at the Detroit Department of Health.

There is an enormous amount of need, and attempting to deal with it almost seems incomprehensible. Yet efforts such as these dental initiatives, and all the policy work that “Voices of Detroit” has accomplished, are truly making a difference.

And this health care crisis certainly keeps our feet to the fire at the Institute of Medicine, where we have been grappling with the question of access to health care for years.

The committee I co-chair, named the “Committee on the Consequences of Uninsurance,” has undertaken a comprehensive study and is issuing a set of six publications over three years.

Four volumes are in print, and the final two publications will be out later this year.

Many of us have grown up with and always assumed we would enjoy quality health care. This is especially true in a state like Michigan, where health care coverage—for workers and retirees—historically has been an integral part of employee compensation packages in the auto industry, in higher education, and in many other sectors of our economy.

The University of Michigan has provided a leadership role in promoting insurance as a vehicle for safeguarding the public’s health for many years, and we should be rightly proud of this tradition.

In the 1940s, University of Michigan Professor Nathan Sinai, in the Department of Health Management and Policy, developed a voluntary health insurance plan that became the prototype for Blue Shield.

His colleague, Professor Sy Axelrod, launched the Bureau of Public Health Economics in 1943, and contributed to President Truman's efforts to implement a comprehensive health insurance plan in 1950.

Today, Michigan residents obtain benefit from excellent community-based hospitals and, of course, the University of Michigan Health System, which consistently ranks among the nation's top 10 academic medical centers.

But access to clinical care like that afforded to most of us in this room is unavailable to many of our fellow citizens. In this country, the harsh reality is that about 40 million Americans—including some 8.5 million children—are without health insurance.

Being without health insurance often implies a drastic decline in one’s quality of life and, in the worst of cases, premature death.

With rising health care costs and increasing numbers of employees being asked to pay more of their health care costs, there is little relief in sight.

As co-chair of the Committee on the Consequences of Uninsurance, I have had the opportunity to examine the complexity of uninsurance in depth, and can only conclude that the U.S. health care distribution system, as we know it, is undermining our nation's reputation and character as a fair and compassionate society.

Let me explain the nature of our committee's work, and some of our conclusions.

The Institute of Medicine periodically undertakes studies related to American health care and public policy. The Committee on the Consequences of Uninsurance represents a sustained effort by the Institute to inform the public debate about this pressing and persistent challenge.

Our three-year study has two objectives:

• To assess and consolidate evidence about health, economic, and social consequences of uninsurance, and
• To raise awareness and improve understanding by both the general public and policy-makers.

In addition to providing baseline information to assess the consequences of uninsurance, we have sought to evaluate the evidence relating health insurance and access to care, to explain the dynamics of health insurance coverage, and to describe the uninsured population.

We focused on individuals under age 65, because the federal Medicare program provides nearly universal coverage for those 65 and older. We confined our study to those lacking health insurance for at least one year.

Our first goal was to identify the problem: Who are the uninsured? This became the topic of the first report, “Coverage Matters, Insurance and Health Care.”

The second report focuses on whether having health insurance makes a difference in overall health status, and is titled “Care Without Coverage, Too Little, Too Late.”

Our third report examines family dynamics and the impact of lacking health insurance on the whole family, in the volume “Health Insurance Is A Family Matter,” published in September 2002.

Our most recent report was issued earlier this year, and is titled “A Shared Destiny: Community Effects of Uninsurance.” It explores the impact of uninsurance on all of us.

In subsequent reports, we will examine the economic costs of significant populations of uninsured to society, and ultimately offer suggestions for models and criteria for health financing reforms.

We started with the questions, who are the uninsured and how do most Americans view the problem of uninsurance? Quickly, it became apparent that as a nation we underestimate the numbers of uninsured among us, we hold misperceptions about their identity and how they lose insurance and about the economic and health consequences of being uninsured.

Let’s start with the myths:

Myth #1: People without health insurance get the medical care they need.
Reality: Over and over, studies show that those without health insurance are less than half as likely to receive needed medical care.

They are much less likely to have a physician visit within a year, have fewer visits annually, and they are more than three times as likely to lack a regular source of care. They also are less likely to receive preventive services and appropriate routine care for chronic conditions than those with insurance.

Myth #2: The number of Americans without health insurance is not large and has not been growing.
Reality: The Census Bureau estimates 38 million to 42 million people in the United States lacked health insurance coverage in 1999.

That is about 15 percent of the total population of 274 million persons and 17 percent of the population under 65. Unfortunately, this intractable problem has persisted for many years.

Myth #3: Most people without health insurance decline coverage offered in the workplace because they are young and healthy and do not think they need it.
Reality: Young adults are more likely to be uninsured mostly because they are ineligible for workplace coverage. Only 3 million workers between 18 and 44 are uninsured because they decline workplace health insurance. Eleven million workers between 18 and 44 are uninsured because their employer does not offer them coverage.

Myth #4: Most of the uninsured do not work, or they live in families where no one works.
Reality: More than 80 percent of uninsured children and adults under the age of 65 live in working families.

Myth #5: Recent immigrants account for the increase in the number of uninsured persons.
Reality: Immigrants who have come to the United States within four years comprise a relatively small proportion of the general population [SLIDE 14]. Non-citizens represent less than one in five uninsured persons.

Let me summarize for you the principle ways that people living in this country gain or lose insurance coverage:

• Employment-based insurance is by far the most common type of coverage available.
• Some of us are able to purchase insurance on our own, if we can qualify, but the premiums are very expensive.
• Insurance can be acquired through marriage to an insured person.
• Or, it is possible to qualify for public insurance, such as Medicaid and Medicare.

But because most insurance is employment-based, families who have enjoyed excellent health insurance coverage for years may suddenly lose this safety net when a working parent changes jobs, is laid off, dies, or divorces.

Money may not buy love, happiness, or good health, but there is a strong correlation between family income and having health insurance. In lower income families, only 59 percent are able to obtain insurance for the whole family.

You are less likely to have insurance for some family members if your family is headed by a single parent, or you recently immigrated to the U.S., or you are a member of a racial or ethnic minority group.

So, who are the uninsured?

• As I noted earlier, many of the uninsured are employed.
• The uninsured are likely to have at least one wage earner in the family, but to earn less than 200 percent of the federal poverty baseline, and to lack a college education.
• They also are likely to be self-employed, employed by a small firm of fewer than 100 workers.
• In terms of life stage, the uninsured are most likely to be adults and young adults, unmarried, and members of families that include children.

The probability of being uninsured varies vastly by geographic region. You can see that Michigan ranks among the states with a high level of uninsurance.

In our work, we evaluated the literature about the health consequences of uninsurance, because establishing this link is critical to shaping public policy and gaining support for widespread health care financing.

Let me give you the “punch line” first:

• The committee finds a consistent relationship between health insurance coverage and health outcomes for adults.
• Coverage is associated with having a regular source of care, which promotes continuity of care. The ultimate result is improved health outcomes.

We concluded that health insurance is associated with better health outcomes for adults and with their receipt of appropriate care across a range of preventive, chronic, and acute care services. Adults without health insurance coverage die sooner and experience greater declines in health over time.

Let me provide a sense of some of the many findings that have led us to this conclusion:

• Long-term, well-controlled studies of mortality reveal a higher risk of dying prematurely for those who were uninsured at the beginning of the study than for those who initially had private coverage.
• These studies have shown that adults who are initially uninsured have a 25 percent greater risk of dying prematurely than adults with private insurance.
• Follow-up studies have shown that black men and white women who were uninsured had a 50 percent greater risk of dying prematurely than their insured counterparts, and uninsured white men had a 20 percent higher risk.
• Because of delays in diagnosis, uninsured persons are more likely to die prematurely than persons with insurance. Tragically, uninsured women diagnosed with breast cancer have a 30 percent to 50 percent higher risk of dying than women with private insurance. Uninsured women are more likely to receive a late-stage diagnosis of cervical cancer than are women with any kind of insurance.
• Adults with diabetes who are without insurance are less likely to receive recommended services such as foot exams or dilated eye exams.
• Among adults with HIV, having health insurance has shown to reduce the risk of dying within a six-month period by over 70 percent. Uninsured adults with HIV infection are less likely to receive highly effective medications that have been shown to improve survival.

We believe several policy implications may be drawn from these findings:

• Empirical evidence affirms that having health insurance results in better health outcomes
• Continuity of coverage appears to account for some of the health benefits of insurance
• The scope of benefits is related to receipt of appropriate care
• Insurance coverage that begins only after an illness is diagnosed will not achieve all of the potential positive impacts on health

The way our health insurance distribution system is configured is part of the problem. Although most of us live in families, insurance goes to individuals. For example, publicly financed health insurance programs tend to cover individuals—poor children or pregnant women—rather than the family.

However, our nation's well being depends, in part, on providing conditions for families to successfully raise the next generation of Americans.

In the third report, the Committee examined the wide range of consequences to families having one or more uninsured members.

What we concluded is that the physical, psychosocial and financial health and well-being of the whole family can be adversely affected if even one member lacks health insurance. Roughly 58 million individuals are either uninsured themselves or live with a family member who is uninsured.

Many family transitions affect insurance coverage. The death of a spouse who had family coverage through work can mean loss of insurance for the surviving family members. A spouse who retires at age 65 may immediately qualify for Medicare, but a younger spouse and other dependents may be left with no coverage.

We know that serious health problems and large medical bills can shake a family's financial foundation. Two-thirds of working age adults with high medical bills resort to borrowing from family or friends.

Twenty-five percent obtain a loan or mortgage to cover medical expenses, and some families declare bankruptcy, putting their credit rating and financial future in jeopardy.

Medical expenses are a factor in almost half of all personal bankruptcy filings.
We have found that families without insurance use health services very selectively.

They may delay or forego treatment or preventive care to reduce short-term costs, to the point of jeopardizing their long-term health. Children who are without health insurance fare much worse in the health care system than those privileged children whose parents do have insurance. Unfortunately, uninsured parents of small children are more likely to lack a regular source of care than parents with private insurance and often forego needed care, not just for themselves, but also for their children.

Children without health care coverage are more likely to receive no care or delayed care, placing them at greater risk of hospitalization for such conditions as asthma. Children who are not treated for such common childhood conditions as ear infections and iron deficiency anemia may suffer consequences that affect their language development, long-term school performance, and success in life.

The impact can be even more severe on children with serious illnesses and disabilities, who require more medical care than average children. These children are less likely to have a usual source of care, and are less likely to get needed prescriptions, medical, mental health, dental, or vision care than their peers with insurance.

In the United States, where prenatal visits early in the pregnancy and continuing through delivery are the standard of care, the effect of being born without health insurance starts in the womb. Uninsured women and their newborns receive, on average, less prenatal care. They also are more likely to have poor outcomes, including greater likelihood of complications, infant death, and low birth weight.

Let me reiterate our conclusions from the study of impact of health insurance coverage on families:

• First, the current hodgepodge of employment-based and public insurance leaves gaps in coverage for many families. These gaps occur both over time and across the members of the family.
• Second, uninsured families often cannot afford major health bills and therefore avoid seeking care.
• Third, pregnant women, newborns and children without health insurance have worse access to care, receive fewer services, and often have poorer health outcomes, and
• Fourth, children whose parents do not have health insurance coverage are less likely to be insured and less likely to receive appropriate health care, regardless of the child’s eligibility for coverage.

Our most recent publication, titled “A Shared Destiny,” cites a number of policy implications:

• The burden of financing care for uninsured persons affects the health care of all members of the community.
• There is a direct impact on low- and moderate-income families even when they have insurance, because when the uninsured are flooding emergency facilities, it lowers the quality of care a hospital can provide.
• This means that your health care is worse if you are in a community with high uninsurance.
• All of our systems are affected by this problem – we must have the buffer of access to primary care that the uninsured currently do not have.
• Urban “safety-net” hospitals are especially likely to be affected by a large uninsured population. In attempting to provide emergent care to large numbers, our urban hospitals become overwhelmed by the demands, and start to develop serious fiscal problems. Unfortunately, the plight of the Detroit Medical Center is an example of this vicious cycle.

Look at this quotation from Dr. Daniel Michael, chief of neurosurgery at the Detroit Medical Center, who commented on the possible bankruptcy filing last week:

"This is something that's been foretold. It couldn't come as a surprise to anybody. We're taking care of people who can't pay for our services."

Health insurance is not the solution to all communal ills—but the presence of insurance makes a distinctive difference in the quality of health care for all of us.

Here is the bottom line, and I quote from our most recent report:

“It is both mistaken and dangerous to assume that the prevalence of uninsurance in the United States harms only those who are uninsured.”

When we consider all four reports, what have we learned?

• Being uninsured usually is not a choice.
• Health insurance does contribute to improved health and improved outcomes.
• The lack of health insurance, even for a single individual in a family, can adversely affect the entire family.
• And when there is a significant uninsured population, there is an adverse impact on the quality of care to the insured population.

Will Americans demand a fairer and more efficient system of health insurance? It has been almost a decade since we closely examined the issue of health insurance in the United States, and the situation deteriorated during a time of great national prosperity.

As more people become aware of how intractable the current system is and how vulnerable it leaves us at all levels of society, I believe that we will muster the collective determination to change. We must.

Although the statistics are discouraging, I believe that armed with accurate information and thoughtful analysis, we will find better, more workable solutions.

Just last Monday, the Secretary of Health and Human Services, Tommy Thompson, told the Detroit Economic Club that he has directed HHS to work on critical issues:

• He appointed a senior official to work with the Detroit Medical Center to find ways of increasing funding for the uninsured.
• He has directed his staff to provide technical assistance to facilitate the opening of additional community health centers.
• Ford Motor Company will work with HHS staff to create initiatives to increase the quality of health care processes while reducing costs.
• And, HHS will work with the Detroit Regional Chamber on a “Health Insurance Summit.”

We will all be watching these efforts vigilantly, and applaud these initiatives.
Thank you for allowing me to share with you some of my concerns, and the concerns of the Institute of Medicine, about the state of health insurance in America. I hope that you will stay tuned for the next two reports of our committee. Your work in “Voices of Detroit” is definitely part of the solution we are seeking.

I leave you with one last thought from Goethe. It has been a guiding principle for all of us serving on the Committee on the Consequences of Uninsurance:

"Knowing is not enough; we must apply.
Willing is not enough; we must do."

Thank you.

Sources:

Publications from the Committee on the Consequences of Uninsurance:

Care Without Coverage, Too Little, Too Late. Institute of Medicine, Shaping the Future for Health. Washington: National Academy Press, 2002.

Coverage Matters, Insurance and Health Care. Institute of Medicine, Shaping the Future for Health. Washington: National Academy Press, 2001.

Health Insurance Is A Family Matter. Institute of Medicine, Shaping the Future for Health. Washington: National Academies Press, 2002.

A Shared Destiny: Community Effects of Uninsurance. Institute of Medicine, Shaping the Future for Health. Washington: National Academies Press, 2003.

Other publications:

Danis, Marion and Andrea K. Biddle and Susan Dorr Goold. "Insurance Benefit Preferences of the Low-income Uninsured," Journal of General Internal Medicine, Vol. 17, Issue 2, February 2002.

Hall, Sheri, and Mike Martindale. “DMC Considers Cuts.” The Detroit News , May 16, 2003.

"Health Benefits Eroding for Workers," Associated Press, September 16,2002.
Maher, Patty. "Hope Clinic Woes Cut Free Services, Ann Arbor News, September 14, 2002.

McLaughlin, Catherine. "A Revolving Door: How Individuals Move In and Out of Health Insurance Coverage," Economic Research Initiative on the Uninsured Research Highlight, University of Michigan, No. 1, August, 2002.

McLaughlin, Catherine and Sarah E. Crow. "Automatic Enrollment in Health Plans: Playing at the Margins," prepared for the Commonwealth Fund, August 8, 2002.

Thompson, Tommy. Address to the Detroit Economic Club, May 12, 2003. http://www.econclub.org

U-M Health System Website.