A Shared Destiny

Community Effects of Uninsurance

Committee on the Consequences of Uninsurance

Board on Health Care Services

INSTITUTE OF MEDICINE
OF THE NATIONAL ACADEMIES

THE NATIONAL ACADEMIES PRESS
Washington, D.C.
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A Shared Destiny: Community Effects of Uninsurance A Shared Destiny Community Effects of Uninsurance Committee on the Consequences of Uninsurance Board on Health Care Services INSTITUTE OF MEDICINE OF THE NATIONAL ACADEMIES THE NATIONAL ACADEMIES PRESS Washington, D.C. www.nap.edu

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A Shared Destiny: Community Effects of Uninsurance THE NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W. Washington, DC 20001 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. Support for this project was provided by The Robert Wood Johnson Foundation. The views presented in this report are those of the Institute of Medicine Committee on the Consequences of Uninsurance and are not necessarily those of the funding agencies. International Standard Book Number 0-309-08726-0 Library of Congress Control Number 2003100538 Additional copies of this report are available for sale from The National Academies Press, 2101 Constitution Avenue, N.W., Box 285, Washington, DC 20055. Call (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet, http://www.nap.edu. For more information about the Institute of Medicine, visit the IOM home page at www.iom.edu. Copyright 2003 by the National Academy of Sciences. All rights reserved. Printed in the United States of America. The serpent has been a symbol of long life, healing, and knowledge among almost all cultures and religions since the beginning of recorded history. The serpent adopted as a logotype by the Institute of Medicine is a relief carving from ancient Greece, now held by the Staatliche Museen in Berlin.

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A Shared Destiny: Community Effects of Uninsurance “Knowing is not enough; we must apply. Willing is not enough; we must do.” —Goethe INSTITUTE OF MEDICINE OF THE NATIONAL ACADEMIES Shaping the Future for Health

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A Shared Destiny: Community Effects of Uninsurance THE NATIONAL ACADEMIES Advisers to the Nation on Science, Engineering, and Medicine The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Wm. A. Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. Wm. A. Wulf are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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A Shared Destiny: Community Effects of Uninsurance COMMITTEE ON THE CONSEQUENCES OF UNINSURANCE MARY SUE COLEMAN (Co-chair), President, University of Michigan, Ann Arbor ARTHUR L. KELLERMANN (Co-chair), Professor and Chairman, Department of Emergency Medicine, Director, Center for Injury Control, Emory University School of Medicine, Atlanta, Georgia RONALD M. ANDERSEN, Wasserman Professor in Health Services, Chair, Department of Health Services, Professor of Sociology, University of California, Los Angeles, School of Public Health JOHN Z. AYANIAN, Associate Professor of Medicine and Health Care Policy, Harvard Medical School, Brigham and Women’s Hospital, Boston, Massachusetts ROBERT J. BLENDON,* Professor, Health Policy and Political Analysis, Department of Health Policy and Management, Harvard School of Public Health and Kennedy School of Government, Boston, Massachusetts SHEILA P. DAVIS, Associate Professor, The University of Mississippi Medical Center, School of Nursing, Jackson GEORGE C. EADS, Charles River Associates, Washington, DC SANDRA R. HERNÁNDEZ, Chief Executive Officer, San Francisco Foundation, California WILLARD G. MANNING, Professor, Department of Health Studies, The University of Chicago, Illinois JAMES J. MONGAN, President and CEO, Partners HealthCare, Inc., Boston CHRISTOPHER QUERAM, Chief Executive Officer, Employer Health Care Alliance Cooperative, Madison, Wisconsin SHOSHANNA SOFAER, Robert P. Luciano Professor of Health Care Policy, School of Public Affairs, Baruch College, New York STEPHEN J. TREJO, Associate Professor of Economics, Department of Economics, University of Texas at Austin REED V. TUCKSON, Senior Vice President, Consumer Health and Medical Care Advancement, UnitedHealth Group, Minnetonka, Minnesota EDWARD H. WAGNER, Director, McColl Institute for Healthcare Innovation, Center for Health Studies (CHS), Group Health Cooperative, Seattle, Washington LAWRENCE WALLACK, Director, School of Community Health, College of Urban and Public Affairs, Portland State University, Oregon *   Served from September 2000 to December 2002.

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A Shared Destiny: Community Effects of Uninsurance IOM Staff Wilhelmine Miller, Project Co-director Dianne Miller Wolman, Project Co-director Lynne Page Snyder, Program Officer Tracy McKay, Research Associate Ryan Palugod, Senior Project Assistant Consultants Darrell J. Gaskin, Deputy Director, Center for Health Disparities Solutions and Research Scientist, Johns Hopkins Bloomberg School of Public Health Jack Needleman, Assistant Professor of Economics and Health Policy, Department of Health Policy and Management, Harvard University

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A Shared Destiny: Community Effects of Uninsurance Reviewers This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the NRC’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report: BRENT ASPLIN, Assistant Professor of Emergency Medicine, University of Minnesota, Research Director and Director of Public Policy Research, Regions Hospital, St. Paul, MN JOHN BILLINGS, Director, Center for Health and Public Service Research, New York University GEORGE D. GREENBERG, Executive Advisor, U.S. Department of Health and Human Services, Washington, DC SANDRAL HULLETT, Acting Chief Executive Officer, Jefferson Health System, Birmingham, AL JUDITH R. LAVE, Interim Chair, Department of Health Policy and Management, Graduate School of Public Health, University of Pittsburgh ROBERT A. LOWE, Associate Professor, Emergency Medicine Research, Oregon Health Sciences University, Portland ALAN NELSON, Special Advisor to the Executive Vice President, American College of Physicians-American Society of Internal Medicine, Fairfax, VA

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A Shared Destiny: Community Effects of Uninsurance THOMAS RICKETTS, Director, North Carolina Rural Health Research Program, Cecil G. Sheps Center for Health Services Research, Chapel Hill, NC LEIYU SHI, Associate Professor, Associate Director, Johns Hopkins Primary Care Policy Center for the Underserved, Johns Hopkins University, Baltimore, MD Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations nor did they see the final draft of the report before its release. The review of this report was overseen by Hugh H. Tilson, Clinical Professor, School of Public Health, University of North Carolina, Chapel Hill, appointed by the Institute of Medicine and Joseph P. Newhouse, John D. MacArthur Professor of Health Policy and Management, Harvard University, appointed by the NRC’s Report Review Committee, who were responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.

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A Shared Destiny: Community Effects of Uninsurance Foreword A Shared Destiny: Community Effects of Uninsurance is the fourth in a series of six reports planned by the Institute of Medicine (IOM) and its Committee on the Consequences of Uninsurance. Since we issued the third report last September, the Census Bureau has reported that the number of uninsured people in the United States as well as the rate of uninsurance have risen again after slight dips in 1999 and 2000. More than 41 million people went without any health insurance during calendar year 2001, and the number probably increased in 2002 because of the slowdown in the economy. Forty-one million uninsured people, virtually all of whom are under age 65, translates into an uninsured rate of 16.5 percent for the population in that age range. Lacking or losing health insurance can have effects that extend beyond the individual without coverage. The Committee’s last report, Health Insurance Is a Family Matter, showed that all members of a family can be adversely affected if even one member lacks coverage. In A Shared Destiny, we learn that the rate of uninsurance in a community can affect the health and health services available to all members of that community, insured and uninsured alike. This report demonstrates that we share a common interest in ensuring that our neighbors, as well as members of our own families, are covered by health insurance. When the Committee’s first report, Coverage Matters, was issued in the fall of 2001, the country was reeling from the effects of the 9/11 attacks and the threat of bioterrorism. Americans felt a sense of community with the victims’ families in New York and Washington. Many of us offered blood, donated money, and helped in other ways with the recovery effort. Since that time, we have gained a deeper appreciation of the value of public health and emergency services. As the

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A Shared Destiny: Community Effects of Uninsurance country rebounds and rebuilds, we have a clearer sense of the importance of strong social bonds within our communities. A Shared Destiny looks with fresh eyes at the effects of uninsurance and sees the numerous ways in which all of us are affected when many lack health insurance coverage. By adopting a community perspective, the report shows how the quality, quantity, and scope of health services within the community can be adversely affected by the presence of a large and growing population of uninsured. Because this is a groundbreaking approach, the Committee highlights fruitful areas for future research. It also presents its own conclusions, based on the existing literature and original research that the Committee undertook. The members of the Committee on the Consequences of Uninsurance represent expertise in a broad variety of disciplines, including economics, public health, health services research and management, epidemiology, strategic planning, small business management, clinical medicine and nursing, and health communications. This report presents a number of important findings about the documented impacts of the lack of health insurance on communities throughout the United States. It charts an ambitious research agenda for the development of information that policy makers and the American public need if we are to understand more completely the implications and consequences of the choices we are making about the financing of health care. The conclusions in this report are consistent with those of the Committee’s earlier reports: health insurance has benefits for all of us. Harvey V. Fineberg, M.D., Ph.D. President, Institute of Medicine February 2003

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A Shared Destiny: Community Effects of Uninsurance Preface A Shared Destiny: Community Effects of Uninsurance examines whether the presence of a large uninsured population in a community can affect the health of and health services available to all in the community. The spillover effects of uninsurance go beyond the individual who lacks coverage to touch those who have adequate insurance as well. This is the fourth of six reports that will be issued by the Committee on the Consequences of Uninsurance, a major three-year effort of the Institute of Medicine (IOM) supported by The Robert Wood Johnson Foundation. The Committee continues to follow the research design outlined in its first report, Coverage Matters: Insurance and Health Care. This report, A Shared Destiny, builds on the Committee’s previous three reports by expanding the perspective from the consequences of uninsurance on individuals and their families to entire communities. The Committee’s first report, Coverage Matters, presented background information about who is uninsured and why and underscored the persistence of a large uninsured population in the United States during both good and bad economic times. The second report, Care Without Coverage: Too Little, Too Late, analyzed clinical research documenting the health effects on adults of being uninsured. The literature shows conclusively that uninsured adults tend to suffer worse health and risk dying sooner than individuals who are insured. The Committee broadened the focus beyond the individual to the family in its third report, Health Insurance Is a Family Matter. The report concluded that if even one family member is uninsured, the entire family faces an increased risk of financial catastrophe, poorer health, and diminished well-being. A Shared Destiny widens the Committee’s perspective from the family to entire communities. It explores the complex interrelationships between popula-

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A Shared Destiny: Community Effects of Uninsurance tions of insured and uninsured, the financial viability of local health care institutions and practitioners, the financing mechanisms that support provision of health care services at the community level, and the effects that loss of key health care providers or institutions has on the overall health of a community. This relatively new and innovative approach to examining the broader consequences of health insurance disparities for populations overall presents a coherent historical and policy context for understanding how we all can be adversely affected by the lack of coverage within our communities. The report that follows this one will examine the economic costs (as described in the Committee’s first four reports) to society of maintaining an uninsured population of more than 41 million. The sixth and final report in this series will consider models, strategies, and policy options designed to expand coverage and will suggest principles to guide policy analysts and policy makers as they craft solutions to the problem of uninsurance in America. Mary Sue Coleman, Ph.D. Co-chair Arthur L. Kellermann, M.D., M.P.H. Co-chair February 2003

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A Shared Destiny: Community Effects of Uninsurance Acknowledgments A Shared Destiny: Community Effects of Uninsurance is the result of collaborative effort. The Committee acknowledges and thanks the individuals whose work made this publication what it is. The Committee especially recognizes the members of the Subcommittee on Community Effects of Uninsured Populations that developed this report: Christopher Queram, who served as its chair, David Baker, Regina Benjamin, Sandra Hernández, Ichiro Kawachi, Ronda Kotelchuck, Keith Mueller, Mary Tierney, Reed Tuckson, and Mary Wakefield. These members of the drafting subcommittee constitute a group with especially broad scope and depth of practical and research expertise in health care. They gave much time and thoughtful advice over the course of the report’s development. Darrell Gaskin, Johns Hopkins University, and Jack Needleman, Harvard University, conducted two original analyses examining the effect of local uninsured rates on hospital services and financial status as consultants to the Committee. In addition to preparing these research monographs (Appendix D of this report), Darrell and Jack served as expert resources to the Subcommittee, Committee, and project staff. Eugene Moyer, senior economist with the Department of Health and Human Services (retired), also served as consultant, providing expertise on the federal health insurance programs. Vic Miller, senior fellow with Federal Funds Information for States, volunteered his time and expertise on issues of intergovernmental finance and provided data on state-level spending and revenues to the Committee. The Committee and Subcommittee benefited from presentations from a number of experts on various issues covered in A Shared Destiny made during their meetings over the past year. Mohammad Akhter, president, American Public

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A Shared Destiny: Community Effects of Uninsurance Health Association; Robert Bitterman, University of North Carolina; E. Richard Brown, University of California at Los Angeles; Andrew Coburn, University of Southern Maine; Christopher Conover, Duke University; Jonathon Fielding, director of public health and health officer, Los Angeles County Department of Health Services; Irene Ibarra, Alameda Alliance for Health; Vic Miller, Federal Funds Information for States; Paul Offner, Georgetown University; and Hugh Waters, Johns Hopkins University, shared their research analyses, management experience, and perspectives with the Committee. The Committee also wishes to thank Paul Fronstin of the Employee Benefit Research Institute, Bill Finerfrock of the National Association of Rural Health Clinics, Michael Davern of the State Health Access Data Assistance Center, and Alicia Gable and Douglas Weihl of the Institute of Medicine’s Board on Health Promotion and Disease Prevention for contributing their time and expertise to this project. The Committee recognizes the hard work of staff at the Institute of Medicine. Program officer Lynne Snyder served as principal staff to the Subcommittee and conducted much of the literature review and fact gathering on which this report is based. Lynne worked tirelessly and resourcefully to pursue information and formulate issues for consideration by the Subcommittee and Committee in this relatively novel area of inquiry. Project co-director Wilhelmine Miller managed the work of the consultants and the overall drafting of A Shared Destiny. Codirector Dianne Wolman reviewed and edited multiple drafts of the report. Research associate Tracy McKay provided research assistance and prepared the manuscript for publication. Senior project assistant Ryan Palugod maintained the project’s research database and supported communications with Committee members and meetings logistics. This work is being conducted within the Board on Health Care Services, Janet Corrigan, director. Funding for the project comes from The Robert Wood Johnson Foundation (RWJF). The Committee extends special thanks to Risa Lavisso-Mourey, president, and Anne Weiss, senior program officer, RWJF, for their continuing support and interest in this project.

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A Shared Destiny: Community Effects of Uninsurance Contents     EXECUTIVE SUMMARY   1 1   INTRODUCTION   15     A Systems Approach to the Problems of Uninsurance,   17     Definition of “Community”,   19     Conceptualizing Community Effects of Uninsurance,   20     Methods,   25     Working Hypotheses About Community Effects,   26     Limitations of This Study,   31     Organization of the Report,   32 2   CONTEXT FOR COMMUNITY EFFECTS: UNINSURANCE AND THE FINANCING AND DELIVERY OF HEALTH SERVICES   34     Historical and Organizational Context of Health Care for Uninsured Americans,   35     Safety Net Services, Providers of Last Resort, and Mainstream Health Care,   42     Who Pays for Care for Uninsured Persons?,   53     Research Questions,   78     Summary,   80 3   COMMUNITY EFFECTS ON ACCESS TO CARE   82     Access to Care,   83     Primary Care,   86     Emergency Medical Services and Trauma Care,   92

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A Shared Destiny: Community Effects of Uninsurance     Specialty Care,   99     Hospital-Based Care,   101     Research Questions,   116     Summary,   119 4   ECONOMIC AND SOCIAL IMPLICATIONS OF UNINSURANCE WITHIN COMMUNITIES   120     The Context: Increasing Health Care Costs and Taxpayer Support,   121     Budget Implications for States and Localities,   123     Economic Base and the Potential for Development,   129     Social Consequences of Uninsurance: First Thoughts,   132     Research Questions,   136     Summary,   137 5   COMMUNITY HEALTH AND UNINSURANCE   138     Geographic and Socioeconomic Disparities in Health,   140     Public Health and Community Uninsurance,   143     Research Questions,   159     Summary,   160 6   SUMMARY: CONCLUSIONS AND RESEARCH AGENDA   164     A Research Agenda for Community Effects,   165     Conclusion,   173     APPENDIXES     A   Conceptual Framework for Assessing the Consequences of Uninsurance for Communities   175 B   Geographic Differences in Uninsured Rates   180 C   Data Tables   189 D   Commissioned Papers   203     The Impact of Uninsured Populations on the Availability of Hospital Services and Financial Status of Hospitals in Urban Areas, Darrell J. Gaskin and Jack Needleman   205     The Impact of Uninsured Discharges on the Availability of Hospital Services and Hospital Margins in Rural Areas, Jack Needleman and Darrell. J. Gaskin   221 E   GLOSSARY   236 F   BIOGRAPHICAL SKETCHES   242     REFERENCES   254

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A Shared Destiny: Community Effects of Uninsurance A Shared Destiny Community Effects of Uninsurance

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