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1 Introduction The persistence of a large uninsured population in this country, regardless of the prevailing economic conditions, is remarkable. In 2000, when this three-year study of the consequences of uninsurance began, 39.4 million people under age 65 in the United States reported having no health insurance during the previous year.1 The uninsured population had grown by more than 6 million during the 1990s, despite a decade of strong economic growth, when health care inflation slowed and health spending flattened at just over 13 percent of the gross domestic product (GDP) between 1992 and 2001.2 Federal and state budgets had experi- enced surpluses, and states expanded their existing coverage programs and ex- plored new opportunities to cover more of their uninsured populations. Yet at the height of this prosperous period, 1998–2000, the number of uninsured dropped by less than a million; see Figure 1.1. In 2000, the uninsured rate began to grow once more. Despite fluctuations in economic and demographic trends, which can affect the numbers and percentage of the population insured, a large uninsured population has persisted over the past few decades. 1The estimate of 39.4 million uninsured is based on the Census Bureau’s March Current Popula- tion Survey (CPS) as are all annual estimates of the uninsured population of the United States presented in this report, unless otherwise noted. See Chapter 2 and Appendix A for a more detailed discussion of various measures of the uninsured rate and length of time people are uninsured, why they are uninsured, and characteristics of the uninsured. 2Italicized technical terms are defined in the glossary (Appendix B). 15

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16 17.2% 300 16.5% 16.1% 17.0% 16.2% 16.9% 16.4% 16.1% 15.9% 16.0% 15.7% 15.1% 14.9% 14.5% 14.4% 13.7% 250 200 150 100 Estimated Number (Millions) 50 36.5 37.3 31.7 40.7 39.4 40.9 29.5 32.9 33.6 35.4 36.4 38.3 39.0 31.1 39.9 43.3 0 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 FIGURE 1.1 Uninsured persons under age 65, number and proportion of general population under age 65, 1987–2002. NOTE: Estimates for 2000, 2001, and 2002 use Census 2000-based weights. SOURCES: Fronstin, 2002; Mills and Bhandari, 2003.

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17 INTRODUCTION Now, the uninsured population continues to increase in number, and the uninsured rate is expected to worsen in the continuing weak economy (Fronstin, 2002). Over 43 million people were reported uninsured in 2002, representing 17.2 percent of the population under the age of 65 (Mills and Bhandari, 2003).3 Unemployment is up now, state budgets are experiencing increased demands for services, state revenues are less than had been anticipated, and many states have significant budget shortfalls (National Governors Association, 2003; Rowland, 2003; U.S. Bureau of Labor Statistics, 2003a). The federal budget has returned to a deficit position as well. Health costs and health insurance premiums are again increasing faster than general inflation and more quickly than family and business incomes (Heffler et al., 2003; U.S. Bureau of Labor Statistics, 2003b). Many states are proposing or implementing cost containment measures for public coverage programs, although few have yet to cut eligibility substantially or covered services for their Medicaid and State Children’s Health Insurance Programs (SCHIP) and some are pursuing significant extensions of coverage as a means to reduce uncom- pensated care costs (Holahan et al., 2003d; Ross and Cox, 2003; Smith et al., 2003). The problem of uninsurance has been growing in urgency, not just because of the economy and increasing numbers of uninsured Americans. Insurance is so important now because the effectiveness of medical interventions, particularly medical technologies and pharmaceuticals, continues to increase, improving health and longevity (Cutler and Richardson, 1997; Murphy and Topel, 1999; Heidenreich and McClellan, 2003). Without insurance, people have less access to these new services and drugs. Thus, the gap between insured and uninsured people widens and raises questions of equity. This disparity in accesss to health care violates generally accepted American values of equal consideration and equal opportunity (IOM, 2003b). The failure of many attempts throughout the past century to extend health insurance coverage to everyone is a notable feature of health care in the United States. The lack of universal health insurance coverage places this nation along with Mexico and Turkey as the only ones among the developed countries around the globe with substantial uninsured populations (OECD, 2002). It is time to rethink the nation’s approach to financing access to health care for its population. PURPOSE OF THE PROJECT AND THIS REPORT In 2000, the Institute of Medicine (IOM) formed the Committee on the Consequences of Uninsurance to examine the evidence concerning the lack of health insurance for those without coverage, for their families, for their commu- 3Unless otherwise stated, this report will focus on the population under age 65 because the federal Medicare program provides nearly universal coverage for people at and above that age.

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18 INSURING AMERICA’S HEALTH nities, and for this country as a whole. Most often, an IOM study is self-contained in a single report that lays out the evidence leading to the Committee’s findings and conclusions and then proceeds to make recommendations. This project is unusual in that it was designed to produce six reports during the course of the three-year study that examine the issue of uninsurance critically and methodically from several different perspectives. The first five reports present evidence, find- ings, and conclusions on their given topics (see following descriptions of each). As planned from the outset, the Committee has withheld most of its recommenda- tions until it fully examined the issue. Therefore, this sixth and final report draws on the findings of the previous five reports, as well as an examination of selected historical efforts and federal, state, and local programs that were designed to extend coverage. The Committee uses the term “extend coverage” to mean having more people gain coverage who previously had had none and reducing the uninsured rate. That extension of coverage could be achieved through either expansion of existing insurance programs or creation of new mechanisms. The findings from the six reports as a whole have convinced the Committee that uninsurance is a critical problem for the United States that can and should be eliminated. The Committee believes that leaving over 43 million Americans uninsured is costly to the country and should no longer be tolerated. The intent in this final report is to present principles based on the Committee’s previous research, apply them to potential strategies to extend coverage and elimi- nate uninsurance, and make a strong case for taking action now. Although the report examines a wide range of approaches that have been proposed to extend coverage, it does not recommend a particular proposal. Rather, it presents prin- ciples and recommendations to guide the public, policy makers, and elected officials in crafting effective and achievable solutions. This report also provides examples of how to apply the principles to assess the strengths and weaknesses of various strategies to extend coverage. FINDINGS AND CONCLUSIONS FROM PREVIOUS COMMITTEE REPORTS The Committee’s first five reports identify the many consequences for the country of maintaining such a large uninsured population: • Coverage Matters: Insurance and Health Care (IOM, 2001a) provides an over- view of how health insurance works in America, and describes the socioeconomic and demographic characteristics of uninsured populations. It also sets out a con- ceptual framework for thinking about uninsurance; this framework has guided the analyses in all the following reports (see Figure 1.2 below). • Care Without Coverage: Too Little, Too Late (IOM, 2002a) assesses the clin- ical research concerning health consequences for uninsured adults, including over-

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PANEL 3 PANEL 2 PANEL 1 Process of Obtaining Access to Health Care Consequences of Uninsurance Determinants of Coverage Individual and Family Level Individual and Family Level • Eligibility (either for self or Resources: financial means, dependents) how health policies and health • Cost to enroll or maintain Health Care services organization apply to (including employer • Personal health the individual and to the family subsidy) practices • Administrative process of Characteristics: demographic, • Utilization of health enrolling or maintaining social, economic, cultural, and services coverage geographic • Processes of services Health Outcomes for • Knowledge of eligibility delivery Individuals Need: health status perceived Need: Decision to enroll or to • Needs by the individual or family maintain • Consumer satisfaction member and as evaluated by others Effects on Families Community Level Community Level • Health outcomes • Availability of employment- Resources: health policies, • Childhood development based, public, and private how services are organized, • Economic effects coverage how services are financed Characteristics: demographic, social, economic, cultural, and geographic Effects on Communities • Economic effects Needs: as identified by public • Population health measures or population health indicators • Health care institutions FIGURE 1.2 A conceptual framework for evaluating the consequences of uninsurance—a cascade of effects. NOTE: Italics indicate terms that include direct measures of health insurance coverage. 19 SOURCE: IOM, 2001a.

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20 INSURING AMERICA’S HEALTH all health status, the incidence of specific diseases, avoidable hospitalizations, the quality of care received, preventable morbidity, and premature mortality. • Health Insurance Is a Family Matter (IOM, 2002b) examines similar health effects for children and pregnant women. In addition, it expands the focus beyond the individual to include the effects of one or more uninsured family members on others in the family, including those with insurance, and on the family as a unit. • A Shared Destiny: Community Effects of Uninsurance (IOM, 2003a) looks at wider “spillover” effects of uninsurance on the local community, insured as well as uninsured residents, and specifically on its health care providers. • Hidden Costs, Value Lost: Uninsurance in America (IOM, 2003b) details the costs to the country of sustaining such a large uninsured population. Many of the costs identified in the earlier reports are quantified. The costs of additional health care services likely to be used by those who are now uninsured, if they were to gain coverage, are also calculated. The Committee concludes that allowing a sizable uninsured popula- tion to persist has serious negative consequences for individuals, families, communities, and the entire nation. Collectively, these five reports show that current insurance mechanisms have not eliminated the large, persistent uninsured population and indeed are not structured to do so. The current system relies on an assortment of private and public sources to provide coverage, each of which meets the needs of some people, while leaving millions uncovered. Instead of approaching the problem in tentative incremental steps, the Committee believes that citizens and policy mak- ers should begin by setting as an explicit goal that the health insurance system should include everyone, then determine the private and public policies and actions necessary to achieve that end, and enact and implement those policies. The Committee concludes that major, comprehensive reform of the health insurance system, rather than expansion of the “safety net,” is essential. The “safety net” loosely refers to health care facilities and programs that disproportionately serve needy and uninsured people. If financial access to health care services were assured, people would be able to choose among providers in their community and not be dependent upon safety-net institutions, as uninsured people are now. Also, the availability of payments from insurers could strengthen the financial stability of those providers and institutions, which are stressed by the current economy and growing demands for services (IOM, 2003a; KCMU, 2003a). Safety-net services, institutions, and accommodating providers vary widely from state to state and area to area, have ill-defined responsibilities, are inadequate to meet current needs of the uninsured, and are unlikely to meet future needs (Lewin and Altman, 2000; Hadley, 2002; IOM, 2003a). Strengthening safety-net services would not be an adequate alternative to expanding health insurance coverage. For example, federally supported primary

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21 INTRODUCTION care clinics, including community health centers, have a heavy case load of unin- sured clients but serve only 6.5 to 10 percent of the total uninsured population. Most uninsured people do not live near a center (Cunningham and Tu, 1997; IOM, 2003a). Persons receiving primary care in such centers often have difficulty obtaining specialty, diagnostic, and behavioral health services for which they are referred (Gusmano et al., 2002). An analysis of 13 states shows that access for uninsured lower income adults varies depending on local services capacity. How- ever, even more striking in this analysis are the large gaps in access and use between the insured and uninsured populations in each state, regardless of the extent of local safety-net services (Holahan and Spillman, 2002). An analysis of racial disparities in access to care, based on national data from the Community Tracking Study (1996–1997 and 1998–1999), showed that lack of insurance is a significant barrier to access and more important than the supply of medical provid- ers and services in the community (Hargraves and Hadley, 2003). Thus, the Committee has concentrated on insurance-based financing mechanisms, not nec- essarily tied to one provider or facility, to facilitate access to care rather than on programs that might increase the availability of certain services in selected geo- graphic areas. The Committee’s definitions of health insurance and uninsured status are consistent with those adopted in its previous reports. Health insurance is defined by the Committee as financial coverage for basic hospital and ambulatory care services, whether provided through employment-based indemnity, service-ben- efit, or managed care plans; individually purchased health insurance policies; pub- lic programs such as Medicare (which covers virtually all persons 65 years of age and older), Medicaid, and the SCHIP; or other state-sponsored coverage for specified populations. Uninsured refers to persons without any form of public or private coverage for hospital and outpatient care, for any given length of time. In large part this operational definition reflects that used in virtually all studies that attempt to discern and measure the impact of coverage status on health and other individual and community outcomes. Although length of time without coverage almost certainly will make a difference, the information typically available about individual health insurance status (at baseline or inception of a study) tends to obscure differences between insured and uninsured populations and thus likely underestimates the negative effects of being uninsured. Throughout its series of reports, the Committee has not attempted to address the condition of underinsurance, by which is meant individuals or families whose health insurance policy or benefits plan offers less than adequate coverage. The problems faced by the underinsured are in some respects similar to those faced by the uninsured, although they are generally less severe (IOM, 2002a, b). Unin- surance and underinsurance involve some distinctly different policy issues and the strategies for addressing them may differ. Throughout these reports, the Com- mittee’s main focus has been on persons with no health insurance and thus no assistance in paying for health care beyond what is available through charity and safety-net arrangements.

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22 INSURING AMERICA’S HEALTH A COMPARISON OF THE UNITED STATES AND OTHER DEVELOPED COUNTRIES Having insurance improves access to health services, and access to health care is associated with better health among the uninsured. (See Figure 1.2, the concep- tual framework that has guided this project.) The health care provided in America’s best medical centers is world renowned; many people come from abroad to benefit from the high-quality care available in this country. Tens of millions of Americans, however, are uninsured and do not receive the services they need (IOM, 2002a, b). In the United States, health insurance has evolved from a mechanism to protect against only infrequent and serious health events and expenses to one that also finances routine health care and encourages the use of preventive services (IOM, 2001a). In addition to lowering financial barriers to care, health insurance improves the receipt of appropriate care by facilitating the use of a regular source of care or primary care provider. Coverage is an important determinant of obtain- ing and maintaining an ongoing relationship with a health care provider (IOM, 2001a; Holahan and Spillman, 2002). Even if uninsured persons receive primary care, referrals to specialists, ancillary diagnostic and treatment services, and medi- cations are more difficult to obtain without coverage (Fairbrother et al., 2002). Both continuity of care and continuity of insurance coverage are important; breaks in coverage can disrupt care relationships to the detriment of high-quality health care. Being uninsured for longer periods of time can be expected to have larger negative effects on utilization of services (and consequently on health) than being uninsured for shorter periods (IOM, 2002a). The 43 million Americans who lack health insurance coverage for a year or more are more likely to suffer worse health and die sooner than Americans with health insurance (IOM, 2002a, b). A comparison of the health care system in the United States and the average health of the U.S. population with that found in other countries highlights the reason why Americans should be dissatisfied with the status quo. Although the health care system in this country has accomplished a great deal, it can do much better in improving the quality of health services and the health of its population. Lowering financial barriers to needed health services is one important improve- ment to achieve this goal. Table 1.1 includes health system and health status indicators of the United States and several other developed, high-income countries.4 Several conclusions can be drawn from this table and the comparative international literature re- viewed: 1. The United States ranks the highest in health care spending per capita and as a percentage of GDP. In 2000, the United States spent 13 percent of its GDP and 4Much of these comparative data are based on the total population, including persons over age 65.

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TABLE 1.1 Health Care System Indicators in Selected Countries, 1997–2000 1 2 3 4 5 Total Health Health Spending Infant Mortality Disability-Adjusted % Total Spending as a Per Capita Rate, Deaths per Life Expectancy Population Percent of GDP in U.S. Dollars 1,000 Live Births in Years Publicly Covered Country 2000 2000a 2000 1997–1999 2000 United States 13.0 4,631 6.9 70.0 86 b Australia 8.3 2,211 5.2 73.2 100 Canada 9.1 2,535 5.3 72.0 100 Denmark 8.3 2,420 5.3 69.4 100 c Finland 6.6 1,664 3.8 70.5 100 France 9.5 2,349 4.6 73.1 99.8 Germany 10.6 2,748 4.4 70.4 92.2 d Italy 8.1 2,032 4.5 72.7 100 Japan 7.8 2,012 3.2 74.5 100 Luxembourg NA NA 5.1 71.1 100 d Norway 7.8 2,362 3.8 71.7 100 Sweden NA NA 3.4 73.0 100 Switzerland 10.7 3,222 4.9 72.5 100 United Kingdom 7.3 1,762 5.6 71.7 100 NOTES: aAdjusted for cost-of-living differences, purchasing power parities. b86 percent of total population was insured; 24 percent of total population was publicly covered in 2000 (Mills, 2001). c1999 data. d1997 data; Germany’s insured rate is close to 99 percent including primary private insurance (Personal communication, Jeremy Hurst, OECD, September 11, 2003). SOURCES: (Columns 1,2,3,5: OECD, 2002; column 4: WHO, 2000). 23

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24 INSURING AMERICA’S HEALTH $4,631 per capita on health care (Table 1.1, columns 1 and 2) (OECD, 2002). This spending far surpassed the next most expensive health care systems, those of Switzerland (10.7 percent of GDP) and Germany (10.6 percent of GDP). The per capita amount spent in the United States is more than twice that of most of the other countries of similar economic standing. While the U.S. spends substantially more than the other countries, its measures of use of services, such as physician visits and hospital days per capita, are below the Organization for Economic Cooperation and Development (OECD) median (Anderson et al., 2003). The implication is that the prices of those services are higher in the U.S. (Anderson et al., 2003). 2. The health care system in the United States is deemed to be the most responsive in the world to nonhealth aspects of care, such as respect for the individual, protection of confidentiality, opportunity to participate in choices of treatments and provid- ers, provision of prompt attention, and clean surroundings (WHO, 2000).5 The OECD, in a recent assessment of the performance of the U.S. health care system, similarly found that it is very responsive to consumer preferences. For example, there is virtually no waiting time for elective procedures in the United States, unlike many OECD member countries and most Americans are highly satisfied with the care they receive (Docteur et al., 2003). 3. Comparative international surveys document the high availability of medical tech- nology in the United States and the fact that it is intensively used (Docteur et al., 2003). For example, the United States was quicker to adopt and diffuse new technologies involved with care of heart attack patients than most of the 17 other developed countries studied (TECH Research Network, 2001). The number of coronary angioplasties in the United States per 100,000 population is more than two times that in Germany and even further ahead of Australia, Canada, New Zealand, and England. While the rates are not adjusted for disease prevalence, the large differ- ence in rates suggests different patterns of treatment and diffusion of new treat- ments and technologies (Anderson et al., 2003). Compared with Australia, Canada, France, Germany, Japan, New Zealand, and the United Kingdom, the United States is second only to Japan in the availability of magnetic resonance imaging units: 23.2 in Japan versus 8.1 units in the United States per one million popula- tion. The United States has 14 computed tomography scanners per million per- sons, compared with Japan (84), Australia (21), Germany (17), and the OECD median (12) (Anderson et al., 2002). 4. Although the United States ranks highest in health care spending (in total and as a percentage of GDP) and ranks high in the availability of medical technology, this spending has not produced comparably high measures of health status. The health of Americans 5It should be noted that some of the World Health Organization rankings, while innovative, have been controversial. For the responsiveness ranking, the data were gathered from nearly 2000 key informants in 35 countries and the distribution of responsiveness for the remaining countries (156) was estimated using indirect techniques (WHO, 2000; Musgrove, 2003).

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25 INTRODUCTION consistently ranks poorly relative to that of residents of other industrialized na- tions. Certainly the health status of a population reflects more than just medical care and the heterogeneity of the U.S. population distinguishes it from many other developed countries. Nonetheless, international comparisons provide a useful per- spective on our own society and indicate areas for improvement. A comparison of 13 countries based on 16 health indicators conducted by Barbara Starfield (2000) determined the United States ranked among the worst, on average twelfth. The countries included in the study were, in order from the top ranked (best health status) to the lowest, as follows: Japan, Sweden, Canada, France, Australia, Spain, Finland, the Netherlands, United Kingdom, Denmark, Belgium, United States, and Germany. The United States came in last for three indicators (low birth weight; neonatal mortality and infant mortality overall; years of potential life lost), even after excluding external causes such as motor vehicle collisions and violence. Also, OECD comparisons ranked the United States twenty-fifth in male life expectancy and nineteenth in female life expectancy out of 29 developed countries. Infant mortality rates and life expectancy, and also disability-adjusted life expectancy (DALE), are among the most commonly used measures of population health. They are widely considered valid indicators of the overall effectiveness of the health care system, although many other factors also affect the health of a population.6 As of 2000, the infant mortality rate in the United States was 6.9 infant deaths per 1,000 live births (OECD, 2002). Although this number repre- sented a historic low for the United States, our infant mortality rate is nonetheless the highest among the listed countries (see Table 1.1, column 3). Even if one considers the U.S. infant mortality rate (5.7) for white infants only, whose mothers generally have a higher social and economic status than nonwhite mothers, it is still a higher rate than all the other countries. The 2000 infant mortality rate for black infants in the United States (14.1 deaths per 1,000 live births) was more than twice the white rate of 5.7 (National Center for Health Statistics, 2002). Starfield found that, among the 13 countries she studied, the United States came in eleventh for life expectancy of females at age 1 and twelfth for males at age 1. Table 1.1, (column 4), shows that the United States has a DALE of 70 years. Of those countries listed in Table 1.1, only Denmark had a lower DALE, 69.4 years. 5. The United States is among the few industrialized nations in the world that does not guarantee access to health care for its population (see Table 1.1, column 5). Of 30 industrialized countries included in OECD health data, only Mexico and Turkey have higher uninsured rates. Nearly all the OECD countries provide public insurance for 99 to 100 percent of their population; Germany has substan- tially higher coverage than the 92.2 percent publicly covered, when primary private health insurance is included (OECD, 2002; personal communication, 6Disability-adjusted life expectancy is the number of healthy years of life that can be expected on average in a given population (WHO, 2000).

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26 INSURING AMERICA’S HEALTH Jeremy Hurst, OECD, September 11, 2003). In contrast, only 86 percent of the U.S. population had health insurance in 2000, 24 percent covered by public programs (Mills, 2001). The way that health care is organized and delivered in the United States and the limited access of uninsured persons contribute to our country’s relatively low- ranking health indicators, despite high levels of spending. The OECD assessment of the United States concluded that “Incomplete insurance coverage and delayed access to care adversely affect population health outcomes and possibly economic performance” (Docteur et al., 2003, p.41). The IOM Committee on Assuring the Health of the Public in the 21st Century also found that the health of the Ameri- can population is compromised by the lack of insurance for so many (IOM, 2003c). These findings are clearly consistent with the findings of the first five reports in this project on uninsurance. The large disparities in access to care and health outcomes experienced between the insured and the 15 percent of the total population that is uninsured in the United States may explain, in part, the low national rankings despite high spending. HEALTH CARE REFORM AND HEALTH INSURANCE REFORM This report distinguishes between the health care delivery system and the health insurance system. The primary focus of this project is on health insurance.7 Reform of the health care delivery system is beyond the scope of this Committee’s work, although other IOM Committees have identified serious problems with the sys- tem and made recommendations for reform. This report recognizes the work of those IOM Committees and the problems they have identified, noting the inter- relatedness of delivery system reform with strategies to reform health insurance (Field et al, 1993; Edmunds and Coye, 1998; Smedley and Syme, 2000; IOM, 2001b, 2003c; Corrigan et al., 2003; Smedley et al., 2002). Box 1.1 presents some findings from key IOM reports, listed chronologically by the date of their release. Reform of the health care delivery system requires attention to issues such as cost control mechanisms, quality improvement, health workforce training, medi- 7In this country, neither health care nor health insurance can be characterized as a system and the Committee uses the word “system” with some hesitation. Our previous research makes it clear that health insurance in this country more closely resembles a hodgepodge or a patchwork quilt than an organized system. There are numerous ad hoc arrangements that vary from state to state, often leaving big gaps in coverage. Public coverage programs are targeted to specific subsets of the population; regulation of private insurance varies substantially by state and is constrained by federal and state laws; private employment-based coverage depends on the types of businesses in the area as well as economic conditions; and no single agency or person has responsibility for pulling together the pieces to ensure coverage for the whole population. Nonetheless, for convenience this report will use the term “health insurance system” when it refers broadly to the issues, players, and programs mentioned above that relate to financial access to care.

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27 INTRODUCTION cal liability compensation systems, and implementation of information technology systems to promote more effective care patterns and administrative procedures. After careful examination, the IOM Committee on Quality of Health Care in America concluded that “The American health care delivery system is in need of fundamental change” and systemwide reform (IOM, 2001b). Changes in all these areas could contribute to better and more efficient health care for all and to improved opportunities for covering those without health insurance. The quality and cost of health care certainly can be affected by the health insurance system, and the reverse is also true. The Committee on the Consequences of Uninsurance, however, did not undertake the scope of research necessary to recommend reform of the entire care delivery system. It has focused on the effect of financial access to that system through health insurance. This Committee urges that extension of health coverage not be delayed until the whole health care delivery system is reformed first, nor should the transformation of care delivery be delayed until all Americans are insured. Reform of both the health care delivery system and the insurance system should move ahead expeditiously and consider the long-range goals of each as well as the overall evolution of health care. ORGANIZATION OF THIS REPORT The next chapter of this report presents the key findings and conclusions from all five of this Committee’s previous reports in a systematic way to show the basis for its recommendations in this report. Because the earlier reports include all the research supporting each finding, only the most relevant studies are cited in this chapter. The third chapter provides a historical overview of selected efforts during the past century to provide comprehensive coverage to the whole population or to the uninsured segment of it. It also examines several different approaches to extending health insurance coverage that have been implemented over the past 15 years, including examples from federal, state, and local programs in the public and private sectors. Chapter 4 presents the Committee’s guiding principles for reforming the health insurance system. The Committee recognizes as important certain evi- dence-based principles that describe characteristics of an effective health insurance system, regardless of its particular structure. The principles can be used to examine current proposals to extend health insurance coverage and to help develop new approaches that would combine the best of existing ideas or break new ground. In Chapter 5 the Committee sketches several prototypical approaches to fundamental reform that vary quite dramatically in the means they propose to use to move toward universal coverage. They are drawn from the broad range of insurance extension options that have been put forth by various interest groups, policy analysts, and political groups of all persuasions. The wide range of these proposals demonstrates that there are potentially many pathways to achieving

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28 INSURING AMERICA’S HEALTH BOX 1.1 Other Institute of Medicine Reports 1. The Committee on Assessing Health Care Reform Proposals concluded in Assessing Health Care Reform that improved access and health status required more than just financial access. It should include: • broad public health and health education initiatives; • efforts to structure services, systems, and financing to more effectively reach special populations; • expanded access to primary and preventive services; • clinical and health services research; and • programs of quality assurance (Field et al., 1993). 2. The Committee on Children, Health Insurance, and Access to Care, in Ameri- ca’s Children, evaluated evidence about the link between coverage and access to health care for children, with particular attention to the availability of care for unin- sured and underserved children. It concluded that all children should have health insurance. In addition, it found a lack of affordable health insurance products that address the specific needs of children, including those with chronic or special needs, and it found that inadequate efforts for outreach and enrollment procedures and insufficient coordination efforts of public programs hinder enrollment (Ed- munds and Coye, 1998). 3. The Committee on Capitalizing on Social Science and Behavioral Research to Improve the Public’s Health, in Promoting Health, focused on social and behavior- al factors, such as smoking, diet, alcohol use, sedentary life style, and accidents, which influence the health and disease of the American population. It recommend- ed: • a better balance between the clinical approach to disease and social and behavioral determinants of disease, injury, and disability; and • interventions that link multiple levels—individual, interpersonal, institutional, community, and policy levels (Smedley and Syme, 2000). 4. The Committee on Quality of Health Care in America, in Crossing the Quality Chasm, recommended: • redesigning health care processes to establish continuous healing relation- ships, evidence-based decision making, patient safety, the reduction of waste in the health system, and cooperation among clinicians; • building an information infrastructure to support care delivery; and fundamental reform. To show how the principles can be used, they are applied to the prototypes we present so that the strengths and limitations of each approach are revealed. In the sixth and last chapter, the Committee presents its recommendations concerning health insurance. They are based on the findings in Chapter 3 con- cerning coverage extensions and those enumerated in Chapter 2, and on the

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29 INTRODUCTION • structuring payment systems to promote quality care, which should be safe, effective, patient-centered, timely, efficient, and equitable (IOM, 2001b). 5. The Committee on Rapid Advance Demonstration Projects: Health Care Fi- nance and Delivery Systems, in Fostering Rapid Advances in Health Care, high- lighted problems of the health care delivery system for coverage of the uninsured, chronic care, primary care, information and communications technology infrastruc- ture, and medical liability that could be ameliorated by the establishment of multi- ple demonstrations to test reform options. It included recommendations that the federal government commit funds for 10 years for demonstrations in three to five states to extend stable, affordable coverage through the use of tax credits, or eligibility expansions of Medicaid and SCHIP, or a combination approach (Corri- gan et al., 2003). 6. The Committee on Understanding and Eliminating Racial and Ethnic Disparities in Health Care, in Unequal Treatment, recommended a comprehensive, multilevel strategy to eliminate disparities, including: • strengthening of patient-provider relationships in publicly funded health plans; • using clinical, evidence-based guidelines to promote consistency and equi- ty of care; • providing economic incentives for physician practices to reduce communi- cations barriers; • using the payment systems to ensure an adequate supply of services to minority patients; and • employing multidisciplinary treatment and preventive care teams (Smedley et al., 2002). 7. The Committee on Assuring the Health of the Public in the 21st Century, in The Future of Public Health in the 21st Century, described numerous public health problems, including: • an inadequate public health infrastructure; • lack of knowledge about the determinants of population health; and • the mismatch between health care spending and health outcomes. This Committee concluded that adequate population health cannot be achieved if comprehensive and affordable health care is not available to everyone in the Unit- ed States (IOM, 2003c). findings and conclusions in the Committee’s previous five reports. The recom- mendations also articulate fundamental shared values across the diverse Commit- tee membership. The Committee’s intention is that this report, and indeed the whole project, should both encourage and inform public debates about the unin- sured and make those debates accessible to a wide range of Americans.