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Committee on the Consequences of Uninsurance
Board on Health Care Services
THE NATIONAL ACADEMIES PRESS
Washington, D.C.
www.nap.edu
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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 Govern-
ing 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 agency.
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International Standard Book Number 0-309-52826-7 (PDF)
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For more information about the Institute of Medicine, visit the IOM home page at
www.iom.edu.
Copyright 2004 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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“Knowing is not enough; we must apply.
Willing is not enough; we must do.”
—Goethe
Shaping the Future for Health
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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 responsi-
bility 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 Acad-
emies 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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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, 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, 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, Massachusetts
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, MacColl Institute for Healthcare
Innovation, Center for Health Studies, 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.
v
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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
Consultant
Cheryl Ulmer, Writer
*Served until August 2003.
vi
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Reviewers
This report has been reviewed in draft form by individuals chosen for their
diverse perspectives and technical expertise, in accordance with procedures ap-
proved by the National Research Council’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, evi-
dence, 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:
Sheila Burke, Smithsonian’s Under Secretary for American Museums and
National Programs, Smithsonian Institution, Washington, DC.
Robert Cunningham, Deputy Editor, Health Affairs, Bethesda, MD.
Helen Darling, President, Washington Business Group on Health,
Washington, DC.
Michael M. E. Johns, Executive Vice President for Health Affairs, Emory
University, Atlanta, GA.
Charles N. Kahn, III, President, American Federation of Hospitals,
Washington, DC.
Catherine McLaughlin, Director, Economic Research Initiatives on the
Uninsured, University of Michigan, Ann Arbor.
Mark Pauly, Bendheim Professor, The Wharton School, University of
Pennsylvania, Philadelphia.
Trish Riley, Executive Director, National Academy for State Health Policy,
Portland, ME.
vii
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viii REVIEWERS
Diane Rowland, Executive Vice President, Kaiser Family Foundation,
Washington, DC.
Leonard Schaeffer, Chief Executive Officer, WellPoint Health Networks,
Inc., Thousand Oaks, CA.
Rosemary Stevens, Stanley I. Sheerr Professor in Arts and Sciences, Emerita,
University of Pennsylvania, Philadelphia.
Although the reviewers listed above have provided many constructive com-
ments and suggestions, they were not asked to endorse the conclusions or recom-
mendations 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, and
Joseph P. Newhouse, John D. MacArthur Professor of Health Policy and
Management, Harvard University. Appointed by the National Research
Council and Institute of Medicine, they 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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Foreword
Insuring America’s Health: Principles and Recommendations concludes the series of
groundbreaking reports by the Institute of Medicine and its Committee on the
Consequences of Uninsurance. The previous five Committee reports, issued be-
tween October 2001 and June 2003, have established both a broader conceptual
framework and a new empirical evidence base with which to assess the implica-
tions of our nation’s policies regarding health insurance and of the lack of coverage
for one out of every seven Americans.
Beginning with Coverage Matters, which dispelled common misconceptions
about who lacks health insurance, why, and the access implications of being
uninsured, the Committee’s reports examine multiple facets of the problem of
uninsurance and systematically address questions relevant for public policy. Care
Without Coverage: Too Little, Too Late documents the serious health risks that the
lack of coverage poses for adults. Health Insurance Is a Family Matter extends this
examination of health outcomes to those of pregnant women and infants and
children, and considers the psychosocial and financial impacts that the lack of
health insurance for any family member has on the whole family. The Committee’s
fourth report, A Shared Destiny: Community Effects of Uninsurance, extends the
scope of analysis even further, to conceptualize and determine how the presence
of uninsured residents might affect the health, health care, and social and eco-
nomic life of neighborhoods, towns, cities, and rural areas. Notably, this report
includes an original study of community-level effects of uninsurance on the avail-
ability of hospital services and hospital financial margins. In Hidden Costs, Value
Lost, its fifth report, the Committee presents an innovative assessment of the
economic implications of the lack of health insurance across society. This analysis
considers the economic value lost to the nation in terms of the poorer health and
ix
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x FOREWORD
shorter lives of uninsured Americans relative to the cost of providing health care
services to those without coverage comparable to what insured people enjoy.
Anyone who has become familiar with the wealth of timely information and
the thoughtfully presented analytic discussions in these reports on the conse-
quences of uninsurance is in a much better position to join in the national policy
debate concerning the extension of health insurance coverage. Once again, after a
decade during which the issue was effectively tabled, the debate revolves less
around whether or not universal health insurance coverage is a good idea than it
does about the best way to accomplish that goal. Insuring America’s Health: Principles
and Recommendations, the Committee’s final installment in its series, collects the
Committee’s insights developed over the course of this project and demonstrates
how this understanding of the virtues and advantages of health insurance can be
used to evaluate and make choices among reform strategies.
I commend this volume to you as a most useful tool with which to approach
the task of reforming American health insurance.
Harvey V. Fineberg, M.D., Ph.D.
President, Institute of Medicine
January 2004
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Preface
Insuring America’s Health: Principles and Recommendations is the sixth and last
report in a series by the Institute of Medicine Committee on the Consequences of
Uninsurance. The Committee began this project three years ago with the intent to
consolidate the ever-growing evidence on uninsurance effects and to communi-
cate our findings to policy makers, the media, and the public. Our hope was that
these reports would stimulate a more informed public debate and a reexamination
of the issue of financial access to health care. At the time the Committee began its
work in 2000, about 40 million Americans lacked any health insurance coverage,
despite the strong economy of the previous decade. Since then, another three
million individuals have been added to the rolls of the uninsured.
The Committee’s first five reports carefully assess and document the nature
and severity of the problems resulting from uninsurance. The clinical literature
overwhelmingly shows that uninsured people, children as well as adults, suffer
worse health and die sooner than those with insurance. Families with even one
member who is uninsured lose peace of mind and can become burdened with
enormous medical bills. Uninsurance at the community level is associated with
financial instability for health care providers and institutions, reduced hospital
services and capacity, and significant cuts in public health programs, which may
diminish access to certain types of care for all residents, even those who have
coverage. The economic vitality of the nation is limited by productivity lost as a
result of the poorer health and premature death or disability of uninsured workers.
The Committee has estimated that the economic value lost because of poorer
health and earlier deaths among uninsured Americans is between $65 billion and
$130 billion annually.
Although some of these conclusions from the Committee’s research may
seem self-evident to those who regularly study this issue, they counter widely held
misperceptions about the personal consequences of uninsurance for tens of mil-
lions of Americans. The Committee’s findings about family impacts, community-
level consequences, and the societal costs of uninsurance break new ground on
xi
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xii PREFACE
topics that previously received little attention. Each of the reports organizes a
wealth of information within a unified conceptual framework to clarify the mag-
nitude, extent, and impacts of this complex and multifaceted problem. The Com-
mittee finds the consistency of the evidence, and the scope and scale of its conse-
quences, compelling. Can we afford not to cover the uninsured?
Why hasn’t more been done to eliminate uninsurance? Could extension of
coverage be achieved through incremental expansions of existing programs or
through comprehensive reforms? What should be done? These questions are ex-
amined in detail in this, the final report of the series. A historical review shows that
numerous attempts have been made to extend coverage in this country, beginning
a century ago, but most of these efforts have been thwarted or fallen short of
expectations. On the strength of this experience, the Committee concludes that
further efforts to gradually expand coverage through incremental reforms are
unlikely to succeed. Instead, the Committee proposes a clear and compelling
goal—within 6 years, everyone in the United States should have health insurance.
Based on the Committee’s evidence and findings in its first five reports, it has
crafted a checklist of principles that can be used to assess the adequacy and impact
of various models or proposals to cover the uninsured. There are many current
proposals for achieving universal coverage; the Committee does not recommend
or propound any particular model. However, the Committee’s final report, and
the findings of its five previous reports, provides an evidence-based framework to
consider the pros and cons of current and future proposals to achieve universal
coverage. The Committee urges our national leadership to move forward expedi-
tiously.
What happens next is up to policy makers, elected officials, and the American
public. In light of the many consequences of uninsurance, and the continuing
stress it imposes on the very fabric of America’s health care system, this problem
can no longer be ignored. Uninsurance can be eliminated, but it will require the
support of the public, considerable technical expertise by policy makers, a spirit of
compromise among stakeholders, and courage from our elected officials. We
firmly believe that universal coverage of the U.S. population is both feasible and
imperative.
As co-chairs, we thank our fellow Committee members for sharing so gener-
ously of their expertise and time. Their commitment over the duration of this long
project has been outstanding. Although the term of the Committee will soon end,
our dedication to implementing the recommendations of this report will endure.
We look forward to a time in the not-too-distant future when studies of
uninsurance no longer will be needed because everyone will be covered.
Mary Sue Coleman, Ph.D.
Co-chair
Arthur L. Kellermann, M.D., M.P.H.
Co-chair
January 2004
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Acknowledgments
It is a pleasure to thank the many people who have participated in the
development of Insuring America’s Health, as well as those who have contributed to
the work of the Committee over its three-year term.
The members of the Subcommittee on Strategies and Models for Providing
Health Insurance prepared this report for the Committee’s consensus review and
issuance. Shoshanna Sofaer chaired the Subcommittee. Members included Patricia
Butler, George Eads, Jack Ebeler, Barbara Matula, Len Nichols, Christopher
Queram, Reed Tuckson, Edward Wagner, and Alan Weil. Through intense
discussions, in person and by e-mail, they guided staff, particularly in the historical
analysis and the design and analyses of the coverage models. Their expertise has
been invaluable to the Committee. Writer Cheryl Ulmer served as a consultant to
the Committee on this report and throughout the project. Herman Beals and
Joanna Rios provided Spanish translation services for the brief summaries of each
report.
Presentations by a number of experts provided a wealth of insights and
evidence for consideration by the Committee and Subcommittee, and the Com-
mittee thanks them for their contributions of time and expertise. Karen Davis,
President of the Commonwealth Fund, reviewed federal efforts and options to
expand coverage at a meeting of the full Committee in October 2002. Deborah
Chollet, Mathematica Policy Research, Rick Curtis, Institute for Health Policy
Solutions, Judy Feder, Georgetown University, Vickie Gates, State Coverage
Initiatives, AcademyHealth, and Jack Meyer, Economic and Social Research
Institute, discussed issues related to coverage expansions at the local, state, re-
gional, and national levels at the Subcommittee’s November 2002 meeting in
Washington, DC. Irene Ibarra, Alameda Alliance, and Richard Kronick, Univer-
sity of California at San Diego, shared their experiences and research on local
expansions at the February 2002 Committee meeting in San Francisco. In addi-
xiii
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xiv ACKNOWLEDGMENTS
tion, the Committee would like to thank Senator Rosalyn Baker of Hawaii, Toni
Beddingfield, Dennis Chu, Jeffrey Lazenby, Nina Maruyama, and Karl Polzer for
their insights about the experiences of states and localities with coverage expan-
sions.
The depth and comprehensiveness of this project was possible because of a
rich research base and a widely published body of literature. Research and analysis
of issues related to uninsurance has been facilitated by the support of three key
foundations: the Commonwealth Fund, the Kaiser Family Foundation, and The
Robert Wood Johnson Foundation. We are grateful for their longstanding and
ongoing support of intellectual inquiry on the topic of the uninsured.
The Committee would like to thank the Institute of Medicine (IOM) project
staff for their skilled work on Insuring America’s Health. Project co-director Dianne
Wolman served as principal staff to the Subcommittee and coordinated the draft-
ing of the report. Project co-director Wilhelmine Miller advised on and edited
multiple drafts. Program officer Lynne Snyder assisted in drafting and editing,
particularly Chapter 3. Research associate Tracy McKay conducted literature
searches. Senior project assistant Ryan Palugod maintained the project’s research
database, prepared the manuscript for publication, and managed the logistics of the
Committee’s travel and meetings. The wholehearted commitment of the entire
project team has made possible this three-year project, as well as the high quality
of the Committee’s products. The IOM Board on Health Care Services, directed
by Janet Corrigan, sponsors and provides overall guidance to the Committee.
Over the course of the Committee’s work, staff at the IOM and the National
Academies have ably and generously supported the production, public release, and
dissemination of the Committee’s six reports. IOM President Harvey Fineberg,
Past President Kenneth Shine, and Executive Officer Susanne Stoiber encouraged
and advised the Committee. The Committee also thanks Clyde Behney, Jennifer
Bitticks, Jennifer Otten, and Bronwyn Schrecker at the Office of Reports and
Communication; Craig Hicks, Bill Kearney, Lauren Morello, Barbara Rice, Bill
Skane, and Christine Stencel at the Office of News and Public Affairs; Jim Jensen
and Sandra McDermin at the Office of Government and Congressional Affairs;
Dorothy Lewis, Rachel Marcus, Will Mason, Ann Merchant, Estelle Miller, Lynn
Murphy, Dan Parham, and Sally Stanfield at the National Academies Press; Jenni-
fer Cangco, Teresa Redd, and Gary Walker at the Office of Finance and Admin-
istration; Linda Kilroy at the Office of Contracts and Grants; Bill McLeod of the
George Brown Library; and Tony Burton and Ann Greiner of the Board on
Health Care Services.
The Committee would like to thank The Robert Wood Johnson Foundation
for its generous and continued support of the project on the consequences of
uninsurance and especially acknowledges The Foundation’s president, Risa
Lavizzo-Mourey, this project’s program officer Anne Weiss, and Linda Bilheimer,
David Colby, and Stuart Schear for their interest and assistance with this project.
Finally, the Committee thanks co-chairs Mary Sue Coleman and Arthur
Kellermann for their leadership and commitment over the three-year course of the
Committee’s term.
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Contents
EXECUTIVE SUMMARY 1
1 INTRODUCTION 15
Purpose of the Project and This Report, 17
Findings and Conclusions from Previous Committee Reports, 18
A Comparison of the United States and Other Developed Countries, 22
Health Care Reform and Health Insurance Reform, 26
Organization of This Report, 27
2 LESSONS FROM PREVIOUS REPORTS 30
Understanding the Scope of Uninsurance and Sources of Coverage, 31
Assessing the Effects of Health Insurance on Health-Related Outcomes, 38
Family and Community Effects of Uninsurance, 48
Current Costs and Societal Costs Attributable to Uninsurance, 56
Effects of the Structure of Insurance, 60
Summary, 64
3 ELIMINATING UNINSURANCE: LESSONS FROM
THE PAST AND PRESENT 66
National Efforts to Broaden Coverage, 1916–1984, 66
Federal Initiatives to Extend Coverage Since 1984, 78
State Initiatives to Extend Coverage, 91
Local Initiatives to Extend Coverage, 103
Summary, 107
xv
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xvi CONTENTS
4 PRINCIPLES TO GUIDE THE EXTENSION OF
COVERAGE 110
Vision Statement, 111
Principles, 112
5 PROTOTYPES TO EXTEND COVERAGE: DESCRIPTIONS
AND ASSESSMENTS 118
Design Issues, 119
Selection of Prototypes, 124
Description of Prototypes for Extending Coverage, 126
Assessment of Prototypes for Extending Coverage, 132
Summary, 147
6 CONCLUSIONS AND RECOMMENDATIONS 153
Principles to Guide the Extension of Coverage, 155
APPENDIXES
A Data Tables 161
B Glossary and Acronyms 172
C Biographical Sketches 179
REFERENCES 188
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