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PSN on October 26, 2006 - 10:19am
A 2005 Families USA report estimated that uncompensated care, or bad debt and charity care, cost the US health care system $43 billion, resulting in an average increase of $922 in family health insurance policies through the year. A New York Times report discusses how some hospitals, in an effort to reduce their uncompensated care costs, are providing free primary care to uninsured patients with costly chronic conditions, recognizing that preventing emergencies that arise from untreated chronic conditions saves money and yields better health outcomes. Some patients involved have seen their costs reduced by half.
Because they have no insurance, the uninsured delay getting care until they can't wait any longer - when treatments are more expensive, recovery times are longer and health outcomes less certain. This is compounded for uninsured Americans with chronic conditions, like diabetes. To cover the costs of treating the uninsured, hospitals and other providers raise the rates they charge to payers and those who have coverage. But, the uninsured are not the only people who result in uncompensated care costs. In Maine, for instance, a 2004 survey by the Maine Hospital Association and the Governor's Office of Health Policy and Finance determined that 30% of hospital bad debt and charity care comes from people with insurance. These people most likely have high deductible health plans and can't pay down their deductible.
Americans can only expect bad debt and charity care costs to increase as rates of uninsured continue to rise and more businesses drop coverage or shift more of the burden of health care costs to employees. The 2006 Health Confidence Survey , released by the non-partisan Employee Benefit Research Institute, reports that 60% of respondents with insurance said the share they pay for their coverage has increased in the last year. In addition, rates of employer-based coverage continue to decline, down to 61% in 2004, according to the Henry J. Kaiser Family Foundation.
Despite these trends, the Right continues to push for consumer-driven health plans that put more of the cost-burden on employees and consumers, forcing them to make tradeoffs between getting needed care and providing for other family needs, such as food and clothing. The Health Confidence Survey found that 44% of Americans delayed going to their doctor when they were ill and 22% didn't fill prescriptions or skipped doses because of cost increases. Consumer-driven plans typically consist of high deductible insurance and are sometimes paired with a pre-tax health savings account. These plans presume that consumers have thousands of dollars to put away to save for health costs. But, as the Health Confidence Survey shows, rising costs are depleting the savings of many Americans. 36% say that cost increases have limited their ability to save for retirement, 33% said their savings have been depleted by rising costs, and 22% have increased their credit card debt. Increasingly shifting costs to consumers and expanding the use of high deductible insurance may be the Right's way to go, but accumulating evidence shows it is the wrong way.
As the New York Times report demonstrates, managing chronic conditions before emergencies arise creates savings and improves health outcomes. Rather than limiting access to preventive care as consumer-driven plans do, changing provider incentives to promote preventive care is a clear policy goal for progressives. It will result in better health and cost savings over the long term.