TCS Daily

Universal Mistakes

By Sydney Smith - January 21, 2004 12:00 AM

Last week, when a Committee on the Consequences of Uninsurance from the Institute of Medicine, held a press conference to announce that universal healthcare coverage should be the priority issue of the next six years, someone asked the inevitable. "Why if the country could send the Rover robotic explorer to Mars, couldn't it see that all its people did not have health insurance?" As if providing universal healthcare were as simple as engineering a robotic Martian explorer.

The committee has spent the past three years examining the impact of the lack of health insurance, on both individuals and on communities. What did they find? That the uninsured visit doctors less frequently than the insured. That their mortality rates are twenty-five percent higher. And that lack of insurance is responsible for 18,000 needless deaths a year. The solution, at least to the committee, is clear. Provide everyone with health insurance. And do it quickly, whatever the cost.

But is a hastily enacted national health insurance plan what we really need? Even one needless death a year is one needless death too many. Yet, although 18,000 people die each year due to lack of insurance, over 43,000 people die each year in auto accidents, but no one's recommending we ban the automobile. And while it may be true that people with insurance visit doctors more frequently than those without insurance, frequent doctor visits do not necessarily translate into better health.

Take, for example, the case of the common cold. It isn't unusual for people with very generous health insurance benefits (say an HMO with no co-pay and complete drug coverage) to go to the doctor at the first sign of a runny nose or a fit of sneezing -- even though there is no cure for the common cold. Even an illusory benefit is worth the visit if there's no cost. But, it isn't necessarily in the patient's -- or the community's -- best interest. Patients who visit doctors for a cold are much more likely to go home with an antibiotic. And antibiotics taken for a common cold, especially on multiple occasions, lead to drug resistant infections. A very serious problem due entirely to medical overkill.

But it isn't concern about excess mortality or infrequent doctor's office visits that drives the IOM committee's urgency on the matter of universal health insurance. The committee's main concern is the economic impact of the uninsured on hospitals:

"Right now we don't have enough hospital beds in metropolitan Atlanta to meet needs of the community," Kellermann [one of the authors of the report] said. He said hospitals all over the country "have had to take the airlines' approach: fill every seat."

A principal reason for financial problems leading to this situation, he said, is lack of reimbursement for care provided to persons without insurance.

The reason hospitals have had to "act like airlines" is that they're losing money. Medicare reimbursement is too low to cover costs, and private health insurance reimbursement is even lower. In some markets, dominated by one or two insurance carriers, the hospitals have no power to negotiate higher reimbursements. It's either take what the insurance companies offer, or see the patients go elsewhere -- often to the competing hospital across town. It's no coincidence that the report's authors were all hospital based physicians or hospital administrators.

To be sure, hospital costs can be expensive -- anywhere from a few thousand dollars for a simple pneumonia to hundreds of thousands of dollars for a trauma victim. One bad auto accident can easily bankrupt an uninsured family, even if only one member is injured. And it only takes one or two young, uninsured trauma victims to make a hospital see red. With dwindling insurance reimbursement, they no longer have the margins to absorb those unpaid bills.

But will requiring a system of universal health insurance coverage really solve the hospitals' problems? It depends on the system and the definition of "universal coverage." If by "universal coverage" they mean insurance against catastrophic events, then perhaps it could. If, however, they mean insurance that will cover every conceivable healthcare need -- from office visits for a cold to the latest cholesterol lowering medication, then it's likely to get them -- and us -- nowhere. For such a system would be prohibitively expensive, and if we've learned one lesson in the past ten years, it's that when insurance costs are too high, the first thing that gets cut is not benefits, but reimbursement.

The Institute of Medicine and its committee members should be careful what they wish for. They just might get it -- a healthcare system every bit as barren as Mars.

Sydney Smith is a family physician who has been in private practice since 1991. She is board certified by the American Board of Family Practice, and is a Fellow of the American Academy of Family Practice. She is the publisher of MedPundit.


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