Uninsured and Underinsured Patients Issue in the US

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There are several issues concerning the uninsured and underinsured patient population in America. There are many areas of concern the congressional efforts to increase the availability of health insurance, the public image of the insurance industry illustrated by the movie “John Q”, the lack of good management tools, and creating health insurance coverage for all low income Americans.

Since the number of uninsured Americans has risen to 43 million from 37 million in the flourishing 1990s and could shoot up even more severely if the economy continues to decrease and health care premiums keep increasing (Insurance No Simple Fix, 2001). In order to fully understand the uninsured and underinsured problem that hospital administrators face the cause must be examined. The health outcomes of uninsured individuals are generally worse than those who are insured.

Uninsured persons are more likely to experience avoidable hospitalizations, diagnosed at later stages of disease, hospitalized on an emergency or urgent basis, and more seriously ill upon hospitalization (Simpson, 2002) Because the uninsured often lack an ongoing relationship with a health-care provider, they are less likely to receive preventive care and diagnostic tests (Kemper, 2002). Many corporations balance their budget through cost cuts and other moves, but have been slammed with an increasing load of uninsured patients, coupled with reduced payments from government and private insurance programs.

In 2000, 564,476 uninsured patients came through Health and Hospitals Corporations health care centers, a 30 percent increase from 1996. In the same period, Congress reduced Medicare reimbursements to hospitals, while Medicaid reimbursements to primary care clinics remained basically unchanged, and drug costs increased 16 percent between 1999 and 2001(Steinhauer, 2001). In addition, about 58 percent of health care costs were paid out-of-pocket for children who were uninsured throughout 1996 in the United States, according to a new report by the researchers at the Agency for Healthcare Research and Quality (AHRQ) and Harvard University.

In comparison, about 23 percent was paid out-of-pocket for children who were covered by private health insurance. The average total expenditures for all health care services for uninsured children were $369, while the average total expenditures for children covered by private insurance was $1,100. The report was published as an article in the inaugural issue of Ambulatory Pediatrics (. Simpson, 2001). According to William J.

Scanlon, the GAO’s director of health care issues, several recent congressional efforts have been aimed at increasing the availability of health insurance, including improving the availability of private health insurance for individuals changing jobs or with preexisting conditions, increasing the percentage of health insurance premiums that self-employed individuals can deduct from taxable income, and establishing the State Children’s Health Insurance Program (SCHIP), which enrolled more than 3 million children in 2000(Anonymous,2001).

The SCHIP program has almost eliminated the differences across communities in children’s eligibility for public or private health coverage. However, some communities continue to have very high rates of uninsured children, in large part because of lower participation rates in public programs and higher costs for employer-sponsored coverage. Participation in SCHIP may increase in high-uninsured communities as the new programs mature, although low participation rates in public programs prior to SCHIP suggest that enrollment barriers may still be greater in such communities (Anonymous, 2001).

As to future initiatives to increase coverage, Mr. Scanlon observed that, because most uninsured individuals either pay no taxes or are in the lowest marginal tax bracket, a refundable tax credit would provide a larger net reduction in premium costs for low-income uninsured individuals than would allow a deduction from taxable income. Tax credits also would be more effective if they were available when low-income persons purchase coverage, rather than in the next year when tax returns are filed (Anonymous, 2001). Mr.

Scanlon stated that most of the proposed tax credit amounts represent less than half of premiums for many individuals, which some analysts conclude is not large enough to induce coverage purchases. In addition, some proposed credits for small employers or those with many low-wage workers would be provided for a limited period of time, which could make affected employers hesitant to begin offering coverage or increasing their premium contribution if the continued availability of the credit is uncertain (Anonymous, 2001).

In expectation of the John Q movie release the health-insurance lobbying group bought full-page ads in Variety and the Hollywood Reporter. This is the first time the health insurers’ group has ever advertised in such showbiz publications. The ad reads, in part: “John Q. It’s not just a movie. It’s a crisis for 40 million people who can’t afford health care”(Martinez, 2002, p. B. 1). The ad goes on to blame Denzel Washington for failing to address the problem of the uninsured or like the fictional character John Q.

, the underinsured. The insurance industry got a glimpse of just how damaging “John Q. ” could become to their public image when Mr. Washington appeared on the Oprah Winfrey Show to promote the movie. “Imagine being told that your insurance will not cover the only treatment that could save your child’s life,” Ms. Winfrey tells her audience. “It happens in the movie `John Q. ‘ and it happens to real people every day in this country (p. B 1).

Another area of concern for management can be illustrated by the $50,000 study, which found that clinics often lack good management tools and have high turnover, making it difficult to improve business practices. Clinics have failed to adjust their assessment of what constitutes adequate care to meet the criteria of the programs paying the bills, the study found. A lack of emphasis on billing means that many clinics do not receive the reimbursements to which they are entitled. The county said it’d keep a tight rein on clinics that accept the money.

“It’s an extremely effective use of resources, because people will be held accountable for the manner in which they deliver services,” said Jeff Carswell, a vice president at Affiliated Sante Group, which loses about $50,000 a month on its five clinics in Maryland (Hedgpeth, Becker, 2002). Furthermore, Maryland has about 74,000 patients that are put in danger as outpatient clinics close or refuse to accept uninsured or underinsured clients. In Montgomery, four clinics closed after the county’s largest provider CPC Health Inc. went bankrupt last year. Eight more are struggling, three of which plan to shut down soon.

The problem is Medicaid rates the state pays providers to treat the poor are so low that even the best-run clinics will lose at least 15 cents on every dollar, a state study found (Hedgpeth, Becker, 2002). The state compounds the problem, providers complain, by paying late. The problem gets worse when the federal government is responsible for the bill: Medicare, the program that provides coverage to the elderly and those with disabling mental illnesses, reimburses only 50 percent of treatment costs. The state no longer picks up the difference for most patients.

In 1997, the state launched an ambitious plan to reduce Medicaid costs by moving to a managed care system and to use the savings to treat more uninsured people. But the state greatly underestimated demand, and the system was soon overwhelmed (Hedgpeth, Becker, 2002). In a new administration and Congress, any health insurance coverage initiative will focus on some, rather than all, Americans. The main reason people lack coverage is cost. Because of the lack affordability, most observers acknowledge that government-financed subsidies are needed to expand coverage (Feder, 2001).

But there is considerable disagreement about how these subsidies should be provided. It is argued that the priority in expanding coverage should go to the uninsured population that is least able to afford coverage and most likely to have difficulties getting appropriate and timely care. Despite flaws in existing public programs, which can and should be remedied, strengthening these programs establishes a foundation for truly effective health insurance coverage for all low-income Americans (Feder, 2001).

A public program expansion aimed at the low-income uninsured would extend protections that are now available to some low-income persons to all such persons. But enacting and implementing such an expansion requires decisions on exactly how to expand subsidies and how to make the new subsidies most effective. Programs such as, Medicaid and SCHIP are trying to replace the current eligibility standard, based on a variety of demographic or categorical requirements, with an eligibility standard based solely on income.

Because they have little if any discretionary income, people with incomes below a minimum eligibility standard should be provided with comprehensive benefits, without premiums or cost sharing. For persons above that minimum, it may be appropriate to provide less comprehensive benefits and require some premium and cost sharing (Feder, 2001). The facts indicate that even modest premiums discourage participation and even modest cost sharing prevents use of necessary care among poor and low-income persons.

At the same time, as incomes rise, people are more likely to gain job-based insurance, so subsidies provided to those at higher income levels may substitute for private insurance instead of inducing the purchase of new coverage by uninsured persons. The choice of an eligibility level is therefore largely a political one, governed by views on the appropriate balance between affordability and substitution as well as by the amount of tax dollars the nation is willing to spend (Feder, 2001). For many years, hospitals have been lenient when it came to collecting money from patients.

Faced with declining liquidity and bad debt levels that exceed operating margins, hospitals are targeting every revenue source including the small portion that comes from patients. New procedures to collect from patients would represent a significant cultural and operational shift for many hospitals. The ability to collect from patients will be even more important if patient self-pay becomes a proportionally larger source of revenue because of a projected increase in the uninsured rate and reductions in employer-sponsored coverage.

Moreover, hospitals have been presented with an opportunity to improve patient self-pay collections, according to a report completed by the Healthcare Financial Management Association on the growing importance of the patient revenue cycle and capturing patient information at the time of service, requiring early verification of insurance, instituting processes to reduce claims denials and offering a greater say in managed-care contract negotiations.

The self-pay accounts are 3% to 4% of healthcare expenditures, but it represents about 16% of outstanding accounts receivable, according to the HFMA (Jaklevic, 2002). In addition, hospitals are getting more serious about patient collections one example is the patient-friendly billing initiative, which was started by the AHA and the HFMA. The initiative was meant to correct the problem of confusing bills.

Under the banner of patient friendliness, hospitals and their technology vendors are reformatting bills to resemble credit card statements with easy-to-read typefaces, brief text, less jargon and simple instructions. But in addition to improving customer service, hospitals expect to see another important benefit to improved billing faster and more complete collections from patients, since bills that are easy to understand are more likely to be paid promptly.

As an subsidiary of that effort, hospitals are experimenting with online patient billing With less fanfare, some hospitals are adopting steps such as collecting insurance and credit card information before elective procedures, counseling patients on financial responsibilities, collecting co-payments more consistently at the time of service and billing patients before their insurance pays (Jaklevic, 2002). Across the nation, consumers who have no health insurance are placing down $39.

95 to $250 a month for cards that offer discounted rates on doctors’ visits and, in more sophisticated plans, reduced prices on hospital procedures. Marketed along with phone cards or at the work site, health-care savings cards are either dismissed as the equivalent of coupons or viewed as the answer to the problem of America’s uninsured. Health-care savings providers tell of patients who realized tremendous savings. New health-care savings card companies are popping up around the United States, trying to be part of what industry insiders say is a billion-dollar business annually.

One entrant in the market, Texas-based Care Entree, tripled its revenue and number of members over the last three years and has been profitable three out of five years, said Michael Collins, the company’s vice president of marketing (Goch, 2002). Reference Anonymous, (2001). GAO Submits Proposal to Reduce Number of Uninsured. Employee Benefit Plan Review. Retrieved from. http:// proquest. umi. com/pqbweb. Becker, J. & Hedgpeth, D. (2002). Montgomery Moves to Help Mentally Ill 1 Million Programmed Planned with State. The Washington Post. Retrieved from http:// proquest.

umi. com/pqbweb. Feder, J. , Levitt, L. , O’Brien, E. , Rowland, D. (2001). Covering the low income uninsured: The case for expanding public programs. Health Affairs. Retrieved from http:// proquest. umi. com/pqbweb Goch, L. (2002). A New Card Deal. Best Review. Retrieved from: http:// proquest. umi. com/pqbweb Jaklevic, M. C. (2002). No Room for Patients. Modern Healthcare. Retrieved from http:// proquest. umi. com/pqbweb Insurance No simple Fix Congress Best Option may be Hybrid Plan that Mixes Tax Credits with Federal or State Expansions.

(2001). The Los Angeles Times. Retrieved from http:// proquest. umi. com/pqbweb Kemper, V. (2002). The Nation: Those without insurance die prematurely; health study concludes that the uninsured are treated differently from those with medical coverage with deadly consequences. The Los Angeles Time. Retrieved from http:// proquest. umi. com/pqbweb. Martinez, B. , (2002). Health Insurers try Ounce of Prevention Against John Q Film Paints HMOs’ as Stingy So Industry Creates ads Pointing Fingers at others.

Wall Street Journal . Retrieved from http:// proquest. umi. com/pqbweb. Simpson, R. (2001). Nearly 60 percent of Child Health Care Costs for Uninsured Children Is Paid out of Pocket. Press Release, January 25. Agency for Healthcare Research and Quality. Rockville, MD. Retrieved from http://www. ahrq. gov/news/press/pr2001/ambpedpr. htm Steinhauer, J. (2001). City Hospitals Imposing Fees at Pharmacies. New York Times. Retrieved from http:// proquest. umi. com/pqbweb.

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