Universal health care coverage: Cheaper in the long run?

Thirteen years after then-First Lady Hillary Clinton's 1,000-page universal health-care plan met with derision, an increasing number of public policymakers are coming full circle, advocating mandatory enrollment for everyone and coverage regardless of age, income and pre-existing medical problems. Evidence of the apparent attitude adjustment is obvious in state legislatures, where proposed laws such as Massachusetts' Health Care Trust, which would establish a universal, single-payer health plan for all Massachusetts residents, are being debated. Legislators' willingness to embrace single-payer salvation reflects less a change of heart than a key realization: Statistics indicate universal health care is cheaper, in the long run, than the status quo. Arizona health policy experts gathered to discuss these issues at a "Faces of the Uninsured" conference recently in Phoenix.

A national health insurance plan backed by the taxpayer's dime is actually the best way to throttle back skyrocketing medical costs, according to some experts gathered in Phoenix, Arizona, recently for a "Faces of the Uninsured" conference. That's right: Thirteen years after then-First Lady Hillary Clinton's 1,000-page universal health-care plan met with derision, an increasing number of public policymakers are coming full circle, advocating mandatory enrollment for everyone and coverage regardless of age, income and pre-existing medical problems.

Evidence of the apparent attitude adjustment is obvious in state legislatures, where proposed laws such as Massachusetts' Health Care Trust, which would establish a universal, single-payer health plan for all Massachusetts residents, are being debated. Legislators' willingness to embrace single-payer salvation reflects less a change of heart than a key realization: Statistics indicate universal health care is cheaper, in the long run, than the status quo.

Lawmakers are listening to medical researchers like Mary Rimsza, whose data-gathering and number-crunching lays out a simple premise: People will be healthier and will cost society less if they are insured and have access to medical care. A pediatrician and research professor who also co-directs the Center for Health Information and Research in the W. P. Carey School of Business, Rimsza also is a pediatrics professor at the Mayo Graduate School of Medicine and University of Arizona College of Medicine.

Rimsza, along with center Director William G Johnson and Tricia Johnson, a faculty associate at the center, co-authored "The Effects of Access to Pediatric Care and Insurance Coverage on Emergency Department Utilization." The study, based on more than 30,000 Arizona children, found that uninsured kids who had a medical home and access to a private pediatrician's office were 93 percent less likely to show up in the emergency room for non-urgent care than kids who had not seen a pediatrician.

Climate favorable for reform

Like other experts who spoke at the Phoenix conference, Rimsza has noted the public's recent softening on the topic of national health-care reform. Back in 1993, "people didn't want the massive change that the Clinton plan would require," she noted. Today, though, with nearly 46 million Americans lacking health insurance — 8 million of them children — and the decreasing availability of affordable employer-backed coverage, even the business community is beginning to think that national health-care reform is needed.

"Right now, the major voices against it are insurance companies, who worry about the financial effects of reform on their bottom line," she said. Johnson and Rimsza's primary project, the enormous Arizona HealthQuery (AZHQ) database, is attracting much attention these days. Using "data-mining" techniques, they can use the health-care information on more than 6 million Arizonans to answer a multitude of research questions. The data is provided voluntarily from major health-care systems, AHCCCS and other health-care providers quarterly.

AZHQ data analysts merge the data, de-identify it and store it for future analysis. Using the data, they have been able to show that uninsured people rarely see a physician until their condition becomes severe, and then they rely on expensive ERs for care. Probably because they delayed seeking care and do not get preventive health services, they are more likely to require hospitalization as well, according to the AZHQ data.

"They wait until they're very sick to go, then crowd the ERs and take up hospital beds, when, if they'd been treated earlier, their problems could have been taken care of on an outpatient basis," Rimsza explained. Since 68 percent of uninsured people work full time and another 13 percent work part time, their reliance on the ER also results in work absences and decreased productivity.

The data has convinced her that our current employer-based health insurance system is failing and health insurance reform at the state and national level is needed. "We need a comprehensive plan here similar to the one in Massachusetts. Here in Arizona, where 19 percent of people are uninsured, we have lots of stopgap solutions, but the problem is too big to depend on a safety net for the uninsured that relies on volunteer physicians and free clinics."

A cap on coverage?

But to function efficiently, there has to be consensus on what benefits should be available to everyone. "The 80-year-old man who wants a hip replacement to continue playing tennis may not be able to have that surgery unless he can pay for it himself," said Roger Hughes, executive director of St. Luke's Health Initiative (SLHI). Based in Phoenix, SLHI is a public foundation dedicated to policy development, education and advocacy and community issues and a major funder — along with ASU's Office of the Vice President of Research and others — of AZHQ.

Hughes says Americans need to start setting priorities by discussing the infamous "health-care rationing" concept that doomed earlier universal coverage efforts. "We need to decide on the basic floor of public benefits, then add on, or trade up, with private insurance" on top of that, Hughes argues. For instance, perhaps an ideal single-payer system would not pay for the 80-year-old's hip replacement for quality-of-life purposes, but he could still buy private insurance, something like today's "Medigap" policies, beyond the public plan's floor.

Universal coverage is the only way Hughes sees to avoid the disastrous expansion of "risk segmenting," in which insurance companies categorize covered lives based on medical problems. Shifting costs from low-overhead, healthier people to high-overhead individuals who are aged, disabled or have chronic diseases is inevitable regardless of the payer, though, he added.

"Cost shifting is going to occur no matter what. We just need to find ways to make insurance more affordable, and to do that, we've got to cover everyone, with mandatory coverage," he said. This includes "the 24-year-old who thinks she is invincible and doesn't need insurance."

Hughes points out, though, that payment and access reform only addresses some of the problems bedeviling the current health-care system, plagued as it is by massive administrative inefficiency, duplication/redundancy and a crippling reliance on expensive, hospital-based care. A new study of 4.7 million Medicare recipients by the Center for Evaluative Clinical Studies at Dartmouth Medical School indicates the current system wastes billion of dollars by caring for ailing elders during their last two years of life in hospitals rather than in community settings such as home care and hospices.

Arizona's citizenship restriction

At the same time some state legislators are leaning toward universal health care, at least one federal initiative is having the opposite effect in Arizona: As of July 1, 2006, all AHCCCS (Medicaid) members and applicants must provide "additional documentation of U.S. citizenship and identity to continue health insurance coverage." This applies to seniors and disabled people in the Arizona Long Term Care System as wells KidsCare.

The new law concerns Anne Winter, a health policy advisor for Gov. Janet Napolitano, who cited a recent study by Rimsza, Johnson and Richard Butler from Brigham Young University. They studied the impact of a proposal currently being considered in the Arizona Legislature which would end AHCCCS coverage for 14,000 adults, most of them defined as "the working poor." Using AZHQ data, they found that such a law would actually add a net $2.8 million to health-care costs due to increased emergency-department utilization and more hospital inpatient days.

In her remarks to conference participants, Winter said the health-care data gathered by Rimsza and her team was so compelling that she intended to use a new, $5,000 grant to funnel state medical data to the AZHQ project. "We are so lucky to have good data and top policy thinkers like Rimsza and Hughes," she added.

She also waved the flag for a pet project of Napolitano's - the Arizona CoppeRx Card, a free discount card for prescription drugs available to any Arizonan. Founded in 2004, the program has issued 54,000 cards to date, resulting in $15 million in discounts. CoppeRx Cards can be used at more than 500 Arizona pharmacies for discounts ranging from 15 to 55 percent, Winter explained.

She pointed to another state program, the Health Care Group, that provides affordable health insurance for small businesses with 2-50 employees and self-employed people who earn up to $40,000 annually. The insurance is community rated, available in HMO/PPO models and is administered by AHCCCS. Initially developed in 2004 as a remedy for workers whose employers decided against providing health coverage, Health Care Group has grown rapidly, with more than 114,000 current members, Winter said.

Last to speak was Kim Van Pelt, policy director at the Children's Action Alliance, who urged conference attendees to get behind "Covering Arizona Kids." It's a new campaign aimed at getting more of the state's roughly quarter-million uninsured children enrolled in health coverage through public service announcements, paycheck mailings, school and church newsletters and enrollment events at businesses and schools.

Van Pelt says Arizona ranks 45th out of 50 states in terms of providing health-care coverage to all children, leaving "the equivalent of 3,500 busloads of kids" without insurance. Surprisingly, almost half of the children without coverage are eligible for existing programs, but due to a lack of awareness, their parents don't sign them up, she said. There's also some confusion as to eligibility criteria; for instance, while children must be U.S. citizens to participate, their parents can be non-citizens.

The Phoenix conference was held at St Joseph's Hospital as part of "Cover the Uninsured Week," a nationwide campaign sponsored by the Robert Wood Johnson Foundation and other organizations ranging from the AFL-CIO to the American Hospital Association.

Arizona health-care snapshots:

• Arizona ranks 45th out of 50 states in terms of providing health-care coverage to all children. Almost half are eligible for existing programs, but due to a lack of awareness, their parents don't sign them up.
• A study titled "The Effects of Access to Pediatric Care and Insurance Coverage on Emergency Department Utilization," based on more than 30,000 Arizona children, found that uninsured kids who had a medical "home" and access to a private pediatrician's office were 93 percent less likely to show up in the emergency room for non-urgent care than kids who had not seen a pediatrician.
• The Health Care Group is a program that provides affordable health insurance for small businesses with 2-50 employees and self-employed people who earn up to $40,000 annually. The insurance is community rated, available in HMO/PPO models and is administered by the state.
• The Arizona CoppeRx Card, a free discount card for prescription drugs available to any Arizonan. Founded has issued 54,000 cards to date, resulting in $15 million in discounts.