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Changes in Health Care Expenditure Associated with Gaining or Losing Health Insurance

Lisa Ward, MD, MScPH, MS; and Peter Franks, MD
[+] Article, Author, and Disclosure Information

From the University of California, San Francisco, San Francisco, California, and University of California, Davis, Sacramento, California.

Acknowledgments: The authors thank Patrick Romano, MD, MPH, for insightful comments on this manuscript. They also thank the Center for Health Services Research in Primary Care, specifically, members of the Primary Care Outcomes Research Seminar at University of California, Davis, for constructive feedback on this project.

Potential Financial Conflicts of Interest: None disclosed.

Requests for Single Reprints: Lisa Ward, MD, MScPH, MS, Department of Family and Community Medicine, University of California, San Francisco, 1001 Potrero Avenue, Ward 83, San Francisco, CA 94110; e-mail, lward@fcm.ucsf.edu.

Current Author Addresses: Dr. Ward: Department of Family and Community Medicine, University of California, San Francisco, 1001 Potrero Avenue, Ward 83, San Francisco, CA 94110.

Dr. Franks: Center for Health Services Research in Primary Care, Department of Family and Community Medicine, University of California, Davis, 4860 Y Street, Suite 2300, Sacramento, CA 95817.

Author Contributions: Conception and design: P. Franks.

Analysis and interpretation of the data: L. Ward, P. Franks.

Drafting of the article: L. Ward, P. Franks.

Critical revision of the article for important intellectual content: L. Ward, P. Franks.

Final approval of the article: L. Ward, P. Franks.

Statistical expertise: L. Ward, P. Franks.

Ann Intern Med. 2007;146(11):768-774. doi:10.7326/0003-4819-146-11-200706050-00005
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Table 1 shows the relationship between insurance categories and other measured characteristics. In general, the characteristics of persons who had interrupted insurance are intermediate between those of persons who had continuous private insurance and those who were continuously uninsured. Characteristics of persons who had continuous public insurance reflect a greater social disadvantage than those of the other groups. For variables that are more susceptible to the effects of insurance (such as the probability of any expenditures or total health care expenditures), values for persons who had interrupted insurance are closer to those of persons who were continuously insured or those who were continuously uninsured, depending on their insurance status that year. The patterns were consistent for second-year characteristics (data not shown).

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Adjusted expenditures (95% CIs) of each insurance group.
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Do the Poor Cost More?
Posted on June 13, 2007
Robert H. Jackson
Conflict of Interest: None Declared

June 13, 2007

The Editor Annals of Internal Medicine 190 N. Independence Mall West Philadelphia, PA 19106-1572 USA

Dear Editor,

The article 1 and editorial 2 in the Annals about health care expeditures for insured vs uninsured patients leave open another important question that was the title of a 1991 editorial in The New England Journal of Medicine, namely, "Do the Poor Cost More?" 3 This editiorial offers the thought that poor unisured patients may cost more in the long run to care for because they present in crisis phases of illness that require expensive care, while had they been insured, they might have had less expensive routine care that prevented the crisis.

For example, in my area, people who lose their insurance usually switch providers and come to a large university medical center that has a publicity supported mandate to provide them with "free" or "charity" care. They often cannot buy routine medicines and do not wish to wait in long lines for routine care, so routine visits for hypertension or diabetes are often forgotten. Later thay present to our emergency room with a hpyertensive stroke or diabetic osteomyelitis. Bills for such care are often not generated and when they are, remain internl, with neither patient nor physician receiving copies. It is not clear to me that the Medical Expenditure Panel Survey would capture such expenditures. If indeed the poor do cost more, it would provide additonal weight to the arguments in favor of universal coverage.

On the other hand, many uninsured patients who forgo care may simply die suddenly from acture vascular events and thus generate no medical expenditures. Therefore, as a group, they may cost less than insured patients. This seems to be a thought that many analysts dance around, but rarely confornt directly. Sudden death is clearly not a desirable outcome (except, perhaps, in the very old) from a personal or public health standpoint, but may be highly desirable from a purely economic standpoint.

I would be greatly interested in the author's response to these thoughts, particularly to the question of whether or not the poor cost more in our current system. And if so, does provision of easy access to routine and preventive care reduce overall cost?


Robert H. Jackson, M.D.

Clerkship Director-Internal Medicine

Associte Professor

Department of Medicine

Section of General Internal Medicine


1. Ward L. and Franks P. Changes in Health Care Expenditure Associated with Gaining of Losing Health Insurance Ann Inter Med. 2007;146;768

2. DiMassa G. and Escarce H. Insurance and Health Care Expediture: What's the Real Question Ann Inter Med. 2007;146;814

3. Do the Poor Cost More? NEJM 1991;324;63-4

*Physical Address*

Robert H. Jackson, M.D. 1501 Kings Highway P.O. 33932 Shreveport, LA 71130-3932 Department of Medicine

318-675-5621 (Phone) 318-675-8150 (Fax)

Cost of Health Inurance and Universal Health Care
Posted on July 24, 2007
Mustafa Younis
Florida International University
Conflict of Interest: None Declared

The United States of America is one of very few industrialized countries that have healthcare insurance linked to employment. Since individuals know about their health more than the insurance firms. The most obvious reason for this system is for insurer to insure mainly the health population who are able to work .The debate regarding health care as a right or privilege has not been substantially settled. Public health should be treated as a right and health care business should be treated as a regulated monopoly or it is a privilege?

Affordable health care for all Americans has been an issue since Truman administration . However, within the global market, health care has become a burden on American business. Furthermore it has become more burdensome for American families. The main reason for bankruptcy in America is the inability to pay for medical expenses. In 2006 more women filed for bankruptcy than enrolled in colleges and universities. Most of these bankruptcies were for the inability to pay for health care. Many leaders in the health care industry keep telling us that American do not need a health care system run or controlled by the government. Whether it is run by the government or private enterprise, people want an affordable health care.

One part of the solution to reduce the escalating cost of health care is to create one health insurance or a quasigovernmental health insurance agency. The proposed corporation would negotiate drug prices, payments for hospitals and physicians and provide malpractice insurance to health care providers. As a natural monopoly, such insurance agency would have lower costs due to economy of scale. With a single insurer, reimbursement and billing would be standardized which in turn would reduce the cost of services provided by hospitals, physicians and other health care providers. This would result in an economically efficient health-system, providing access to care through equitable financing, efficient supply of services, and financial sustainability.

The other side of the solution is to cease (stop) linking the healthcare insurance to employment. In this case, it would be costly to for insurance firms to link health insurance to healthy people (employee) . Health insurance would more expensive and unaffordable. A few percentage of the population would carry health insurance. In long run, market forces will curtail demand for health care and regular doctor visits. At the Equilibrium, the cost of health care will decline. The society and public policy maker might choose not to intervene, or choose the equilibrium as a point of entry of universal healthcare with a private single payer system as a natural monopoly.

Conflict of Interest:

None declared

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