As the number of working Americans without health insurance rises, hospitals are expected to absorb hundreds of millions of dollars in additional uncompensated care over the next decade, a new report indicates.
"This is a very significant problem for the healthcare system and puts extra financial pressure on hospitals at a time when they are fighting to survive," said Stuart Altman, chairman of the Council on the Economic Impact of Health Care Reform, which issued the report.
According to A Study of the Decline in Employment-based Health Insurance, 58% of employees had health insurance through their jobs in 1993, compared with 62% in 1988 (See chart).
The top two reasons for the reduction in employer-based insurance were the decline in real wages and the increased cost of health insurance. Other factors include an increasing number of service-based companies that do not offer health benefits to workers, the report said.
"The number of uninsured has risen (to 41.2 million in 1993), but that increase is lower than it would have been because Medicaid eligibility expanded in the mid-1980s and masked the impact," said David Shactman, council senior analyst.
Shactman said if Congress' proposed Medicaid cuts are made, millions more people could be left uninsured, flooding emergency departments and hospital units. Altman said as many as 50 million people could be uninsured by 2000.
"Public delivery systems must be in- creased, not cut back," said Altman, who also is chairman of the Prospective Payment Assessment Commission and a health economist at Brandeis University. "We can't expect the private sector to provide all the additional free care."
James Mongan, M.D., a council member and executive director of 542-bed Truman Medical Center, Kansas City, Mo., said managed care and reduced government payments have limited hospitals' ability to provide free care.
The group is expected to meet later this summer to discuss policy options that would address the decline in employer-based health insurance and the impact to providers, Altman said.
The Council on the Economic Impact of Health Care Reform is a 15-member research organization formed in 1993 to study the business effects of restructuring the healthcare system. It recently called on researchers from other organizations to examine the effects of healthcare mergers and consolidations on prices and expenses (March 20, p. 33).
Employer-based health insurance declines
Percent of workers covered by an employer-supplied plan 621 58
Percent of workers who chose not to use employer's plan 16.32 30.7
Percent of population covered by Medicaid 9 13
Percent of population without insurance 13 16.3
1 Based on 106 million total civilian workers aged 18 to 64 in 1988 and 112.5 million in 1993.
2 Based on 8 million workers in 1988 and 8.5 million in 1993. Workers chose no insurance because it was too expensive or they did not want or need it.
Source: U.S. Labor Department