The California Health Care Almanac recently released its annual report on the uninsured in the state. The report has been released annually for over 20 years and over that period the percentage of Californian’s, who are not eligible for Medi-care, and are not covered by an employer’s healthcare insurance has risen by 9%. The rate of uninsured Californian’s has risen only 6 tenth of one percent in the past 8 years, from 20% in 2000 to 20.6% in 2008 (The latest year that statistics are available). California has a higher percentage of uninsured residents than the National average and the largest actual number of uninsured individuals—6.6 million.
The general trend of the healthcare insurance picture in California is that both the number and percentage of residents that are uninsured is increasing at a rate that is slightly greater than the rate of the uninsured in the nation as a whole. While California has the largest number of uninsured individuals of any state, it ranks 8th for the number of uninsured when stated as percentage of population with a rate of 20.5%. The national average for the uninsured is 17.5%, and Texas has the highest percentage of uninsured residents at 27.6%
The trend for who provides the healthcare insurance coverage is changing from privately provided coverage to publicly provided coverage. Employer provided healthcare insurance has declined by 5.2% over the past 8 years, while individually purchased healthcare insurance has increased only 1.1%, leaving the public to provide healthcare insurance to increase by 3.6%. The number of people eligible for public healthcare insurance is increasing faster than the number of individuals receiving public healthcare insurance.
An interesting statistic is the one concerning the changes in the types of insurance coverage in different income brackets. The insurance coverage source (private, public, or uninsured) stays essentially the same in the lowest (under $25,000/year) and the highest (over $75,000/year) income brackets. The trend in the two middle ($25,000 – $75,000) income brackets is moving from private sources to public sources and uninsured. The percentage of the two middle income groups who rely on public sources for their healthcare insurance has essentially doubled from 1994 to 2008
The highest number of uninsured residents is among the self-employed and those working for employers with less than 25 employees. It is curious to note that among residents employed by the public sector, the uninsured rate is 8.3%, higher than the national average for public employees.
As is to be expected, the rate of uninsured individuals is highest in the younger age groups when children are no longer covered by their parent’s healthcare insurance plan. Younger individuals tend to have lower family incomes and the lower income brackets also have higher uninsured rates than higher income brackets
The percentage of uninsured individuals differs along racial/ethnic lines as well. The only ethnic group that has a larger percentage of uninsured individuals than the state average is the Latino group at 29.9%. The report also lists the uninsured rate of non-citizens in California at 48.3%.
Analysis of the Data
While the report is titled ‘California’s Uninsured’, it spends a significant amount of time tracking the trends on who provides the source healthcare insurance. Whether the individual is covered by employer provided healthcare insurance, privately purchased healthcare insurance, or publicly funded healthcare insurance, the aggregate will be the total of insured residents. If you do not have healthcare insurance it doesn’t really matter to you who provides the healthcare insurance for those who have it.
One statistic that clearly demonstrates a major flaw in the entire healthcare insurance system is the number of individually purchased healthcare plans. Only 7.7% of residents purchase their own healthcare insurance. This means that very few California’s are taking responsibility for their own healthcare.
The fact that California’s uninsured rate is slightly higher than the national average can be explained for two reasons:
1) California’s population is younger than the national average, and many young people make the sound financial decision to forego healthcare insurance.
2) California has a high rate of non-residents, and non-residents have a very high rate of uninsured for healthcare. Latinos account for 58% of California’s uninsured population.
The complete study can be found in the California Health Care Almanac: California’s Uninsured, December 2009
Over the past decade many governmental entities and private organizations have tried to quantify the quality of healthcare in America. The bottom line is that there is wide variance in the quality and cost of healthcare through the United States. It is hoped that by tracking the results of the various studies that are being conducted around the country, that the quality of healthcare can be improved while the increase in the cost of care can be restrained.
The California Healthcare Foundation has sponsored a comparative study which compares the quality of California Healthcare to that in the rest of the Nation. If the state of California were in school it would receive a ‘C’ for the performance of its healthcare system, compared to the rest of the nation.
California outperforms the National average in:
- Maternity and child healthcare
- Hospital care of patients with heart problems and pneumonia
- Cancer rates and cancer mortality rates
California underperforms the National average in:
- Care for geriatric patients
- Nursing home quality of care
- Diabetes diagnosis and treatment
California has about average care in:
- Hospital re-admission rates
- Improvement in hospital treatment of Pneumonia and Heart disease
- Home healthcare providers
In the years covered by the study (2001 – 2005), the average annual increase in healthcare costs was 6.5 %, while the increase in quality of healthcare grew only 1.4%. This suggests that there is room for improvement in the cost effectiveness of healthcare throughout the Nation.
The most interesting result of the study is that California outperforms the National average in the care of the younger portion of the population. California scored high in care of expectant mothers, infants, and children. California performed well on measures related to pre-natal care, low birth weight, and low infant mortality rates. California ranked high in birth-related traumas, immunization levels for children, and reduction in admission rates of certain pediatric conditions.
Treatment for cancer and heart related conditions are at the national level of care, or slightly above the national average. Measures of standard of care in surgical treatment in hospitals and outpatient care are inline with the national averages.
At the other end of the population age scale the State under performed in most categories of geriatric care. The number of seniors receiving vaccinations is below the national average. End of life care is measured as falling below the National standard of care, and the quality of nursing home care falls short of the national average.
It is important to note the California improved in its treatment of Pneumonia, cancer, and heart related cases faster than the national average. This may indicate that the standard of care in California is improving at a faster rate than the nation as a whole. However, there were still total of 1031 preventable adverse events in California hospitals in 2007. Since 2007 a total of 57 hospitals were fined $25,000 for each licensure violation.
ANALYSIS OF THE DATA
The data from this study would seem to indicate that the California healthcare system does a good job in treating the younger segment of the population. It does an average job in treating health conditions of the general population. But it does a poor job in the treatment of the older segment of the population. This may be because the population of California is younger than the average population throughout the rest of the nation. Perhaps more emphasis is placed on the younger patients, or California attracts better qualified doctors because of the younger population. In any case, the state of California may want to reallocate its healthcare resources to provide better healthcare for the geriatric portion of its population. This will become even more important as the population ages.
The complete study can be found in the California Health Care Almanac: Quality of Care facts and figures, August 2009
The current debate regarding health insurance and health care is really a discussion over two distinct issues. Health insurance is a risk management product sold by insurance companies, while health care involves medical services provided by hospitals and doctors. This distinction is very important when discussing the reforms proposed by lawmakers, and an examination of the issues surrounding each is important to reform.
Health Insurance
Health insurance is a product sold to those who cannot afford to pay for the service of doctors and hospitals out of their own pocket, and this includes most Americans. While there are various types of health insurance programs, they are all designed to accomplish one important task; to provide the funding necessary to pay for expensive medical treatments that the policyholder would otherwise not be able to afford. The economics of health insurance companies is based on a general insurance concept known as the “law of large numbers”. This means that many people together will pay money to an insurer. Some of them will need to use some of that money at some point, but not everyone will. The insurance company takes a chance that enough people will not need to use the coverage so that they will have enough money from premiums collected from everyone to pay for the medical bills of those who do need to use the insurance. In other words, everyone pools their money so that the sick and injured can get their bills paid. Insurance companies primarily make money from the investment income derived from the premiums. If there is money left over at the end of a year in premiums not used to pay claims, insurers will have what is called an underwriting profit. Insurance companies do not often realize an underwriting profit, especially during down economic times.
Insurance companies use people called actuaries to make a best guess as to what type of customer is more likely to need to use the insurance and health insurance rates are determined from this data. In some cases, those more likely to use the coverage are charged more, and sometimes the costs are spread around to everyone.
Health Care
The cost of medical care in the United States has risen at a rate higher than the growth rate of GDP since 1970, and the trend is expected to continue. There are many causes for this growth including technological advances in medicine, more frequent need for health care as baby-boomers age, and widespread fraud and waste. Many also argue that the high cost of malpractice lawsuits make medical care expensive.
When insurers pay more for health care, it follows that they will charge higher premiums to avoid an underwriting loss.
Reform
The current reform debate involves proposals that will change the way health insurance works, but may also change the way that health care is administered. This has become a very contentious issue as people consider the possibility that government administrators may have control over decisions that their doctors will make. It should be recognized that health insurance companies currently have a significant role in deciding what treatments are covered. With the current system of health insurance however, an appeal process exists that may not be available under a government run program.
Health care is simply too expensive, and that is why health insurance was developed. The problem now is that health insurance is also becoming too expensive for many Americans and that is why lawmakers are working hard on a reform bill to address this issue.
