Radiologists brace for fallout from crisis of uninsured

September 1, 2005
Howard Forman, MD

A problem of enormous proportions in the U.S. has grown even larger during the past two years. The ranks of the uninsured have increased every year, recently passing the 20% threshold, representing 45 million nonelderly persons. Even though no dramatic annual changes have occurred, the trend is not favorable (Figure 1). The problem has persisted and steadily worsened despite expansions of Medicaid and the introduction of the State Children's Health Insurance Program (SCHIP) in the late 1990s and early 2000s.

A problem of enormous proportions in the U.S. has grown even larger during the past two years. The ranks of the uninsured have increased every year, recently passing the 20% threshold, representing 45 million nonelderly persons. Even though no dramatic annual changes have occurred, the trend is not favorable (Figure 1). The problem has persisted and steadily worsened despite expansions of Medicaid and the introduction of the State Children's Health Insurance Program (SCHIP) in the late 1990s and early 2000s.

Employment-based coverage, still the dominant means of delivering health insurance in this country, is declining as a percent of the total. This course is likely to continue and will have an impact on radiologists. Possible changes in the future may also affect our specialty.

Although imaging costs are increasingly a driver of the upward trajectory in healthcare spending, there is no indication that consumers are reining in their healthcare spending. The consumer-driven healthcare revolution has not slowed spending in any meaningful way. We might ask whether healthcare costs are different from entertainment costs (have you read any complaints about the absurd escalation in spending on iPods?) or apparel costs (fashion expenditures have also exceeded the cost growth in general inflation). Yet frequent news reports imply that we spend too much on healthcare in this country. How is healthcare different, and why should we care?

Every participant in this industry blames others. The pharmaceutical industry would have us believe that their therapies are the most cost-effective; hospitals explain that their increasing costs derive from an aging and sicker population. Employers and consumers blame managed-care companies, and managed-care organizations blame everyone else.

As imagers, we are certain that our technology is being used in an ethical and logical manner. We often divert blame to referring clinicians and patients who demand our services independently of evidence-based need. Focusing on blame is not, however, a productive activity. We live in a country where capitalism and individual determination allow people to purchase as much of a good or service as they can afford, expressing their personal preferences through their spending. The problem is that we, collectively, are rarely spending our own money.

This is troubling because healthcare is primarily provided through an insurance product. I would suggest that this insurance is generally much more than it seems. When people buy an insurance product (or, more likely, have it bought for them), they are receiving at least four important services:

- true insurance, meaning that unexpected costs for serious illnesses will be covered, at least in part, and financial disaster will not follow a healthcare event;

- a prepaid health benefit, assuring that some or all costs for predictable health expenses will be covered, such as preventive health services, screening examinations, and routine office visits and tests;

- negotiated rates, assuring that they will have lower rates than the average person would be charged, even if the insurance company does not pay the full rate; and

- a "guarantee" that they can continue to receive this coverage in the future, even if their risk profile changes dramatically. This guarantee is less real than apparent, but no less important.

When consumers begin to absorb what this product really offers, they begin to understand why it is valuable and why so many people want it. They also understand why a lack of insurance may be a considerable obstacle to living life well. Having no health insurance not only makes one more responsible for costs than those who are insured, but the uninsured are less likely to be provided health maintenance and preventive care, are less likely to see a preferred provider, and are more likely to be bankrupted by a healthcare problem.

Some people argue that a lack of health insurance is a matter of choice. Everyone who is uninsured must be uninsured by choice, because social programs cover the poor and elderly, employers provide insurance for workers, and individuals can buy policies on the Internet, among other venues.

The fact is that most of the uninsured either cannot afford health insurance and are ineligible for Medicaid or cannot obtain health insurance because of preexisting conditions. As employers struggle to control costs, health insurance is susceptible to reduction, either by removing or reducing coverage or by demanding greater cost-sharing from employees.

Employers do face a genuine struggle. Health benefit costs are rising at rates far beyond the cost of wages, making each employer more likely to reduce coverage or lose out to global competitors that do not share this burden. The basic Employee Cost Index Chart (Figure 2) illustrates the problem. Note the dramatically widening disparity between wages and benefits over the last several years. An optimist (I will include myself) would suggest that we may have turned the corner in the last three quarters, but there is still a great distance to go. The current disparity remains the greatest in the history of the index.

No matter where one stands on the political spectrum, these issues affect practicing radiologists. Every uninsured patient who receives our services is potentially a complete or partial "write-off." Greater amounts of precertification and documentation are required for insured patients in order to receive full payment. As our contribution to healthcare costs becomes even more obvious, more aggressive efforts will be launched to hold down our costs, through more purposeful deployment of current practices or other means.

We might face substantial cost-sharing as a method to curtail our services. What impact will it have if our insured patients are forced to make a substantial out-of-pocket payment for their MRI or CT examinations? Will patients wait longer for their study, perhaps no longer needing it as their condition improves? Or is there a real risk that the delay will lead to worse health outcomes?

FINDING SOLUTIONS

It is questionable whether sufficient political momentum exists to fix the linked problems of healthcare costs and the uninsured. Until recent meetings of the U.S. Chamber of Commerce, I was not optimistic. But reports on the involvement of small and large businesses in tackling this issue are encouraging. The solution will likely be a political compromise. I can make a few predictions:

- The solution will not insure 100% of the population, but it can reasonably be expected to cover at least 90%.

- The solution will keep employers very involved in the process of providing this benefit.

- The tax deductibility of healthcare costs will be somewhat curtailed, but employers may actually receive more federal help in paying for benefit costs.

- Medicaid, Medicare, and SCHIP will remain major parts of the solution for those who do not receive an employer benefit.

- The private sector will still be expected to hold down costs.

These prognostications are based on the fact that the federal budget, the long-running underfinancing of Medicare and Social Security, and the need to "fix" the alternative minimum tax all limit the federal government's ability to increase funding for healthcare. We are, therefore, forced to confront the private sector and our employer-based system. I believe, however, that certain tax reforms could control the costs for the federal government while increasing incentives for smaller businesses to provide health insurance.

Radiologists would be prudent to follow several recommendations to prepare for changes:

- Dedicate resources to evidence-based radiology. We have a great opportunity to prove value in our services and to promote those services that truly provide benefit to our patients.

- Prepare our future leadership for more active roles in setting health policy. The physician ranks of private-sector, public-sector, and nonprofit organizations are filled with internists and pediatricians, who ultimately will make and implement major policy changes.

- Pursue best practices that improve our efficiency. Examples abound to suggest that our practices can provide better service at lower costs. Becoming lean and efficient will prepare a practice for harsher times and will also prevent encroachment by other specialists.

I am highly confident in the future of our specialty. We provide some of the greatest services in medicine, and those services play a major role in ensuring the quality of healthcare through screening, diagnosis, staging, and therapy. Each of us can make a more substantial contribution to maintaining this role.

Dr. Forman is an associate professor of diagnostic radiology and management, and director of the MD/MBA program and the MBA for executives program (Leadership in Healthcare) at Yale University.