The Cost Of Health Care

I felt my eyes narrow when I read the opening paragraph of this article in today's NY Times:

When uninsured adults with common chronic illnesses became eligible for Medicare, they saw doctors and were hospitalized more often and reported greater medical expenses than people who had had insurance. And their increased use of medical services continued at least until at least age 72, researchers are reporting today.

I feared that the article was going to promote the notion that universal health care was unrealistic because people would spend all their time and the government's money running to doctors for the least little nick or tic. It turns out that the study showed no such thing. What it pointed out is that people with chronic diseases such as diabetes did not seek regular health care while uninsured because of the expense, but they availed themselves of that health care one they had Medicare.

The effect that emerged — a surge in the use of health care by those who were previously uninsured — was concentrated in people with cardiovascular disease or diabetes. Those are conditions, the investigators noted, in which treatment can prevent serious consequences that can require extra doctor visits, hospitalizations and expense. In the study, 2,951 of the 5,158 participants had one of those conditions.

When such previously uninsured people became eligible for Medicare, they had 13 percent more doctor visits, 20 percent more hospitalizations, and reported 51 percent greater medical expenditures than those with the same diseases who had had insurance all along. ...

“It shows how unfair our system is,” said Louise Russell, a research professor at the Institute for Health at Rutgers University in New Brunswick, N.J. “These people were not getting care, and they were at least as in need of it as the people who were insured.” [Emphasis added]

Left untreated (as it was in many of the cases in the study), diabetes has some pretty nasty end effects, including renal failure, diabetic retinopathy, and diabetic neuropathy. Treating these effects would of course be more expensive than the cost of treating the diabetes all along. That would certainly explain the increased medical expenditures once Medicare provided insurance, which only seems logical.

The study also shows that it may be less expensive than expected to provide universal health insurance, Dr. Ayanian and his colleagues concluded. Medicare is bearing the brunt when uninsured people put off seeing doctors or seeking medical care until they turn 65.

“A lot of the prior research focused on the health benefits of extending insurance coverage,” Dr. Ayanian said. “Our study suggested that it may be cost effective.”

But, economists note, it has to cost more to insure everyone than it does to leave some people out.

“The quick interpretation is, ‘Well this saves money,’ but it’s a partial savings,” said Mark Pauly, a health economist at the Wharton School of the University of Pennsylvania. “You get some money back, but it’s still going to cost money.” [Emphasis added]

Well, duh. Of course it's going to cost money to provide universal health care. I don't think anyone seriously has proposed that it won't, but the point is that it would mean a healthier population, especially among those who don't have or can't get private health insurance, and this study has shown that it won't be expensive as once thought.