1. Economic Case Copyright © 2003 Community Health Alliance. All rights reserved. Unless otherwise indicated, all materials in this document are copyrighted by the Greenville Community Health Alliance. Materials may be used and distributed, but must be cited. Economic Case Copyright © 2003 Community Health Alliance. All rights reserved. Unless otherwise indicated, all materials in this document are copyrighted by the Greenville Community Health Alliance. Materials may be used and distributed, but must be cited.

2. Economic Case VI - 2 Economic Impact Case Statement Given the complexity of the costs of uninsurance, it is difficult to attach “one” cost. We can, however, assign a series of costs Costs of uninsurance are economic and societal (e.g., hospital cost of indigent care vs. improved health from preventive care) Some costs are quantifiable, and some are not

3. Economic Case VI - 3 The impact of uninsurance has been documented nationally. “The discontinuity of coverage and complete lack of health insurance among tens of millions of Americans every year entail costs for our society in… Lost health and longevity, including health deficits leading to developmental and educational losses for children; Financial risk, uncertainty and anxiety within families with one or more uninsured members; Financial stresses for and instability of health care providers and institutions in communities with relatively high uninsured rates that reduce the scope and amount of available health services, including public health services; and Lost workforce productivity.” Source: Institute of Medicine, 2003. Hidden Costs, Value Lost: Uninsurance in America, Wachington, DC; National Academies Press, p. 1.

4. Economic Case VI - 4 And negatively affects each of us. The Uninsured Greenville Residents Governments Business Community Healthcare Providers Local State Federal Hospitals Physician Practice Other Providers Economic Impact of Uninsurance

5. Economic Case VI - 5 And in a variety of ways. The uninsured are the most directly impacted because of the lack of insurance with financial, health, and family problems. Local residents pay higher taxes, higher health insurance rates, and for a indigent based healthcare system Businesses and their employees suffer with higher health insurance premiums, higher costs, and losses in productivity and absenteeism Economic Impact of Uninsurance Healthcare providers, including hospitals, physician practices, clinics, and other medical offices, are direct funders of the uninsured through indigent care and direct patient care Governments, especially Federal and state, have direct responsibility for paying for care to the indigent and those in need through Medicaid and Medicare

6. Economic Case VI - 6 The Uninsured Greenville Residents Governments Business Community Healthcare Providers Economic Impact of Uninsurance Increased financial risks and burdens Inability to access care Health problems from delaying care Decreased longevity Disproportionate health care costs Increase in employee insurance costs Increase in insurance for employer Reduced employee coverage Lost productivity and absenteeism Higher insurance premiums Higher taxes to pay for care for uninsured Costs for charitable organizations who provide care Increase in health care costs Opportunity costs of Medicaid (If did not have, who would not be covered) Unreimbursed EMS charges Cost shifting to pay for care for the uninsured Uncompensated and indigent care costs Rising costs of providing care Financial pressures for physicians and hospitals Decreased access to private practitioners Potential inability to offer full range of services

7. Economic Case VI - 7 23 die prematurely Acutely ill uninsured children and adults receive fewer and less timely services, leading to increased morbidity and worse outcomes. 10,300 uninsured people with chronic illnesses receive fewer services and have increased morbidity and worse outcomes 52,000 uninsured adults and children are less likely to receive preventive and screening services. All of them are at risk for the health consequences shown above. 77,000 uninsured individuals and members of their families have less financial security and increased life stress due to lack of insurance. People living in communities with a higher than average uninsured rate are at risk for reduced availability of health care services and overtaxed public health resources. { The value of health capital forgone each year in Greenville due to uninsurance is estimated at between $84 and $167 million The Consequences of Uninsurance for Greenville “The economic value of the healthier and longer life that an uninsured child or adult forgoes because he or she lacks health insurance ranges between $1,645 and $3,280 for each additional year spent without coverage.” Source: Institute of Medicine, 2003. Hidden Costs, Value Lost: Uninsurance in America, Wachington, DC; National Academies Press, p. 3

8. Economic Case VI - 8 “Those who lack coverage have worse health outcomes than do similar individuals with insurance, because dollars alone do not confer the health benefits that continuous coverage does. If all members of society bear certain risks and costs from spillover effects of uninsurance, all should realize some benefit, at least indirectly, from a public policy ensuring that everyone has coverage.” Source: Institute of Medicine, 2003. Hidden Costs, Value Lost: Uninsurance in America, Wachington, DC; National Academies Press, p. 1

9. Economic Case VI - 9 “The majority of the costs due to being uninsured… are not health services costs (that is, uncompensated care or expensive hospitalizations because of delayed treatment) but rather result from the poorer health outcomes of uninsured individuals.” Source: Institute of Medicine, 2003. Hidden Costs, Value Lost: Uninsurance in America, Wachington, DC; National Academies Press, p. 2

10. Economic Case VI - 10 “The spillover costs of uninsurance experienced within communities result from both the poorer health of uninsured populations and the demands made on local public budgets and on providers to support care for those without coverage.” Source: Institute of Medicine, 2003. Hidden Costs, Value Lost: Uninsurance in America, Wachington, DC; National Academies Press, p. 2

11. Economic Case VI - 11 “The economic value of the healthier and longer life that an uninsured child or adult forgoes because he or she lacks health insurance ranges between $1,645 and $3,280 for each additional year spent without coverage.” Source: Institute of Medicine, 2003. Hidden Costs, Value Lost: Uninsurance in America, Wachington, DC; National Academies Press, p. 3

12. Economic Case VI - 12 Over $34 Billion in Care in the United States of the Uninsured is “Uncompensated care.” Source: BRFSS, 2001 Note: Includes payments for people uninsured all-year and for only part of the year. *Payments for part of the year when part-year uninsured have coverage Source: “How much Medical Care Do the Uninsured Use and Who Pays for It? The Urban Institute, February 12, 2003 U.S. Total = $98.0 Billion

13. Economic Case VI - 13 Of those uninsured all year, $25 billion is uncompensated care. Source: BRFSS, 2001 Source: “How much Medical Care Do the Uninsured Use and Who Pays for It? The Urban Institute, February 12, 2003 U.S. Total = $40.6 Billion

14. Economic Case VI - 14 Estimates of Per Capita Spending (U.S.) Full-year uninsured$1,253 Part-year uninsured$1,950 Full-year privately insured$2,484 Source: “How much Medical Care Do the Uninsured Use and Who Pays for It? The Urban Institute, February 12, 2003

15. Economic Case VI - 15 Greenville’s health care coverage is slightly better than the state and the country. Source: BRFSS, 2001

16. Economic Case VI - 16 Emergency Room Charges Source: SC State Budget and Control Board

17. Economic Case VI - 17

18. Economic Case VI - 18

19. Economic Case VI - 19 Inpatient Charges Source: SC State Budget and Control Board

20. Economic Case VI - 20 Self/Indigent Hospital Charges Source: SC State Budget and Control Board $75,535 $85,757 Charges increased 14% to about $230 per resident

21. Economic Case VI - 21 Framework for Community Effects of Uninsurance Source: “A Shared Destiny: Community Effects of Uninsurance” National Academy of Sciences, 2003

22. Economic Case VI - 22 Almost 80,000 Greenvillians are considered to be in the “Safety Net” The “Safety Net” are those who either received or were eligible to receive services from Medicaid, TANF, and Food Stamps. –In 1999, 21% of Greenville’s population fell into the Safety Net –Of children under age 14, 37% were eligible, and in non-white households with children under age 14, 77% were eligible –For non-whites age 65 and over, 48% were eligible and for whites age 65 and old, just 10% were eligible. Source: SC Office of Research and Statistics

23. Economic Case VI - 23 The financial impact of alcohol and drug abuse by young adults in Greenville is roughly $272 million. “Alcohol and drug abuse by young adults in South Carolina places a severe financial burden on society. The burden is felt in terms of higher prices for goods and services due to increased absenteeism and decreased productivity in the workplace; higher taxes to pay for additional police and jails to handle increasing drunk driving, drug trafficking, etc.; property losses from automobile accidents and thefts for drug money; and higher health care costs because abusers use the health care system more than non-abusers. Alcohol and drug abuse also burdens families with lost income, debt, child abuse and neglect, sexual abuse of women, and other domestic violence. A rough estimate of the annual financial impact of alcohol and drugs in South Carolina is $2.5 billion ; the financial impact in the county would be roughly $271.7 million.” Source: SC Young Adults Report

24. Economic Case VI - 24 The Economic Impact of Unintentional Injuries to Young Adults During 1998 to 2000, unintentional injuries to young adults in Greenville County constituted 25% of their emergency room visits and 4% of their hospitalizations. –$6,632,039 were spent annually on their hospital emergency room traumas resulting from unintentional injuries –$3,500,417 on hospitalization for unintentional injuries. Source: SC Young Adults Report

25. Economic Case VI - 25 “Americans devote more economic resources to health care than people in any other nation in the world, both in total dollars spent ($1,236 trillion for personal health care services in 2001) and as a percent of the gross domestic product (14%).” Source: Institute of Medicine, 2003. Hidden Costs, Value Lost: Uninsurance in America, Wachington, DC; National Academies Press, p. 2

26. Economic Case VI - 26 Heart disease has the highest cost of hospitalization in Greenville County Total Cost of Hospitalization, 2000 Source: DHEC, 2001

27. Economic Case VI - 27 Cost of a Low Birth Weight Baby Source: SC Young Adults Count, 2002 for costs and DHEC for rates Over the last five years, low birth weight babies have cost over $117 million dollars, compared to $62 million for normal birth weight babies.

28. Economic Case “The spillover costs of uninsurance experienced within communities result from both the poorer health of uninsured populations and the demands made on local public budgets and on providers to support care for those without coverage.” Hidden Costs, Value Lost National Institute of Medicine

29. Economic Case VI - 29 For households making between $20,000 and $30,000 a year, the equivalent of $15.00 an hour, there is no disposable income left after buying essentials, to pay for health insurance. Secondary Data Apparel 4% Among those making $20K to $30K a year, 14% of US households, $24,587 is spent each year on essentials, $93 more than their median income. *Estimated health insurance premium costs for a family of four, 35 year old head of household. Analysis tailored from an analysis by the Colorado Coalition for the Medically Underserved. Health Insurance 27%* $6,000 Healthcare 4% Food 12% Housing 39% Transportation 23% Education 12% $9,446$5,639$4,494

30. Economic Case VI - 30 “Half of all personal bankruptcies filed in 1999 involved a medical problem.” - Into the Red to Stay in the Pink” National Institute of Medicine, 2003

31. Economic Case VI - 31 Many small businesses cannot afford to offer insurance to their employees. Q3. Does your company currently offer health insurance coverage to its employees? Q2, How many employees does your company employ? Business Survey 44% of companies with 10 or less employees offer insurance. All companies surveyed with more than 25 employees offer health insurance to employees, while less than half of those with five or fewer employees offer insurance. Half of the companies in Greenville (47%) have 10 or less employees.

32. Economic Case VI - 32 Companies are taking relatively drastic measures to manage the costs of health care insurance. Companies are taking relatively drastic measures to manage the costs of health care insurance. Almost half of companies say they have switched companies in the last two years. No one says they dropped coverage completely. Q11. In the last two years, has your company changed any of the following items related to its health insurance benefits offered to employees? Base: Offer health insurance Business Survey While 88% would reduce coverage if costs increased 50%, only 4% say they would drop coverage for employees completely. Q12. How would your business change its insurance coverage if costs increase in the next two years?

33. Economic Case VI - 33 For every dollar spend on prenatal care, the community saves almost five dollars. Source: Michael C. Lu, et. Al, “Elimination of public funding of prenatal care of undocumented immigrants in California: A cost/benefit analysis” American Journal of Obstetric Gynecology, January 2000 A study was conducted analyzing the delivery records of 970 undocumented immigrants in California in 2000. Those with no prenatal care: Were four times more likely to be delivered of low birth weight infants Cost $2,341 more initially and $3,247 more when incremental long-term morbidity cost was added For every dollar cut from prenatal care an increase of $3.33 in postnatal care and $4.63 in incremental long-term cost is expected. $6,816 $11,183

34. Economic Case VI - 34 Economic Impact of Uninsurance The Uninsured Increased financial risks and burdens Inability to fully access care Increased health problems from delayed care Decreased longevity of individual Disproportionate health care costs Children’s lost developmental costs Business Community Increase in employee insurance costs Increase in insurance costs for employers Reduced and lost employee coverage Lost productivity and absenteeism Greenville Residents Higher insurance premiums Increased taxes to pay for care for the uninsured Costs for charitable organizations who provide care Increased health care costs Governments Opportunity costs of Medicaid (If did not have, who would not be covered) Unreimbursed EMS charges Cost shifting to pay for care for the uninsured (e.g., Education funding going to Medicaid) Healthcare Providers Uncompensated and indigent care costs Rising costs of providing care Increased financial pressures on physicians and hospitals Decreased access to private practitioners Potential inability to offer full range of services to patients Cost of uninsurance in Greenville goes beyond just the uninsured. After an extensive search for a model created by another area or agency that demonstrates hard dollar costs to the medically underserved, none was found. We could uncover no other model of economic costs…. So we created our own.

35. Economic Case VI - 35 One way of looking at the impact of rising health care costs is by looking at the influences on job and wages. Source: American Association of Health Plans, 2003. The model estimates the total impact of a per annum increase in health care costs on employers, families and employees, beyond inflation as projected by the Centers for Medicare and Medicaid Services. Greenville computed as 9.5% of South Carolina. Toll of Rising Health Care Costs in Greenville

36. Economic Case VI - 36 For example… Between 2000 and 2001, self-pay and indigent charges at Greenville County hospitals increased 14% to $85 million at $230 per resident. For every dollar invested in prenatal care, $9 is saved in future care costs of the individual. Substance abuse and associated costs cost Greenvillians over $500 million a year. In recent years, the EMS services of Greenville County has written off between $2 and $4 million in uncollectable debt due to expired accounts, residents with no insurance and transient, non-resident and deceased individuals. $214 million was paid in Medicaid expenditures for residents of Greenville County in 2002. Based on figures from the National Institute of Health, uninsurance costs uninsured Greenvillians between $67 million and $135 million a year.

37. Economic Case VI - 37 “Those who lack coverage have worse health outcomes than do similar individuals with insurance, because dollars alone do not confer the health benefits that continuous coverage does. If all members of society bear certain risks and costs from spillover effects of uninsurance, all should realize some benefit, at least indirectly, from a public policy ensuring that everyone has coverage.” –Hidden Costs, Value Lost National Institute of Medicine