1. Presented at Academy Health Annual Research Meeting, June 25-27, 2006, Seattle, WA Changing Clinical Characteristics of the Uninsured: Implications for Funding Care for the Uninsured Kenneth E. Thorpe, Ph.D. Robert W. Woodruff Professor and Chair Department of Health Policy and Management Rollins School of Public Health Emory University kthorpe@sph.emory.edu

2. Presented at Academy Health Annual Research Meeting, June 25-27, 2006, Seattle, WA Overview Most prevalent medical conditions among the uninsured have changed over time Largest increase in prevalence and spending associated with several chronic conditions Observed a large increase in chronic disease prevalence among part year uninsured. This change raises major clinical management issues. Care for many of these patient more effectively provided at better value with changes in the structure of the “safety net”. This would entail a focus on primary care, prevention, risk appraisals, and care coordination

3. Presented at Academy Health Annual Research Meeting, June 25-27, 2006, Seattle, WA Overview Means “safety net” needs to be horizontally integrated rather than “hospital-only” focused. This will require changes in how we pay for the uninsured since this episodic model of care is driven by Medicare and Medicaid DSH payment policies

4. Presented at Academy Health Annual Research Meeting, June 25-27, 2006, Seattle, WA Overview Current financing policy through Medicare and Medicaid DSH reinforce an inefficient, expensive model of caring for chronic care patients as it forces most care to be hospital based Need alternative financing approaches –Pay for prevention –Pay for full coverage clinically recommended care for the uninsured (medical home concept)

5. Presented at Academy Health Annual Research Meeting, June 25-27, 2006, Seattle, WA Storyline How have the clinical characteristics of uninsured and Medicaid adults changed over time? What implications does this have for the delivery and financing of care? Examine trends from 1987 through 2003

6. Presented at Academy Health Annual Research Meeting, June 25-27, 2006, Seattle, WA Ten Most Prevalent Medical Conditions, Full-Year Uninsured Adults Aged 18-64, 1987 and 2003 (% Adults with condition) Source: NMES and MEPS Conditions19872003 Trauma17.3%8.8% Pulmonary Conditions6.4% Mental Disorders 4.2%6.0% Hypertension6.4%5.8% Arthritis4.4%3.4% Diabetes2.1%2.8% Heart Disease3.1%1.8% Births2.9%1.5% Central Nervous2.5%1.9% Cancer1.4%1.1%

7. Presented at Academy Health Annual Research Meeting, June 25-27, 2006, Seattle, WA Most Prevalent Among Part-Year Uninsured Adults 18-64, 1987 and 2003 Source: NMES and MEPS CONDITIONS19872003 Pulmonary Disorders 8.6%9.3% Trauma21.6%11.7% Hypertension5.3%9.4% Mental Disorders4.7%10.8% Osteoarthritis4.0%2.7% Heart Disease4.7%3.2% Central Nervous3.7%4.0% Diabetes1.9%3.8%

8. Presented at Academy Health Annual Research Meeting, June 25-27, 2006, Seattle, WA Most Prevalent Conditions Among Non- institutionalized Medicaid Adults 18-64, 1987 and 2003 Source: NMES and MEPS 19872003 Mental Disorders 9.5%24.9% Pulmonary Conditions 13.3%20.0% Hypertension12.1%16.5% Trauma18.7%15.3% Births11.4%12.8% Osteoarthritis11.1%11.0% Diabetes6.0%10.3% Heart Disease9.0%8.7%

9. Presented at Academy Health Annual Research Meeting, June 25-27, 2006, Seattle, WA % Distribution of Spending, Top Medical Conditions, Full-year Uninsured Adults, 1987 and 2003, All Conditions 19872003 Prescription Drugs9.5%28.0% Inpatient Hospital56.7%28.8% ER4.1%9.2% OPP Visits13.8%8.4% Physicians14.2%25.5% Home Health1.4%0.1% Dental0.3%- TOTAL100%

10. Presented at Academy Health Annual Research Meeting, June 25-27, 2006, Seattle, WA Top Ten Most Expensive Medical Conditions, Adults 18-64, Medicaid and Full-Year Uninsured, 2003 (Billions of 2001 $) MedicaidFY Total Uninsured Trauma$9.3$2.6$11.9 Mental Disorders$9.1$1.8$10.9 Births$7.6$1.4$9.0 Pulmonary Disorders$4.3$1.7$6.0 Heart Disease$4.8$1.6$6.4 Diabetes$3.8$0.8$4.6 Cancer$3.3$0.7$4.0 Hypertension$3.1$0.9$4.0 Arthritis$3.2$0.8$4.0 Kidney Disease$3.0$0.3$3.3 Source: NMES and MPES

11. Presented at Academy Health Annual Research Meeting, June 25-27, 2006, Seattle, WA CONCLUSIONS Changes in clinical mix of uninsured adults leading to increase spending on prescription drugs, outpatient services and away from inpatient hospitalization (similar to private insurance trends) Current federal DSH policies for financing care for the uninsured has not changed – retained hospital focus. Though some flexibility available through waivers Need to re-think institutionalized based approach for financing and delivering care for uninsured Instead focus on patient-central not provider-based approach that provides funding across full-spectrum of medical care needs