Session: Effects of Uninsurance
Room: Hollister 110
Time: Tue 08:30-10:00

Presenter: Stacey McMorrow (Urban Institute. Health Policy Center )

Discussant: David MushinskiColorado State University

Abstract

Research on the uninsured has generally focused on the correlates and likely causes of uninsurance as well as on the effects of being uninsured on health care access, utilization and expenditures of the uninsured. At the individual-level, the conclusions are clear. Uninsurance results in limited access to care which can result in poor outcomes as well as costly financial consequences for the affected individuals. At the market-level, however the impact of a large uninsured population is less obvious. In a multi-payer system, the entire distribution of insurance coverage will be important in determining the equilibrium levels of access, cost and quality for all individuals. A variety of potential spillover effects from the uninsured are therefore possible and have been largely neglected in studies on the consequences of uninsurance. One way in which a high uninsurance rate may affect the market as a whole is through an impact on the availability of hospital services. Because uninsured individuals have lower demand for health care services, it is hypothesized that areas with more uninsured will not have sufficient demand to support certain services with a high fixed cost component. This study investigates the impact of the local uninsurance rate on the availability of hospital services.

Local uninsurance rates are measured at the MSA-level using two years of pooled CPS data. The sample is limited to the 100 MSAs with the largest CPS sample sizes. All community hospitals in the sample markets are identified on the AHA annual survey and a subset of 25 services are labeled as profitable or unprofitable based on work by Horwitz. Additional data on hospital and market characteristics are obtained from the AHA survey and the Area Resource File (ARF). The sum of all services, as well as profitable and unprofitable services, are calculated at the hospital-level and then transformed into categorical variables. For example, each hospital falls into one of 6 groups depending on the number of profitable services it provides (0, 1-3, 4-6, 7-9, 10-12, 13-15) and similarly for all services and unprofitable services. Market-level provision of individual services is also calculated by summing the number of hospitals providing a particular service and adjusting for population size.

Ordered logit estimates on the hospital-level service provision categories reveal some interesting results. Higher uninsurance rates are associated with provision of fewer total services by hospitals in the sample markets after controlling for other hospital and market characteristics. This effect is driven by the provision of fewer unprofitable services in markets with more uninsured. There is no significant effect of the uninsurance rate on the number of profitable services provided. At the market-level, the local uninsurance rate is associated with lower per capita provision of obstetric, psychiatric, AIDS and CT services. Four additional services showed no significant effects. These preliminary results suggest that providers are responding to the insurance distribution in setting the number and types of services they offer. The ultimate impact on the care delivered to various payers will be pursued in another study.

Key Terms

uninsured, access, hospital services, spillovers

Authors:

Stacey McMorrow (The Urban Institute. Health Policy Center)