Health insurance, the uninsured, and hospitals: collision course.

SUMMARY The number of uninsured Americans is approaching 50 million, with little evidence that the situation will improve any time soon. Although the consequences of this are serious in many ways, the implications for hospitals are especially severe, as they are the providers of care of last resort. Among the most serious problems for hospitals that treat uninsured patients are financial losses; difficulties in planning and in allocating resources; the need to make painful choices; litigation, both public and private; loss of community faith; the possible closing of needed institutions; and a perception of moral failure. The question is whether American hospitals have the will and the ability to stave off an impending disaster. IN THE HISTORY of every long-standing and intractable dilemma, there is a point when the impact of the problem appears to be great enough that a solution becomes not only desirable, but essential. This watershed moment has many names: Author Malcolm Gladwell (2000) calls it "the tipping point." Others refer to it as a "climactic moment." Still others borrow from the long-distance runner's lexicon and speak of "hitting the wall," the point at which one simply cannot go on anymore. However we might refer to it, this is the time when a problem balloons into a crisis, and an answer seems inevitable. This does not mean that a solution is always found, of course. The bloody feud between the Palestinians and Israel seems to go on and on. And on. The debate over global warming has been stalemated for so long that most of the earth's land mass may be covered with water before anyone does anything truly meaningful to solve the problem. The Boston Red Sox may have finally won the World Series, but the Chicago Cubs seem unlikely to win anything more than the nation's pity. And the discussion of Americans who lack health insurance-or, as is increasingly the case, lack insurance sufficient to meet their needs-has been going on for more than a century. President Theodore Roosevelt, who served from 1901 to 1909, considered lack of access to healthcare a major problem. (Perhaps not coincidentally, he was president the last time the Cubs won the Series.) Franklin Delano Roosevelt considered making universal coverage part of the New Deal, but discarded the idea for political reasons. Presidents Kennedy, Johnson, and Nixon all sought to address the issue; only Johnson accomplished something, in the form of Medicare and Medicaid. President Clinton, as everyone knows, produced a massive proposal that was soundly defeated by a Congress that at the time was controlled by members of his own party. And here we still are, discussing what might be done and which proposals would be feasible and who would have to do what to achieve success. Meanwhile, that smell of smoke in the air is not Rome burning; it is American hospitals. A DETERIORATING SITUATION To know where you are, historians say, you have to know where you have been. In the case of the deteriorating health insurance situation, some type of starting point is necessary. The most reliable one is 1978, when federal researchers issued a report that found-to their surprise-that 26 million Americans had no health insurance in 1977 (Kasper, Waiden, and Wilensky 1978). It has been, for the most part, a downhill trend since then (Figure 1). The number of uninsured Americans has climbed every year since the federal study, with the exception of the period from 1999 through 2001, when an improving economy and especially expansions of Medicaid and State Children's Health Insurance Program (SCHIP) enrollment created a temporary drop. That has been eclipsed in recent years by a return to significant increases (U.S. Census Bureau 2004).1 However, national figures do not tell the entire tale. Although every state has seen an increase over time, in some states the uninsured represent less than 15 percent of the population, whereas in others, one in four lacks coverage (Figure 2). …