The negative effects of uninsurance on individuals and families "spill over" into communities—affecting how local health care systems are financed and how those systems, and the providers that work in them, deliver care to communities. Certainly, the lack of insurance affects uninsured individuals and families with uninsured members. Less obvious but no less real are the ways uninsurance affects the institutions that provide care, the people who provide care in these institutions, and the much larger mass of insured people who receive care in these institutions and from these providers. As recently noted by the Institute of Medicine, "it is both mistaken and dangerous to assume that the prevalence of uninsurance in the United States harms only those who are uninsured."¹

Context

The institutions and providers that participate in the U.S. health care "system" are too fragmented – they are not sufficiently integrated – and their incentives are not aligned to meet the health care needs of the uninsured. As a result, the uninsured receive too little care, too late²; facts that, nevertheless, are contrary to the commonly held view that Americans without coverage get the care they need.³

• The uninsured and medically indigent (defined as those who are unable to pay for the care they need) disproportionately receive care from the "health care safety net." The "safety net," a term of convenience rather than the name of a set of tightly coordinated institutions, includes as core providers public hospitals, academic medical centers, community health centers and clinics, and local health departments.⁴
• In urban areas, insured and uninsured people are less likely than those in rural areas to receive care from the same providers. There are more institutions and specialists in urban areas and they are more tiered or stratified, with the result that low-income and uninsured patients tend to receive care in different settings and have different experiences than insured patients. In rural areas, by contrast, the insured and uninsured are more likely to see the same set of providers. Safety net providers are less organized in rural areas.⁵
• The cost of uncompensated care provided to the uninsured was an estimated $34 billion to $38 billion in 2001. The public sector financed up to 85 percent of these costs. In addition, doctors provided an estimated additional $5.1 billion in "charity" (i.e., free or reduced-cost) care.⁶
• Geographic variation in uninsured rates is substantial. Over the years 2001-2003, Minnesota had the lowest rate (9.1 percent) among the states and Texas had the highest (27.1 percent). At the state level, higher uninsured rates tend to be associated with higher levels of public spending for care.⁷

Access to Care

In America's cities, the higher the uninsured rate the more difficulty lower-income people (under 250 percent FPL) have getting needed and regular health care.⁸

Primary Care

• Physicians have a financial disincentive to locate in areas with high uninsured rates. This may lead to physician shortages, which can result in limited access to primary care, both for uninsured and insured community members.⁹
• The proportion of physicians who provide charity care (to the uninsured and insured) declined during the 1990s due to reduced revenue from public and private sources.¹⁰
• Community health centers and public clinics serve a key safety net function by providing ambulatory services to insured and uninsured community residents. Evidence suggests that serving a growing number of uninsured people reduces their ability to provide ambulatory care to all members of the community.¹¹
• According to the Institute of Medicine, "[r]educed access to primary care may increase demand for services in already overcrowded hospital emergency departments. In turn this may reduce access to care and the quality of care received, regardless of insurance status."¹²

Emergency and Trauma Care

• The Emergency Medical Treatment and Labor Act (EMTALA) is the only federal law that grants a limited right to universal care. As a condition of participating in the Medicare program, hospitals must screen and, if medically necessary, stabilize patients who present at an emergency department for treatment. Hospitals are not allowed to deny such care to uninsured patients, although they can bill them for services rendered regardless of their ability to pay.¹³ Hospitals do not receive funding to support the requirements of EMTALA.
• Emergency department overcrowding in urban and rural areas results from public policies (such as EMTALA) and market pressures that have contributed to reduced hospital margins.¹⁴ More directly, overcrowding is caused when hospitals respond to financial pressures by decreasing the number of staffed inpatient beds that can be used to admit patients from emergency departments.¹⁵
• Emergency department overcrowding has a negative affect on the quality of care received by all patients¹⁶, but since uninsured patients have fewer alternative sources of care, they are disproportionately adversely affected.¹⁷

Specialty Care

• In response to EMTALA, hospitals have imposed on-call requirements on their affiliated specialists—which has lead to local shortages of some specialty services.¹⁸
• Some hospitals have responded to increased cost pressures of serving more uninsured patients by strategically eliminating specialty services – such as trauma and burn units -- that may be used disproportionately by uninsured persons.¹⁹
• Recently, the federal government has revised several EMTALA rules and regulations with the intent of reducing emergency department (ED) burden. However, the impact of these changes on hospitals or on patients served in ED's is not yet known.

Hospital Services

• Urban hospitals located in areas with relatively high uninsurance rates "have fewer beds per capita (except for intensive care unit beds); offer fewer services for vulnerable populations, including psychiatric, alcohol and chemical dependence, and AIDS care; and are less likely to offer trauma and burn care."²⁰