Friday Interview: Risks Tied to Lack of Insurance Overstated | Eastern North Carolina Now

    Publisher's note: The authors of this post are the staff of the Carolina Journal, John Hood Publisher.

    RALEIGH     The Affordable Care Act, or Obamacare, focuses on increasing health insurance coverage among Americans. It's unclear whether that focus on health insurance leads to better health care access or quality. Dr. Chris Conover, research scholar at Duke University's Center for Health Policy and Inequalities Research, asked the question "How risky is it to be uninsured?" during a speech earlier this year to the John Locke Foundation's Shaftesbury Society. Conover also discussed themes from that speech with Mitch Kokai for Carolina Journal Radio. (Click here to find a station near you or to learn about the weekly CJ Radio podcast.)

    Kokai: Obamacare really does focus most of its attention on insurance, doesn't it?

    Conover: Right, it does. And I think that's part of what makes it a misguided policy, and this notion that we should be expanding insurance when, in fact, part of the problem with the U.S. health care system is we have too much third-party coverage.

    Kokai: So you step back from this and ask, as you did in this presentation, just how risky is it to be uninsured. And what you found might surprise some of our listeners.

    Conover: Right. So a lot of people think that there is an excess mortality risk associated with being uninsured. And the advocates of Obamacare claim that anywhere from 18,000 to 45,000 deaths a year can be attributed to there being 48 million uninsured.

    Well, it turns out, if you actually look at the scientific evidence, it's a much murkier picture. And the best study that I was able to encounter shows only a slightly elevated mortality risk, and in terms of statistical significance, it wasn't statistically significant, which meant that the researchers couldn't be 95 percent confident that — for all they could tell, being uninsured was no more risky than being privately insured.

    Kokai: And beyond just the thought of the excess mortality risk, you also looked at the riskiness in other ways as well, didn't you?

    Conover: Well, I did. I looked at financial risk. People who are uninsured ... they're 2 1/2 times more likely to undergo what's called a medical bankruptcy. That is, a bankruptcy related to medical bills. But it turns out they're also 2 1/2 times as likely to face a bankruptcy for nonmedical reasons as well. Which suggests that the uninsured just have characteristics — whether it's family income or just lifestyle choices — that are different than people with private health insurance coverage.

    Kokai: One of the key takeaways from your presentation seemed to be that the focus on insurance seems to be focusing on the wrong problem — if it's a problem at all.

    Conover: Right. So when I tried to quantify in dollar terms, what it would be worth to get rid of the various financial risks associated with being uninsured, the numbers came out much lower than the cost of a private health insurance policy under Obamacare. So we're spending many thousands of dollars to solve — to get rid of risks that are measured in maybe hundreds of dollars. And that's clearly sort of a misallocation of resources, in my view. The other thing I discovered is that, if our goal was to save lives, we could save eight times as many lives for the same amount of resources. So it's not getting very good bang for the buck.

    Kokai: And when you talked about saving lives, they were through programs like smoking cessation and things of that sort, rather than this big blanket insurance program.

    Conover: Right. If you look at the risk facing poor people, roughly similar numbers of people smoke as are uninsured among the poor. If you got rid of smoking among the poor, you would save eight times as many lives as if you gave all the poor health insurance coverage. So that's what I'm saying. And you could do it for 1/8 the cost, basically.

    Kokai: So after looking at just how risky it is to be uninsured and finding that [it's] maybe not as risky as some people might think, where does that lead you in terms of what we should do next?

    Conover: I think it raises a question of whether we should be aspiring to universal coverage. I mean, I personally think that it would be a good idea if everyone had coverage for high-dollar medical events. ... If you drive an automobile, you're required to have automobile coverage to cover yourself for that risk. And cover other people, so they aren't adversely affected because of something you do in your car. ... It's the front-end dollar where you can get into spending way too much money, right?

    In the RAND Health Insurance Experiment, people that had free care, 30 percent of the dollars on their medical care was wasted, according to the RAND scientists. Whereas in policies that had cost sharing — a modest deductible, maybe paying 20 percent of every dollar after that, up to an upper limit after which the policy pays everything — those kinds of policies have much, much smaller amounts of waste associated with them. The medical expenditures are, you know, tens of percentage points lower than for free care. So it's just a much more efficient way of sort of providing for health coverage.

    Kokai: It sounds like the health savings account concept, where you set aside the money and then you have the insurance for something that's catastrophic.

    Conover: Right.

    Kokai: And then everything else, you sort of pay yourself.

    Conover: Yes. You pay yourself, and because it's your health savings account, you own the dollars. Therefore, you have an incentive to be a good steward of those dollars. You're not spending another person's money. And therefore, you have all the incentives to shop aggressively for a decent price. You're going to ask harder questions of your medical provider: Do I really need this test? Is there a cheaper way of getting this? Is there a cheaper medication we can use? All of those incentives are largely absent in the health care system right now, because so much of our health care is paid for by a third party.

    Kokai: Do you have a sense that there is some interest in shifting away from the idea of just solving health problems by getting more people insured?

    Conover: I think among conservative reformers, there's an interest in sort of backing off. I think that Obamacare basically overpromised and underdelivered. It's just a really badly designed law that is ... if the exchanges had worked perfectly, the design itself is flawed. It just isn't going to work in terms of the economics of it. It's creating all these perverse incentives. It's creating a whole raft of new inequities. We can do a lot better. I'm sure of that.