Getting to 100%: Research Priorities and Unanswered Questions to Inform the US Debate on Universal Health Insurance Coverage

Abstract

A majority of Americans favor universal health insurance, but there is uncertainty over how best to achieve this goal. Whatever the insurance design that is implemented, additional details that must be considered include breadth of services covered, restrictions and limits on volumes of services, cost-sharing for individuals, and pricing. In the hopes that research can inform this ongoing debate, we review evidence supporting different models for achieving universal coverage in the US and identify areas where additional research and stakeholder input is needed. Key areas in need of further research include how care should be organized, how costs can be reduced, and what healthcare services universal insurance should cover.

BACKGROUND

A majority of Americans believe that healthcare should be afforded to all residents.¹ However, there is uncertainty and disagreement over how best to achieve universal insurance coverage, what services should be covered, and in what quantity.² Recognizing that healthcare is expensive, ensuring that all Americans have an acceptable level of health insurance coverage is a crucial first step towards optimizing the health of the nation.^3,4 The United States (US) could achieve universal coverage through several different insurance system designs.⁵ For any design framework that might be implemented, additional details that must be considered include breadth of services covered, restrictions and limits on volumes of services, cost-sharing for individuals, and pricing.⁶ In the hopes that research can inform this ongoing debate, we review evidence supporting different models for achieving universal coverage and identify areas where additional research and stakeholder engagement is needed.

The US notwithstanding, virtually all other high-income countries achieve universal coverage, albeit through different routes.^7,8 In the Beveridge model, both insurance and healthcare services are provided by government and financed by taxes; physician services are typically capitated. For most countries employing this model, such as the UK, Spain, and New Zealand, government insurance covers a carefully circumscribed “essential” basket of services, while a parallel private delivery system (and insurance system) allows patients to obtain health services for a fee. In the Bismark model, used in Germany, the Netherlands, and Australia, residents obtain insurance through a limited number of highly regulated private insurance companies, typically financed through a combination of direct government payments supplemented by individual contributions.⁹ Private insurers are not permitted to differ with respect to price, and thus must compete and differentiate in other areas such as enrollee and provider satisfaction. Finally, countries such as Canada and Taiwan provide healthcare through a national health insurance model in which virtually all healthcare services are covered by a single governmental insurance pool funded with tax revenue; this model typically does not include any parallel private care system.^10,11 In most models, services that are considered nonessential are typically not covered and can be significant (e.g., dental, vision, prescription medications).

Countries typically select and adapt their chosen model to fit their priorities and needs, and models often overlap to some degree. Virtually all models achieve universal insurance coverage for residents. While studies from other countries are a crucial source of data about routes to universal coverage, it is important to acknowledge the limits of extrapolating data from foreign countries to the US political and economic context. In the next section, we review the available evidence concerning the impact of universal insurance coverage with respect to three key domains: health outcomes, cost, and equity.

1. Impact on health outcomes: There have been several studies conducted in the context of the existing fragmented US healthcare system that provide evidence of the potential impact of universal insurance.^12,13 Most notably, the RAND Health Insurance Experiment conducted in the 1970s^14–16 and Oregon Medicaid expansion¹⁷ in the 2000s provided health insurance to patients who may not have had it previously. Evaluations of these interventions yielded strong evidence of the substantial positive effects of health insurance on many measures of health including diagnosis of certain illnesses (e.g., diabetes, depression), medication utilization, and subjective well-being, but limited evidence of impacts on health outcomes. Because of their randomized and quasi-randomized design, these studies deserve special weight. The RAND study, although having a relatively limited number of poor participants, did show that economic disincentives to getting care had more impact on the poor than the more affluent, providing evidence in favor of universal coverage.¹⁸ More recently, studies of the Affordable Care Act (ACA) have found that obtaining health insurance is associated with clear improvements in subjective well-being, probable improvements in chronic disease care, and potential reductions in cardiovascular mortality.^19–21 In sum, these studies provide strong evidence that health insurance improves several important health outcomes.

2. Impact on healthcare costs: US healthcare spending ($10,500 per-person per-year; 18% of GDP) is very high — approximately double that of other high-income countries.^22,23 The US differs from most other high-income countries in having high per-unit prices for healthcare services, high utilization of many discretionary medical and surgical procedures, lower investment in primary care services, and essentially no mechanism for restricting utilization.^24–26 Virtually all countries with publicly funded universal coverage impose significant limitations on the prices and quantity of services provided and have implemented formal systems to minimize low value care.^27–29 The UK’s National Institute for Health and Care Excellence (NICE) explicitly incorporates cost effectiveness in coverage decisions, while Canadian provinces use global budgeting of hospitals to restrain utilization of costly and potentially inefficient inpatient procedures. Experience from the US has demonstrated that expanding health insurance increases demand for services and utilization,^16,30 while greater cost-sharing has been shown to restrain utilization of both medically necessary and unnecessary services alike.^31–34 Evidence suggests that irrespective of the model selected (Beveridge, Bismark, or national insurance model) insurance expansion typically coincides with policy changes that limit price, quantity, or coverage of services to restrain spending.

3. Impact on equity: While approximately 8.5% of all Americans are uninsured, data from the Kaiser Family Foundation demonstrates that the uninsurance rate varies from approximately 17% for Americans with incomes of less-than 200% of the federal poverty level to just 4% for those with incomes greater than 400% of the poverty level.³⁵ An estimated 20–30% of Americans are considered underinsured and most insured Americans have substantial out-of-pocket healthcare expenses due to various forms of cost sharing.^36,37 Uninsurance and underinsurance is more common in the Black and Hispanic populations.^35,38 Both acute and chronic illnesses have been shown to contribute to loss of health insurance and financial hardship.³⁹ The relationship between good health and personal financial stability in the US is further enabled by the American system of linking health insurance and employment. The linkage between employment and health insurance leaves Americans vulnerable to becoming ill, and subsequently losing both their job and their health insurance, creating severe financial hardship and even bankruptcy.³⁹ Moreover, risk for bankruptcy due to illness has persisted even with healthcare reform.^40,41 While cross-border comparison studies are limited, some data suggests that Canadians who file for bankruptcy are less likely to report significant medical bills when compared to their US counterparts.⁴² Other international comparisons suggest that low-income Americans seem to fare worse than their low-income peers in high-income countries with universal health insurance. ^43–45

To summarize, empirical data suggests that universal health insurance improves many aspects of health, and is usually coupled with strategies to contain spending. Virtually all high-income countries have achieved universal coverage for a broad basket of essential health services at a reasonable cost to public budgets while decoupling insurance from employment. Importantly, the models for universal insurance coverage tend to reflect the public values and underlying political structures of each country and thus it is naïve to consider insurance in isolation.⁴⁶

Over a 1-year period, the SGIM Health Policy Research Committee discussed and subsequently identified three key areas that we believe require additional public debate and/or research to inform the ongoing debate and allow universal coverage to be realized. This manuscript benefited from additional input from the SGIM Health Policy Executive Committee and a broad group of SGIM leaders. Each area is discussed in turn below.

1. How should insurance coverage be provided and organized? While a modest majority of Americans support universal insurance coverage (55–65% in most polls),¹ there remain several key areas where consensus is lacking. A slight majority (55%) of Americans favor the introduction of a public insurance option,¹ but with nearly 60% of Americans covered through employer-sponsored plans, eliminating private insurance would be challenging. A more immediate and pragmatic challenge for US researchers, policy makers, and legislators would be defining and evaluating options to reduce the complexity of the US private insurance market. Virtually all other high-income countries restrict the number of insurance providers and carefully regulate operational functions, often limiting administration costs and profit margins. Research and dialogue is needed to define whether and how private insurance companies could be consolidated and regulated. The private insurance industry and purchasers should be considered partners in conducting the research and dialogue that is required. A related area involves the role of an individual insurance mandate. A slight majority (53%) of Americans favor an individual mandate, though support varies depending upon the population subgroup being sampled. Research is needed to better clarify public opinion regarding insurance reform and organization. Information is required both for the overall US population and for key population subgroups including people who are uninsured or underinsured, but also people with employer-sponsored insurance. Moreover, with 50 different states and hundreds of discrete healthcare markets, the US has an opportunity for randomized or quasi-randomized interventions that could test the impact of regional insurance reform efforts in a scientifically rigorous way.

2. How should the US lower costs? There is general recognition that US healthcare spending, which is already high, will need to be restrained while simultaneously extending coverage to the uninsured and underinsured. A systematic approach to conducting research and engaging the public is needed to address several thorny areas where savings must be achieved.

   1. Prices for many procedures and acute-care healthcare services including hospitalizations, drugs and devices, and physician services are high in the US relative to other high-income countries. Since prices borne by patients and payers constitute profits for investors, revenue to hospitals, and salary to healthcare providers and staff, expecting any enthusiasm from the healthcare sector for price reductions seems unlikely. At the same time, the US underinvests in primary care with a resultant surplus of specialists and a chronic shortage of primary care providers.⁴⁷ Given the significant exposure of federal and state government to the effects of higher prices both in their roles as funders of Medicare and Medicaid, but also in their role as healthcare purchases for their employees, government must consider a more active role in lowering prices. We can and should learn from other countries that do this better. Research is needed to evaluate mechanisms for setting provider reimbursement and salaries; could US reimbursement rates be indexed to salaries from other high-income countries and adjusted to both international and regional differences in cost-of-living? Hospital, drug, and device prices could be indexed in similar ways. If government price indexing were paired with user-friendly price transparency data, it is possible that employer-sponsored insurance plans could see substantial benefits as well. Research would be needed to develop such price indices, while engagement with private insurers, healthcare providers, hospitals, and drug and device makers would be crucial to these efforts.
   2. Reducing the number of insurers, thereby simplifying billing and reducing administrative costs for providers and hospitals, is another opportunity for lowering healthcare costs.^48,49With hundreds of private insurance plans, accelerating insurance industry consolidation is a potential starting point; research is needed to consider the regulatory levers available to facilitate such consolidation as well as careful monitoring programs to ensure that consolidation does not lead to increasing prices, and that savings are returned to purchasers or employees in the form of lower premiums, and not just folded into profit margins. Research is needed to identify low-cost, high-efficiency insurance providers as a prelude to any efforts towards insurance industry consolidation.
   3. Rigourus quantification of profits and profit seeking behaviors of insurance companies and delivery systems, with consideration of the role for regulatory intervention. To move forward we must advance beyond debate about the merits of for-profit and not-for-profit entities.⁵⁰ Instead, there must be research into standardized accounting practices, auditing of financial statements, and publication of transparent and comparable profit margins.⁵¹

3. What should universal insurance in the US include and cover and how do we decide? The US healthcare system has featured an unsustainable combination of scant price controls and virtually unlimited demand for services. Many high-income countries have formal processes for engaging government, regulatory bodies, insurers, healthcare delivery systems (including physicians), and the public to act in partnership to determine what services can be covered given various constraints through the process of health technology assessment (HTA). While the HTA process can differ widely between countries reflecting different priorities and values,^52,53 the process does provide an organized framework for adjudicating coverage decisions in the context of budgetary and delivery system constraints. Expanding insurance coverage in the US must include an agreed upon process to determine the basket of services that will be publicly funded, with recognition that certain services will not be. Research is needed to define an acceptable framework, acceptable methodologies for comparing the value of widely disparate clinical services, and evaluating how best to engage various stakeholders (patients, industry, providers, caregivers) in the process.

Public funders including CMS, PCORI, AHRQ, and potentially the newly created ARPA-H should facilitate research required to fill current knowledge gaps.⁵⁴ This could include a joint public-private collaboration to develop research priorities and commit funding to these efforts. Given the size and scope of existing research efforts both within government and academia, such a collaboration would be vital to avoiding duplication and ensuring that new areas of research do not duplicate work that is already underway. Such an effort would fit well within the purview of the National Academies of Medicine.

A WAY FORWARD

SGIM unequivocally supports a system of universal health insurance coverage for all Americans, but also recognizes that fiscal sustainability will require difficult discussions about how universal coverage is achieved and paid for. In the 10 years since passage of the Affordable Care Act, the United States has enacted multiple important reforms, but have failed to build a robust national consensus around several foundational issues including how insurance should be delivered and by whom, how hospitals and providers should be encouraged to reduce their costs, and what services can be covered and in what quantity by insurance largely paid for by public dollars. Absent research and public conversation about these issues, significant progress is unlikely.

We also believe that achieving universal insurance must be considered in the context of nearly 250 years of US political history, legislation, and healthcare system evolution. It may be easier to adapt a Bismark or Beveridge model to the US context than to adopt a national health insurance model, but it is also important to recognize that a national health insurance model may well offer several long-term advantages

Accordingly, we advocate strongly for rigorous and objective research on existing coverage systems, both in the US and internationally, that can be incorporated into these policy discussions. Research should be paired with a robust national conversation that involves all stakeholder constituencies. Through such a process, we are optimistic that we can achieve our goal of high-performing universal health insurance.

Funding

JC is supported by K23 career development award from the US NIA (K23AG062797).