An Analysis of Health Care Options for Nevada's Working Uninsured
- Wednesday, October 6, 1993
Health Care in America
It is estimated that this year in America, the private and public sectors will spend 666 billion dollars (14 percent of our Gross National Product) on health care. Despite this staggering commitment of resources, 35.7 million people, or approximately 13.5 percent of all Americans, are lacking medical insurance. Without insurance coverage or ready cash, uninsured persons may be denied hospital care, even in cases of emergency.
Controlling rising health care costs is a complicated matter. Health care cost-drivers include pharmaceutical costs and medical and product liability insurance, as well as community expectations for innovative (but not necessarily cost-beneficial) services. Anti-trust laws prohibit companies from forming coalitions which might result in the monopolization of certain goods. In past years, many have blamed hospitals for escalating patient occupancy rate, labor costs, and the degree of qualification of its administrators -- costs that are largely beyond control. As health care analyst Sean Sullivan stated, "Efforts to control total health care spending by pushing down on hospital rates are increasingly like pushing on a string."
In a broad sense, as we look at the history of advances in modern medicine from the development of antibiotics to the technology which produced Magnetic Resonance Imaging, we can begin to understand the general problem. This brisk march of technology, with its attendant basic research, has been a costly as it has been beneficial to mankind. These costs are ultimately passed along to the health care consumer, who is unable to bear the burden alone. Thus it seems that the government has some role in the general welfare by underwriting at least some of the cost of progress.
The State of Health Care in Nevada
In 1989, Nevada spent $2,757 on per capita health care, ranking it fourth-highest in the nation. Total spending on health care in Nevada has increased 251 percent over the past ten years, more than any other state except Arizona. This rate of growth in spending is 50 percent higher than the national average.
Approximately 17 percent of Nevada's residents lack health insurance. This exceeds the national average of 13.5 percent. In 1988, Nevada placed eighth in the nation for having the largest percentage of its population uninsured; a result of 87 percent growth in the number of its uninsured between 1980 and 1988. This rate increase was three times the national rate. Roughly two out of every three of these uninsured people were in working households and, for the most part, employed by small businesses which did not provide health insurance coverage. These are individuals who were not classified as uninsurable.
As survey taken by the American Hospital Association in 1989 contains two important conclusions. Nevada hospitals are above the national average in the availability of costly high-tech medical services, and Nevada hospitals experience high rates of utilization of these services. IT follows that even if the unit costs of some services (such as trauma centers, cardiac catheterization laboratories, and organ and tissue transplant centers) could be lowered, high utilization would still accrue high costs.
Nevada's demographics are changing. From 1980 to 1989, Nevada experienced a higher rate of growth in population than did any other state. Nevada's population grew by 40 percent, four times the national average. Most significantly, the number of elderly residing in Nevada has increased. Between 1980 and 1989, the population of persons aged 65 years and older grew 85 percent, the most of any state. Nevada's rate of growth of the elderly is four times the national average. The proportion of the elderly to the rest of the population is growing, as well. Ten years ago, the elderly represented only 8 percent of Nevada's population. Now they represent 11 percent (compared to the 12.5 percent of the American population).
Nevada's changing demographic situation goes hand-in-hand with its high growth in medical spending. These changes are significant in that the care for the elderly tends to be more expensive than that given to younger people. Consequently, the growth in the population of the aged will be an important factor in Nevada's strategy for health care reform. A 1991 an American Legislative Exchange Council study found that Nevada's Medicare patients ranked second in the nation for their need of expensive, specialty care and as many as 43 percent of elderly persons residing in Nevada will have need of nursing home care sometime before they die.