When I had argued that our healthcare system is ready for structural changes (as a result of a collapse due to it being totally dysfunctional), I did not know that the problem was even worse. Apart from 45 million uninsured Americans (US is the richest country in the world), there are as many as 16 million adults that were underinsured in 2003, meaning they did not have enough financial protection to cover their health care expenses. (Related article: Business opportunity in providing healthcare to uninsured Americans)
In a study, "Insured But Not Protected: How Many Adults Are Underinsured?" The Commonwealth Fund's Cathy Schoen, Michelle Doty, Sara Collins, and Alyssa Holmgren find that inadequate coverage — much like no coverage at all — creates obstacles to care and other burdens. Underinsured adults are almost as likely as the uninsured to go without needed medical care and to incur medical debt. Lower-income and sicker adults are most at risk of having inadequate coverage. The authors warn that recent market trends will likely place increasing numbers of insured patients and their families at risk, due to higher cost-sharing and out-of-pocket cost exposure. An increase in the numbers of underinsured could undermine effective care, health, and financial security—making it harder to distinguish the uninsured from the insured.
While the statistics are very depressing, as I have been arguing before, not all the under-insured (and of course, uninsured) are poor or unemployed. As shown below, the Census data shows that as many as 12 million uninsured Americans have family incomes exceeding $50,000.
While the authors are talking about "the need for policy attention to insurance design," I think that market forces will be the drivers of change here. The cost of healthcare will drop and that will happen not because of policy changes but due to globalization. The authors warn that without policy attention, current trends toward rising cost-sharing will likely mean increasing numbers of underinsured among modest and lower-incomes adult and their families. Since policy changes are unlikely, businesses have to step in. And based on some recent discussions that I have had with overseas firms, the players will not be American firms - they will be companies based in Latin America and Asia.
What does it mean for you?
- Americans are already comfortable with overseas treatments since they order prescription drugs from Canada and Mexico and fly to many countries for plastic surgery. For non-emergency care, as long as the total cost of going overseas is lower than what they would have to spend here, Americans will take it - we know how to get value.
- The goal for any business to serve this market has to be to provide high-quality services at affordable prices. Long-term value will be created only through excellent healthcare.
- Forget the policy changes. The system is broken to an extent that nothing is likely to happen at the federal level anytime soon. I like the efforts of Governor Mitt Romney, but it is very likely that his plan might simply die because his political opponents may not want him to succeed at something that will be so remarkable.
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Keywords: Underinsured Americans