Understanding the Inpatient Cost of Caring for the Uninsured

June 24, 2003

The convergence of a deteriorating economy, state and federal budget cutbacks and growing healthcare inflation has increased attention to the rising number of uninsured Americans. The purpose of this paper is not to explain the forces affecting the uninsured or to offer solutions to the uninsured problem. Instead, it focuses on quantifying the hospital inpatient costs of caring for the uninsured. It therefore provides a foundation for estimating the impact of changes in the size and composition of the uninsured population.

Uninsured hospital patients differ from privately insured patients in their age, the inpatient services required and their severity of illness. This paper aims to document those differences.

Based on most recent estimates from the Census Bureau, 41.2 million Americans were uninsured in 2001.3 The percentage of people who were uninsured rose from 14.2 percent in 2000 to 14.6 percent in 2001. All indications are that those figures have increased since 2001 and will grow even higher as unemployment rises or as federal and state programs such as Medicaid are reduced.4 This report uses hospital discharge data from 10 states for 2001 or 2000, and the results are projected nationally.

This analysis seeks to answer the following questions:

• What are the inpatient costs of caring for the uninsured nationwide?
  
  
• What are the characteristics of the uninsured inpatients—age, type of services needed, and frequency of ambulatory care sensitive conditions (ACSC), which might be avoided with proper outpatient or preventive care?

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