How Important Is Insurance to Health Outcomes?

The variability in health insurance by city and county accounts for 30% of the difference in health outcomes. What about the other 70%?
The variability in health insurance by Virginia city and county accounts for 30% of the difference in health outcomes rank. What explains the other 70%?

A dominant strain of political rhetoric tells us that having health care insurance is absolutely vital to maintaining peoples’ health and longevity. Without health insurance, people will die! The logic makes sense if one assumes that the United States (and Virginia) have a binary health care system in which people either (a) have health insurance (including Medicaid and Medicare), giving them full access to the health care system, or (b) lack insurance and receive no medical treatment. But in the real world, there’s a big fuzzy zone. Some insurance, frankly, stinks — limited choices, high deductibles and the like. And some uninsured people enjoy at least limited access to medical care at clinics, emergency rooms and hospital care.

On a lark — I honestly had no idea what results I’d get — I created a scatter graph comparing two data sets for 132 Virginia counties and cities. One comes from the StatChat blog: Health Care Coverage Across Localities in Virginia in 2015, based on data from the U.S. Census Bureau American Community Survey. The other comes from the Robert Woods Johnson Foundation 2017 County Health Rankings, which ranks city and county health outcomes on a basket of health quality and longevity metrics.

The chart above shows the results. As one would expect, there is a significant correlation — localities with lower percentages of uninsured working-age populations tend to have better health outcomes, and vice versa, higher percentages of uninsured populations translate into worse health outcomes.

But the R² coefficient is only .3044. That’s statistics-speak for saying that the variation in the percentage of the insured population accounts for only 30% of the variation in health-outcome rankings. (Note: that’s health-outcome rankings, not actual health outcomes. I readily concede that this is a quick-and-dirty analysis.) Thirty percent is significant, but it leaves a lot unexplained. Seventy percent of the variance is due to other factors.

The debate about health care in the United States over the past half century has focused mainly on expanding access to health insurance as a way of expanding access to medical treatment. But insurance accounts for maybe 30% of the problem. What about the other 70%? The Robert Woods Johnson (RWJ) attributes the following weights to different health factors:

  • 30% — health behaviors (tobacco use, diet & exercise, alcohol & drug use, sexual activity);
  • 20% — clinical care (access to care, quality of care);
  • 40% — social & economic factors (education, employment, income, family & social support, community safety);
  • 10% – physical environment (air & water quality, housing & transit).

Here in Virginia, Democrats are obsessed with Medicaid expansion, as if the percentage of population with insurance is the be-all-and-end-all of health policy. Unfortunately, Republicans have offered few reasons to oppose Medicaid expansion other than to emphasize the stress it would impose upon state finances.

Instead perpetuating this sterile debate out of partisan loyalty or antipathy to former President Obama’s signature legislative achievement, we should ask if we can make bigger gains in health outcomes at less expense than by expanding Medicaid. The RJW report gives heavier weight to personal behavior as reflected in smoking, substance abuse, sexual activity, nutrition and exercise. Perhaps the politicians should, too.

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5 responses to “How Important Is Insurance to Health Outcomes?”

  1. LarrytheG Avatar

    re: ” The RJW report gives heavier weight to personal behavior as reflected in smoking, substance abuse, sexual activity, nutrition and exercise. Perhaps the politicians should, too.”

    only if you believe that those without insurance have different personal behaviors than those with insurance. What proof do you have of that?

    Second – the “access” issue.

    these are the benefits people get regardless of the deductibles or premium cost:

    Every health plan must cover the following services:

    Ambulatory patient services (outpatient care you get without being admitted to a hospital)

    Emergency services

    Hospitalization (like surgery and overnight stays)

    Pregnancy, maternity, and newborn care (both before and after birth)

    Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)

    Prescription drugs

    Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)

    Laboratory services

    Preventive and wellness services and chronic disease management

    Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t essential health benefits)

    How many of the opponents are actually citing these “benefits” ?

    next – pre-existing conditions …

    finally – annual/lifetime caps…

    these is way, way more than “access to insurance only”.

    what we need here is more honesty in the debate.. real facts..

    It’s a no-brainer for most people . You can go bankrupt from one accident or illness if you do not have basic insurance – no matter how much it won’t pay for care outside of the minimum essential benefits, no denial of pre-existing conditions and no annual/lifetime caps.

    there actually is a real reason why millions of people continue to pay for ObamaCare even though it’s portrayed as “terrible”.

    “Terrible” is going to the hospital and incurring 15-25K in expenses and the hospital takes all legal and administrative actions to get the money even if it bankrupts you.

  2. LarrytheG Avatar

    1.6 Billion dollars is the current cost of uncompensated care in V.. and it has real impacts as most of the rural hospitals in Virginia are in dire financial straights .. yet the conversation is about the “right” for people to choose to not have insurance.

    The 1.6 billion is REAL unfunded liabilities.. a direct consequence of people exercising their “freedom” to impose these costs on others.

    Makes me wonder if FICA tax was “voluntary” how many folks would also choose to not pay that tax – which is used to pay for health care also.

    TMT has said that we need to REPEAL EMTALA .. so that we will refuse to
    treat people without insurance.

    Is that a realistic solution? How many elected have promised to do that as a way to cut health care costs? Any?

    1. TooManyTaxes Avatar

      Larry – sometimes I think all you want to do is give away other people’s money. EMTALA is a reason for people not to buy any insurance. If it were phased out over a reasonable period of time (say more and more individual liability begins each year or so- e.g., 5% in year one, 10% in year two, 20% in year three) more people would buy some type of insurance coverage to avoid the risk of ER bills.

      So long as EMTALA is on the books, do you really think it is not a reason that allows people to avoid buying insurance? Is that what it’s all about, provide incentives — both positive and negative — for people to buy at least some level of coverage.

  3. Thank you, Jim, for framing the question this way. Of course I’d like to see the Medicaid Expansion question asked as “can we do it better and/ or for less”? I sense that the support for Expansion is either partisans pushing for whatever McAuliffe wants, or supporters of universal care wanting to get Virginia into helping more people any way they can because it’s always harder to undo. Likewise the opposition, in opposition to both. TMT has made the case earlier for the States’ “51 laboratories” approach being better than the feds’ one-size-fits-all approach. Surely Virgina can think of ways to improve on Medicaid.

    But: the choice here is not binary, not apples to apples. The ACA says, expand Medicaid now and the feds will pay for it. In fact Virginians have already paid through federal taxes for it in all 50 states; simply come claim it; all you have to pay is the State portion which is zero or low at the start. Whereas: if we devise a “better” Virginia approach than Medicaid we’ll pay for both, which of course is a bad deal. And another complicating factor is, if the ACA is to be replaced anytime soon, will those States that signed up for Expansion before it ends get some sort of grandfathered or special deal under its replacement? Seems likely, given what we’ve already seen. On balance, I’d support Expansion now if greater coverage is the goal anyway, as we’ve discussed before. A better course of action OUGHT to be, accelerate the pressure on Republicans to endorse an ACA replacement SOON, one that allows the States greater latitude on health care for the poor and treats the ACA non-Expansion states as fairly as the Expansion states — but that seems politically riskier today somehow.

    1. TooManyTaxes Avatar

      Medicaid is busted. It costs a fortune, even without expansion, and yet reimbursements are often so low that many doctors won’t accept it. I think the idea that expanding it to get federal tax dollars is foolishness since we cannot afford either the federal tax dollars (or should we say borrowed dollars) or the state match.

      The problems are that we have too many people who don’t have the skills, education and work habits to make enough money to support themselves; we undercut these same people by allowing unlimited illegal immigration and there are too many people who assuage their guilty consciences by advocating spending more people’s money.

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