Illinois is close in nearly all dimensions to the national average in terms of health and health-care utilization. Therefore, the problems that are of concern to Illinois are similar to those in the rest of the country. Second, besides the rise in obesity, there does not appear to be any dramatic, or even notable, changes in health, health-care use, or insurance coverage in the last 10 years in either Illinois or the United States as a whole.

However, the relatively steady state of health and health care does not mean that there are not some issues of concern. Obesity is increasing rapidly and the causes of this increase remain largely unknown, as do solutions to this problem. The absence of clear solutions has resulted in relatively few public policy initiatives. Moreover, the averages referred to above hide significant racial and ethnic disparities in health and use of health care.

Disparities in health are the result of complex factors that are highly correlated with education. Health insurance coverage and use of medical services are weakly related to racial and ethnic health disparities. Meaningful advances in eliminating racial and ethnic health disparities will need to come from different policy initiatives and here too, public health initiatives may be key.

Trends in Health Care Spending in Illinois

            In Illinois, as in every other state and every other developed country in the world, growth in health-care expenditures is outpacing growth in income.

            What are the consequences of this imbalance between the growth of health-care expenditures and growth of income?  There can be only three: health care will take an increasing share of public resources; and/or spending on other items such as schools and roads will decrease relative to health care; and/or new revenue will be needed to maintain current spending shares.

            Illinois, in the absence of significant federal initiatives, will have to take at least some of the following actions: slow the growth in health-care spending; cut back on efforts to expand insurance; and re-orient health-care spending toward initiatives that address the major health problems facing Illinois today.

Health Care Reform

            The most important development in health policy in Illinois last year was Gov. Rod Blagojevich’s Illinois Covered proposal. This is primarily a plan to reduce the number of uninsured in Illinois, but it also has elements that will help improve health and hold down the costs of health care. Parts of this proposal have been implemented by the governor through executive authority and parts are still waiting legislative approval.

The Illinois Covered plan represents a major commitment of the state to address the problem of the uninsured and, in this regard, Illinois is a national leader. However, full implementation of the program will be quite costly, and it is uncertain whether the state has the resources to fully implement such a bold initiative.

Health Insurance Coverage and Markets

            In 2006, 15.8 percent of the U.S. population was uninsured, up from 15.3 percent in 2005.  Private health insurance coverage dropped nationally from 68.5 percent in 2005 to 67.9 percent in 2006.  Medicaid enrollment nationally was 12.9 percent in 2006, down slightly from the 13 percent recorded in 2005. By comparison, in Illinois the percentage uninsured in 2006 was 14 percent, up from 13.7 percent in 2005. Overall, Medicaid enrollment in Illinois increased modestly in 2006 to 10.9 percent from 10.8 percent in 2005. In contrast to national trends, private health insurance coverage in Illinois increased (albeit modestly) from 72.7 percent to 72.8 percent. 

There are 100 different health insurance policies available to individuals from seven different insurers via the web-based health insurance marketer eHealthInsurance.com, 31 of which are Health Savings Account (HSA) eligible. For a 38-year-old male, the premiums range from $60 per month to $320 per month. By contrast, in a heavily regulated state such as New Jersey there are only 14 plans available from three different insurers, none of which are HSA eligible. The premiums for these polices for a 38-year-old male range from $177 per month to $658 per month. Illinois consumers, legislators, and providers would want to be very cautious about pursuing a heavily regulatory regime in the state health insurance market. 

A New Approach to Managing Medical Malpractice Risk

A recently implemented initiative at the University of Illinois Medical Center at Chicago has the potential to reduce the frequency and volatility of medical malpractice claims and to improve the reliability with which victims of medical injury are compensated. Now in its third year, the initiative shows signs that it may lead to a rapid and significant reduction in the MedicalCenter’s financial burden of its medico-legal liability. The MedicalCenter’s excess liability insurer has offered to reduce the Center’s yearly premium, anticipating a reduction in exposure to very large claims.

While full disclosure and tort reform may reduce litigation, they will differ sharply in their effects on the twin objectives of any medical malpractice liability system, namely to compensate victims of medical injury due to negligent care and to deter negligent care. By including an offer of rapid remediation, a policy of full disclosure will likely raise compensation for medical injury, while tort reform measures will reduce compensation, as they reduce the expected return from filing a lawsuit. The research evidence to date, however, suggests that too few victims of negligent care are compensated, so tort reform measures will aggravate a shortcoming of the present litigation-based system rather than mitigate it. To the extent that tort reform also reduces the frequency and average amount of payments made by providers, it will erode the deterrent effect that the threat of legal liability carries and thus the incentive to improve patient safety.

Changing Priorities for the Regulation of Hospital Markets

            The push by the state attorney general to hold nonprofit hospitals more accountable for the amount of charity care they provide in return for their tax exemptions did not resurface on the AG’s 2007 legislative agenda with the same vigor as it appeared in 2006. At the time of this writing, the Tax-Exempt Hospital Responsibility Act, which would have required every “tax-exempt hospital to furnish aggregate annual charity care in an amount equal to at least 8 percent of the hospital's total operating costs,” has not been passed in either chamber of the Illinois legislature and its prospects for passing in the foreseeable future are uncertain.

By contrast, the Fair Patient Billing Act, which “requires hospitals to give patients written notice that they may be eligible for financial assistance,” was passed and has been effective since Jan. 1, 2007. In this context, the continued adoption of high-deductible tax-advantaged health insurance plans, more commonly known as consumer-driven health plans (CDHPs), is noteworthy. By exposing patients to a greater degree to the cost of their health care than conventional insurance products do, CDHPs raise the demand for information on the price and quality of the services offered by different providers.