This is a legacy web site and some information may be out-of-date. For more recent information and postings, see www.tonynovak.com/cpa.


Tony Novak  800-609-0683
a passionate advocate for small business success

advice quoted in The Wall Street Journal and Money Magazine

Schedule a telephone consultation   

• Home 
•  Biography 
•  News 
•  Endorsements 
•  Services 
•  Publications 
•  Site Map

Rationing of free health care proves effective in reducing uninsured patients

by Tony Novak, CPA, MBA, MT
, revised 11/21/2011

The difficult but necessary process of restricting certain medical procedures for those without health insurance might be effective in changing the behavior of those patients. Recent operating data from the University of Texas Medical Branch (UTMB) indicates that the hospital network’s policy of rationing care for those without health insurance or adequate other resources is having a dramatic effect in reducing the number of patients who arrive for treatment without health insurance.  Since initiating various care rationing measures, the UTMB system reports a reduction in the number of uninsured patients requesting treatment at the hospital dropped from 26% to 17%. While the individual case stories are hard to accept, the hospital executives seem committed to the necessary strategy of rationing care according to a recent story reported in The Wall Street Journal (9/24/03). The rationing strategy was designed to preserve the financial stability of the hospital system, not as a measure to influence patients' behavior toward health plan enrollment.

Like most other states, Texas has open enrollment health plans that are available to everyone. But the cost of this coverage is prohibitive for those who purchase this coverage after they have expensive pre-existing medical conditions.  The monthly cost of some health plans can be larger than the combined average mortgage and car payment. In contrast, the average cost of a commercially available plan for a healthy individual is less than $150 per month. Previous studies published by various the U.S. government agencies and private firms show that the largest share of uninsured people are middle income individuals who could afford to obtain medical insurance but chose not to do so in order to redirect these funds for other living expenses. There was a common belief that anyone who showed up at the emergency room would receive the same standard medical care. Now, patients turned away for various expensive treatments by UTMB know that this is not the case. (Like most hospitals, UTMB continues to provide basic emergency care to patients without insurance).

There is no legal requirement that individuals carry health insurance coverage, but these measures are being considered in several states.  Mandatory universal health care is expected to be a significant national issue in the next presidential election campaign. The use of health care rationing might pressure individuals to make responsible health care protection purchases without the need for additional legislation. The UTMB will results likely fuel this economic – rather than legislative- approach to the national crisis of uninsured patients.

Status: available for reprint

This article is available for republication in its entirety without charge after obtaining the express written permission of the author.

Please e-mail a request to the author that includes the name of the requestor (individual and corporate) and the intended destination of publication.