Tuesday, November 30, 2010

Health Care is Not Recession Proof

I've heard people say that health care is recession proof.  Even when the economy is suffering, people still get sick and need service.  The current recession is entering the 3rd year and it has finally caught up to the health industry.  The latest Bureau of Labor Statistics reports that there were 16 mass hospital layoffs in October, up from 10 in September.  Mass layoffs involve 50 or more employees and in the first 10 months of 2010,  128 mass layoffs occurred.  The Bureau projects 12,349 initial claims for unemployment benefits, which surpasses the number in 2009.

What causes mass layoffs?  The recession and unemployment has reduced demand for elective procedures and reduced reimbursement from government programs (Medicaid and Medicare).  Charity care has also increased and hospitals are adjusting to a lower bottom line by eliminating their most costly item...employees.

Physicians, too, have noticed a decrease in patients in the office.  Doctors who previously had a long wait for appointments are now more available.  That is a good outcome.  But bad debt is soaring.  Insurance companies have shifted more first dollar coverage to employees in the form of high deductibles and co-pays.  Neither the patient nor the doctor knows how much the patient's responsibility will be at the time of the visit.  When the bill is finally adjudicated...sometimes months later...it is increasingly more difficult to collect from the patient.  (As an example, I just got an insurance check from an office visit in June.)

Despite these gloomy facts, health care remained among the few sectors adding jobs.  The health sector grew by 0.2%.

13 comments:

Anonymous said...

I was flabbergasted when my husband who plays tennis daily in sunny Bay Area, eats well, yet tested low for Vitamin D. Vit. D is supposed to be manufactured in the body when exposed to sunlight. The article reporting this calcium/Vitamin D news suggested the possibility that the recommended level of D of 30 ng/ML is too high. I too tested less than 30 ng/ML and am in the sun daily. It makes me wonder about the accuracy of recommended amounts.

Eminia said...

very true..Lap band surgery

Toni Brayer, MD said...

Hey Laura Bush: quit smamming my blog

Glenn Laffel, MD, PhD said...

That last sentence in your post seems to contradict the basic premise. The sector as a whole, did in fact grow, even if there was a redistribution of the workforce away from hospitals. In fact health care has grown almost continuously for at least the last 40 years, despite numerous recessions. Too bad we can't show that the quality of care has grown along with it!

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