Notes on the news:
- For years, proponents of whats called consumer-driven healthcare have argued that making people sensitive to healthcare prices would make them wise shoppers and hold down costs. Now, the recession has imposed a sweeping form of consumer-driven care that is making many people nonshoppers. The results are not pretty.
As finance reporter Melanie Evans noted in our April 20 issue (p. 12), the economic downturn and job losses are causing fewer patients to seek care. Hospital patient revenue has declined as states slash healthcare spending and insured patients delay elective care. Some hospitals are trimming expenses or asking for deposits from uninsured patients. It hurts all the more because investment portfolios have been trashed.
A recent Kaiser Family Foundation poll showed that more than half of Americans say their household cut back on healthcare because of cost concerns during the past 12 months. The situation will only become worse as the layoff frenzy continues. Urban Institute researchers estimate that every percentage point rise in the national unemployment rate causes 2.4 million people to lose job-based coverage. Some 8.9 people have lost employer-sponsored insurance since 2007. The number of uninsured Americans, which reached a total of nearly 46 million in 2007, has risen by about 3.9 million since then, according to Kaiser estimates.
Not surprisingly, two major insurersWellPoint and UnitedHealth Groupreported losing members to unemployment.
Healthcare is traditionally thought of as recession-proof or at least recession-resistant. This downturnthe most severe since the end of World War IIcould test that theory.