As Economy Worsens, Americans Start Cutting Back on Healthcare

I'll save the political commentary on what exactly it means when citizens of the "richest" (ex debts) country on Earth need to cut back on healthcare when a (non)recession arises. More "Pooring of America"; frankly, it is just a sad commentary that I doubt many foreign readers would understand.

Part of the dog eat dog "ownership" society, I suppose.

This is part of a longer term trend as many small businesses have pulled the plug on healthcare for employees as it is simply too prohibitive in cost. But the economic slowdown (don't call it a recession, because the government/CNBC will get upset) is pulling the curtain back on Oz.

Remember, as you read the numbers below, it is actually worse than the %s indicate, considering the US population is (a) growing and (b) graying. So just on a natural course healthcare spending should increase and never flatten - unless we are getting much healthier.

• As the credit crunch threatens to throw the economy into a deep slump, Americans are already cutting back on health care, a sector once thought to be invulnerable to recession. Spending on everything from doctors' appointments to preventive tests to prescription drugs is under pressure.
• The number of prescriptions filled in the U.S. fell 0.5% in the first quarter and a steeper 1.97% in the second, compared with the same periods in 2007 -- the first negative quarters in at least a decade, according to data from market researcher IMS Health.
• Despite an aging and growing U.S. population, the number of physician office visits also has been declining since the end of 2006. Between July 2007 and 2008, the most recent month for which data are available, visits fell 1.2%, according to IMS.
• 22% of 686 consumers said that economy-related woes were causing them to go to the doctor less often. About 11% said they've scaled back on prescription drugs to save money.
• Since sales at the Sebring, Fla.-area car dealership where Christopher Pye works have dwindled, so have the commissions that were 40% of his income in good times. Barely able to afford his $850 monthly mortgage and pay for groceries, he says something had to give: his two young sons' annual medical checkups. "It's just a little too expensive right now," says Mr. Pye, 32 years old, who says he can't afford to have his family on the company health plan or to pay up front for the visits. This month, Mr. Pye is canceling his own insurance, hoping the $56 he'll save in weekly premiums will pay for the exams of his boys, ages 3 and 4, later.
• Health-policy experts say that patients' short-term care cutbacks could lead to more medical problems and higher spending down the road. As more people forgo screenings or wait until minor medical problems blow up into serious complications, hospital and emergency-room admissions could eventually spike. (ah but that's the rub of "kick the can" economics in the US... kick the problem down the road and then you can pay a much bigger bill when it explodes into crisis - the government does it by choice, but many people are forced into such decisions - as always never preventative, always reactive - the American credo) "Once you've had that heart attack and end up in the hospital, that's when the expensive stuff begins,"
• Healthcare companies say the current economic slump's impact on demand for medical services has been surprisingly swift. Laboratory Corp., the country's second-largest clinical lab-testing company by sales after Quest Diagnostics Inc., says the number of blood tests and other types of lab work it does for uninsured customers fell 8% in the second quarter, compared with the 1% quarterly growth it usually sees. (people have to pay for gas and food - priorities)
• The company's analysis of outside market data also shows that obstetrician-gynecologist visits, the sole source of preventive care for many women, dropped 6% in the first quarter compared with the same period last year.
• Speaking at an investor conference this month, Walgreen Co. (WAG) Chief Executive Jeffrey Rein said the U.S. is experiencing the "tightest prescription market" in his 27-year career, as more cash-strapped patients skip their pills or take half doses.
• A recent analysis of claims from 250,000 people in several dozen mid-Atlantic employer health plans suggests even people with coverage are cutting back on care. The study, conducted for The Wall Street Journal by research firm D2Hawkeye, found that a number of preventive or nonacute areas of care saw declines despite little change in benefits or employee cost-sharing. Knee replacements per 1,000 people fell 18.6% between March 2008 and March 2007, pap smears fell 6% and dispensed prescriptions for antidepressants dropped 29%, the D2Hawkeye analysis shows.
• Jim King, a family physician in Selmer, Tenn., says patient visits at his practice this summer were down 10% to 15% compared with summers past, even though 90% of his patients have some form of insurance. "It's hard to get people to follow up when they're having to decide between the gas bill, the electric bill or deciding to come in and see the doctor," Dr. King says. (this is the reality - not what the NYC traders believe when gasoline drops 50 cents)
• The cost of premiums to employees has nearly doubled to $3,281 a year since 2001.
• People who buy health plans on their own often face even higher deductibles. Patricia Campbell of San Diego bought a $7,500 deductible plan after she took fewer freelance television production assignments to help care for her mother, who has Alzheimer's disease. Her doctor has told her that the longer she waits to get a cataract in her left eye removed, the harder it will be. But she says she can't afford to pay for the surgery because she is still paying off her share of the costs of an appendectomy last year. "Since I don't work out of the home, it's not that crucial," she reasons. "And I can drive with one eye." (great - just great - note to self; avoid driving in San Diego)
• Medicare beneficiaries on fixed incomes say higher energy and food prices are making it tougher for them to pay for drugs as well, even those who have the government program's drug benefit. Some, like Joan Stroup of Butte, Mont., are starting to hit the drug plan's coverage gap, which is $3,215 this year. The gap in 2008 begins after beneficiaries and their plans pay $2,510 in drug costs, at which point plans aren't required to pay benefits until spending reaches $5,725. Then benefits kick in again.

Again it really does not matter what the government reports purport to say about the "health" of the economy - the reality on the ground is many in this country are suffering and falling behind. It's a decade long erosion of living standards that the slowdown is now exposing as people are unable to juggle and pull from various credit outlets. The "local economy" is very weak for many, even if US multinationals are enjoying record exports and/or profits - that means nothing to many US citizens as the greatest share of US capital is going to corporations and away from workers since the 1920s. Should be an interesting winter as those heating bills come due.

Comments

[Urbane Gori...:]

Very novel and timely article..... Thanks jegan

2008 Sep 25 04:20 PM

[danf:]

Interesting. It does reflect my choices...Many doctors visits are for marginally treatable ailments like colds. Many others are for obscure, chronic ailments. Health care works well for symptoms that point to obvious problems whose diagnosis yields to testing. The current care system does not work well for anything other than those obvious testable issues.

My experience with a chronic ailment has taught me that often times spending money in the health system is wasted money....

When insurance is paying, people are indifferent to the waste. When it's your own money, one looks for value for money spent.

I also find it curious that a visit to the vet is $25 and a visit to the doctor is $100. In many cases, I think my dog gets better care. Maybe it's because the vet can't count on insurance paying the bill.

2008 Sep 27 06:44 PM