Health care in the U.S. is directly shaped, financed and delivered in the context of the national economy. The recession in America impacts health care in many ways that the Robert Wood Johnson Foundation (RWJF) recently explored in an off-the-record meeting in June 2009 including representatives from health care, the public sector, business, insurance, policy and research.

The results of this meeting are synthesized in an issue brief from RWJF, Impact of the Economy on Health Care, published in August 2009. This report describes the economy’s impact on the structure of health delivery, providers, public health, and utilization.

Insurance coverage. As the Kaiser Family Foundation determined in 2008, for every 1% of unemployment, there’s an increase of 0.5% in the number of people who become uninsured. The Urban Institute has revised this figure upward, figuring that a 1% point increase in the unemployment rate results in a 0.59 percentage point increase in the share of adults without insurance. The capacity of public programs such as Medicaid, CHIP, and the VA, to continue to expand their safety nets of coverage is more limited the longer and deeper the recession continues. Furthermore, where jobs are expected to grow — among smaller employers — insurance is financially difficult to

sponsor particularly in the recessionary climate.

Health providers.
It’s a perfect storm, RWJF, for provider economics: falling revenues due to falling demand for non-urgent and elective services, increased bad medical debt among patients, losses in investment incomes due to the stock market’s depressed results, lower charitable giving, and cuts in health funding by local and state governments.

Health utilization and outcomes. In the recession, Americans have changed their behaviors with respect to health care demand (that is, how they access health services as they are forced or incentivized to spend more out of pocket on care). In addition to foregoing elective procedures, KFF and other surveys have found Americans postpoining care for both preventive and urgent conditions, including visits to physicians, procedures and diagnostic tests, and filling prescription drugs recommended by a physician.

Health Populi’s Hot Points: Health reformers must pay attention to the complex interactions between the overall economy and stakeholders: providers, payers (employers), and patient-consumers. For example, expanding American health citizens’ access to primary care will directly impact the supply of primary care practitioners and their staff and workflow. While the conversation held by RWJF asks more question than it answers, the one reality that emerges is that the longer the recession lasts, the more uninsurance and bad health behaviors will ensue.