Recession's impact limits consumers' health care spending

Recession's impact limits consumers' health care spending

January 6th, 2011 by Emily Bregel in News

U.S. health care spending grew at a historically slow rate in 2009, but the slowdown wasn't because of a healthier population or better coordination of care.

Most was because cash-strapped patients avoided medical care, according to a federal report.

In the recession, many who took pay cuts or lost jobs and health insurance ended up delaying medical care, according to an annual report on health expenditures released Wednesday by the U.S. Centers for Medicare and Medicaid Services.

Consumers spent less out of pocket, went to the doctor less often and spent less on physician visits, the report found.

Local medical providers are witnessing the effect firsthand.

"A lot of the elective visits people have for their health maintenance dropped off," said Dr. Mack Worthington of UT Family Practice, past president of the Tennessee Medical Association. "People are waiting much later to come in, even trying to manage at home with illness. ... People are trying to save."

Dampened by the Great Recession, health spending grew at a rate of 4 percent in 2009, the lowest annual rate of increase in 50 years.

But spending still is on the rise.

For the first time, health-care expenditures per person surpassed $8,000 in 2009, and total spending reached $2.5 trillion.

Although the National Bureau of Economic Research concluded that the recession officially ended in June 2009, the effects linger, local providers said.

Some people who lost jobs kept health insurance benefits through the federal COBRA program for a while, providers said, but many held off seeking care for as long as possible.

It wasn't until 2010 that local charity care program Project Access experienced a "dramatic" surge in demand, said Dr. Joe Cofer, program director for the surgical residency program at the University of Tennessee College of Medicine in Chattanooga and founder of Project Access in Chattanooga.

Project Access provides free specialty medical care to uninsured Hamilton County residents.

"A lot of people had health-care problems and put them off as long as they could, but a year or two later, their [condition] is to the point where they could no longer stand it and need help," he said.

The program screened 2,400 people who sought help in 2010, compared to 1,700 the year before, said Rae Bond, executive director of the program.

EFFECT ON HOSPITALS

Hospitals admitted fewer patients largely because of patients delaying care, the report said.

Overall hospital spending grew by about 5.1 percent in 2009 and 2008. That's compared to growth rates of 7.2 percent a year earlier in the decade.

In Tennessee, admissions to acute-care hospitals were 805,000 in fiscal 2009, down from 827,000 the previous year, according to the Tennessee Hospital Association.

The decline hit Erlanger Health System, but admission rates began to stabilize in early 2010 along with the economy, said Jim Brexler, Erlanger president and CEO and chairman of the Tennessee Hospital Association.

Brexler said one trend that has held steady for years is the growing number of patients who can't pay for their care.

Tennessee hospitals absorbed $1.4 billion worth of uncompensated losses from charity care, bad debt and unreimbursed TennCare costs, said Craig Becker, president of the hospital association.

"That's just a huge number. That means the paying customer, the people who have commercial insurance, are paying for it," he said.

The CMS report found that in 2009, enrollment in private health plans declined by 3.2 percent as more people lost employer-sponsored health insurance.

The growth rate in the amount spent on private health insurance premiums also slowed significantly in 2009 to the slowest rate in nearly 50 years. Premium costs increased by 1.3 percent in 2009, compared to 3.5 percent in 2008, the report stated.

POLL: Have you had to cut back on health care expenditures?