Monday, November 3, 2014

Economic Issues In Healthcare

Health care costs have a profound effect on the economy.


The United States economy and health care have a direct impact on each other. Studies show that when the economy shrinks, unemployment goes up. As a result health insurance coverage drops, usually because most Americans obtain health insurance through an employer.


Health care costs have grown significantly since 1980. According to a Kaiser Family Foundation brief published in March 2010, the U.S. spent $253 billion on health care in 1980, $713 billion in 1990 and $2.3 trillion in 2008.


Economy and Health Coverage


According to a 2002 Kaiser Family Foundation study, for every percentage point increase in unemployment there was an increase in uninsured people by 0.5 percent. Because more than 60 percent of Americans have health insurance sponsored by an employer, workers often lose health coverage when they lose their jobs.


During a recession, employers often reduce health coverage benefits, take on coverage with higher deductibles (the amount a patient has to pay before health insurance begins to cover medical expenses) or increase employer premiums (the amount taken out of each paycheck to pay for health insurance) to save money. While workers who have lost their jobs are often eligible for continued health insurance coverage, called COBRA, many cannot afford to pay the higher premiums. Additionally, if a worker loses her job because her employer has filed for bankruptcy, the employer is exempt from offering COBRA.


A downturn in the economy affects public health insurance programs, like Medicaid and Children's Health Insurance Program, too. As states are forced to make budget cuts, state officials often will freeze health insurance program spending or reduce the coverage offered through the program to save money.


Heathcare Costs


Health insurance costs have increased dramatically over time. According to the U.S. Department of Health and Human Services, the average family deductible went up 30 percent in two years. Americans who are self-employed or have individual coverage have to pay twice as much in premiums as workers with employer-sponsored health insurance.


Over time, patients also have had to pay larger co-payments -- the amount paid at a doctor's office.


People who lack health insurance struggle to pay for health care procedures and medicine. Studies show that the uninsured will put off medical treatment until it becomes more urgent, which results in more expensive medical procedures. When those bills aren't paid, hospitals and clinics are faced with either passing on those costs to other patients or struggling under bad debt. The health care industry makes up a large part of local, state and the national economy, according to the U.S. Bureau of Labor Statistics.


Impact on Services


There generally is a growing need for health care workers, but hospitals and clinics are more likely to expand and hire workers when the economy is healthy. Recessions slow the growth of many health care jobs, particularly jobs for specialists or assistants, according to an August 2009 report by the Robert Wood Johnson Foundation. However, demand for community health centers and workers -- which serve the uninsured and the poor -- increases when the economy is weak.


Doctors and nurses will delay retirement during a recession. While there has been a growing shortage of nurses, the recession that began in 2008 actually lead to the return of formerly retired registered nurses who came back to work after a spouse was laid off.