The economists and financial experts always say health care is recession-proof. Traditionally, health care stocks have performed better in a downturn and people still get sick and need care and services.
But we are seeing a big drop in hospital admissions, doctors visits and elective surgery as people lose their jobs, lose their insurance and can't afford even small co-pays for health care. A large consumer survey conducted in February (seems like long ago!) reported only 11% of people felt they could handle upcoming medical bills. Heck, the economy was practically thriving in February compared to now.
With California unemployment over 8% (and rising) and millions of others working part-time or low-wage jobs, the ability to see a doctor or seek medical care is just out of the question for many people. Even people with insurance will postpone medical treatment because they don't want to miss work or be laid up.
"Consumer driven health care" is a code word for "you pay more," so most folks' co-pays are so excessive, when given a choice of the mortgage payment or doctor bill, the house wins.
Paul Keckley, executive director of the Deloitte Center for Health Solutions, told BusinessWeek that he sees three likely impacts from a recession: delays to primary and preventive care, delayed payment from those with high deductables, and increased bankruptcies from medical debt.
This recession is really going to put a strain on hospitals, care givers and patients in equal doses. It is a glaring example of how fragile our health infrastructure is.
Toni Brayer, FACP