Recession Reduces Health Care Utilization

Here’s a fascinating finding from an NBER study: “The Economic Crisis and Medical Care Usage,” by Annamaria Lusardi, Daniel Schneider, and Peter Tufano (NBER study #15843).

They undertook a broad public survey across 5 countries (the U.S., Canada, U.K., Germany, and France) on the economic and social impacts of the recession.  The survey covered over 6000 individuals (over 2000 in the U.S., and over 1000 in each of the others), and asked a range of questions regarding how the recession changed their behaviour.  It was administered last June.

One question they asked was whether or not respondents had reduced their use of routine medical care services.  This result was striking.  Here is the proportion of respondents in each country who reported reducing their use of routine medical services, in descending order:

U.S.: 26.5%

France: 12%

Germany: 10.3%

U.K.: 7.6%

Canada: 5.6%

The authors make the obvious conclusion: namely, the higher are the out of pocket fees associated with medical care, the more individuals will cut back care when they are worried about their employment and economic security.  Canada and the U.K. have the lowest user fees among the five countries surveyed; and in those countries, there was virtually no change under the recession in patterns of care utilization.

Ironically, of course, there’s no better time to get medical care than during a recession:  Disruptions to normal work are reduced, and the stimulus to spending is helpful macroeconomically.  Think of getting a medical “tune-up” as the personal equivalent of an investment in public infrastructure (which is also highly appropriate during a recession).  Yet market-based care produces the opposite result: a pro-cyclical trend in health care utilization that denies care when individuals (and the economy) need it the most.

This study is striking testimony to the success of Canada’s universal system, and the dangers of privatization, user fees, and the other “reforms” parroted so loudly these days by the CMA and other conservatives.

One comment

  • I’m not at all surprised by the pro-cyclical nature of health care use in the US since employer-sponsored medical plans fund so much of the health care bill. They are a very large player in Canada as well, which is what probably explains the drop.

    Losing your job means you lose health coverage as well and your out of pocket expenses go up higher than usual. Usually, there’s a period of a few months after one gets a new job before the health coverage kicks in, so with higher than normal job turnover rate we should expect to see more people delay receiving health care.

    And that’s for people who receive health benefits from their employers, and we know that many workers don’t.

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