Recession: Blessing in Disguise for Healthcare?


Our economy is in a vulnerable condition. Some believe a recession has been avoided while others believe the worst is yet to come.

Though it is too soon to tell whether we are in a recession, it is fair to say that our economy is in a vulnerable condition. Some believe a recession has been avoided while others believe the worst is yet to come. Healthcare has often been described as a recession-proof industry because sickness and matters of life and death are oblivious to economic climates. Heart attacks, strokes and cancer cannot be scheduled or rescheduled, and therefore, products from pharmaceuticals and biotechnology companies will always be in demand. However, it is difficult to separate healthcare from economic instability when in 2006 it consisted of 16% of the GDP. There are weaknesses in the health system and this recession-proof theory is up for challenge.

While the pharmaceutical industry may be on more solid ground, hospital services are left vulnerable. As the public is more tight-pursed with its discretionary income, elective services are cut back and people postpone procedures. These elective procedures include knee surgeries, laser eye corrective surgery, botox injections, breast implants and even dental work. In addition, people cut back on over-the-counter medications. While coping with the housing crisis, it is understandable that people might choose to file their mortgage payments over their health insurance payments to avoid the possibility of losing their home.

In an interview with BusinessWeek, Paul Keckley, executive director of the Deloitte Center for Health Solutions, predicted three likely impacts from this economic downturn. Primary and preventive care will be put off, people with high deductibles will delay the payments on the care they receive, and there will be an increase in the number of bankruptcies caused by medical debt. As revenue decreases, cutting staff will not be an option with the current nurse and health worker shortage.

Compared to the 1990-1991 recession, the current economic state is unique in that it coincides with a presidential election where healthcare has become a major issue. In 1993-1994 Hillary Clinton raised the healthcare platform, but the public did not like the answers it received and America was not ready for a major change. The key to healthcare reform is financial incentive and the belief that change will have a positive outcome. The economy has created an atmosphere where people are willing to believe change might bring more good than harm.

By exposing the vulnerability of American healthcare through its dependence on employment, the recession might be the best thing that could happen for the healthcare reform movement. With the insecurity caused by the recession, more people are willing to take the chance of supporting change. Rather than listening to the Harry and Louise commercials of the early 90s saying “There has to be a better way”, people today are saying, “Find that better way”. No doubt reform will require strong support from the public, president and Congress, but is the financial incentive of the recession perhaps the biggest supporting factor of them all?

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