Is the Recession Killing Granny?

One of the points I made as a discussant at the American Society of Health Economists conference this year is that the factors driving health care utilization and spending among Medicare beneficiaries are likely different from those for the non-elderly. Yet few analysts of health care trends comment on or exploit those differences. (For one thing, prices are a likely driver of spending growth in the commercial market, but not for the more-price-regulated Medicare.)

Related to this, I was prepared to blog on the new paper “Recessions and seniors’ health, health behaviors, and healthcare use: Analysis of the Medicare Current Beneficiary Survey,” by Melissa McInerney, Jennifer M. Mellor (JHE, 2012). However, why reinvent the wheel? Jason Shafrin posted on it yesterday, so go read him. The upshot is that recessions affect mortality of and utilization by the non-elderly and the elderly differently. They’re good for health of the non-elderly but bad for the elderly. Why?

Nobody knows for sure, but we can speculate. The authors point to a shift by providers to caring for more Medicare patients when non-Medicare patients pull back on their care. That actually makes a lot of sense, and it can happen without much intention. If a doctor can only see so many patients in a year (e.g., only offer so many appointments), then as one class of patients demands fewer appointments (working-age individuals with less income or more income uncertainty in a recession), another class that has almost insatiable demand (Medicare beneficiaries) will have an easier time finding an appointment. On average, they’ll see more doctors and have more procedures than they otherwise would. Instead of waiting four weeks between visits, they’ll wait three. Every time they want to see a doctor or are amenable to getting a recommended test, they have an easier time of it. Visit density for them goes up, and maybe that extra care isn’t doing them any favors.

We can probably speculate more, but I’ll stop here.

[Cross-posted at The Incidental Economist]

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Austin Frakt

Austin Frakt is a health economist and an assistant professor at Boston University's School of Medicine and School of Public Health. He blogs at The Incidental Economist.