Researchers find link between higher Medicare spending and joblessness

November 19, 2012 by Suzanne Seurattan, The College of William & Mary

(Medical Xpress)—National economic events, like the Great Recession of 2007-09, can have a far-reaching ripple effect through the economy. In a recent study, researchers at the College of William & Mary found that healthcare is not immune. Their findings are featured in the November issue of Health Affairs.

In the study, researchers at the Schroeder Center for Health Policy linked increased , common in times of economic downturn, with rising .

The study, "State Unemployment in Recessions During 1991-2009 was Linked to Faster Growth in Medicare Spending," noted that "a one-percentage-point rise in the unemployment rate was associated with a $40 (0.7 percent) increase in Medicare spending per capita," or an increase of more than $9 billion among all Medicare beneficiaries between 2008 and 2010.

Researchers compared state-level unemployment rates against Medicare spending and usage over nearly two decades, from 1991-2009, and found that increased hospital spending and utilization among Medicare beneficiaries dominate the increases in Medicare per capita spending associated with higher unemployment.

Jennifer Mellor, Director of Schroeder Center for Health Policy and associate professor of economics at W&M, discusses healthcare reform in the United States.

Researchers Melissa McInerney and Jennifer Mellor note one explanation for increased Medicare spending during an economic downturn may be the willingness for healthcare providers to take-on Medicare patients.

"When someone loses a job, they also lose their employer-provided health insurance. Without insurance and without wage income to cover medical care expenses, the unemployed may forego healthcare," said McInerney, assistant professor of economics.

The loss of these privately insured patients from the workforce may leave physicians with more room in their schedule to treat Medicare patients.

"In related research, we found that as state unemployment rates rise, physicians report increased willingness to accept new Medicare patients," she added.

So what happens when the economy rights itself?

"There's concern that one type of patient may be substituted for another," said Mellor, director of the Schroeder Center for Health Policy and the Margaret L. Hamilton Professor of Economics.

The researchers warn that if the pattern also holds as the improves, then when unemployment rates drop, and privately insured patients return, providers may pull back their services to Medicare patients.

"When privately-insured patients return to the marketplace, there is the potential that could get squeezed out if the healthcare system is at full capacity," Mellor added.

Explore further: Medicare spending linked to longer life, better health in elderly

More information: content.healthaffairs.org/cont … /31/11/2464.abstract

Related Stories

Medicare spending linked to longer life, better health in elderly

May 23, 2011
In 2009, Medicare spending grew about 8 percent to over $502 billion and projections indicate growth at an average rate of nearly 6 percent per year through 2019. Powerful debates are under way in Washington on how to reduce ...

Research finds Medicare and private insurance spending similar throughout Texas

December 21, 2011
Variations in health care spending by Medicare and Blue Cross Blue Shield of Texas (BCBSTX) are similar throughout the state despite previous research, which found significant spending differences between the private and ...

New study: Elderly Medicare beneficiaries most satisfied with their health insurance

July 18, 2012
Elderly beneficiaries enrolled in Medicare plans are more satisfied with their health insurance, have better access to care, and are less likely to have problems paying medical bills than people who get insurance through ...

Recommended for you

Women run faster after taking newly developed supplement, study finds

January 19, 2018
A new study found that women who took a specially prepared blend of minerals and nutrients for a month saw their 3-mile run times drop by almost a minute.

Americans are getting more sleep

January 19, 2018
Although more than one in three Americans still don't get enough sleep, a new analysis shows first signs of success in the fight for more shut eye. According to data from 181,335 respondents aged 15 and older who participated ...

Wine is good for you—to a point

January 18, 2018
The Mediterranean diet has become synonymous with healthy eating, but there's one thing in it that stands out: It's cool to drink wine.

Sleep better, lose weight?

January 17, 2018
(HealthDay)—Sleeplessness could cost you when it's time to stand on your bathroom scale, a new British study suggests.

Who uses phone apps to track sleep habits? Mostly the healthy and wealthy in US

January 16, 2018
The profile of most Americans who use popular mobile phone apps that track sleep habits is that they are relatively affluent, claim to eat well, and say they are in good health, even if some of them tend to smoke.

Improvements in mortality rates are slowed by rise in obesity in the United States

January 15, 2018
With countless medical advances and efforts to curb smoking, one might expect that life expectancy in the United States would improve. Yet according to recent studies, there's been a reduction in the rate of improvement in ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.