Ringing in a New Year in Health Care, For Whom the Bell Tolls?

Jane Sarasohn Kahn of The Health Care Blog has offered up some interesting, if not dismal, prognostications for 2009. Although issuing the caveat that “there are too many uncertainties that preclude us from doing a straight-line forecast for 2009, especially in health and health care,” she offers some insights based upon the present macroeconomic backdrop. They are worth noting, and a few may be found here below.

She asks us to take heed of the following:

Keep in mind the Kaiser Family Foundation's metric on unemployment: an increase of 1% unemployment leads to 1.1 million uninsured, and 1 million more people added to Medicaid. This was the math that worked in 2007-8. The metric will probably change in 2009 as Governors struggle to balance budgets while providing medical services, education, and safe streets to citizens. The National Governors Association, and the individual state heads, have all warned that Governors will inevitably cut services in 2009 and into 2010 if tax receipts continue to decline.

According the U.S. Bureau of Labor Statistics, in November of 2007 the unemployment rate was 4.7%. For November of 2008 it was 6.7%. Regardless of the metric, the consequent health insurance math is less than reassuring.

As noted by Professor Frank Pasquale on this blog last week, the “Governors' struggle” has already commenced. The Washington Post having reported that regarding Medicaid

Already, 19 states -- including Maryland and Virginia -- and the District of Columbia have lowered payments to hospitals and nursing homes, eliminated coverage for some treatments, and forced some recipients out of the insurance program completely.

As such, this line of forecast may be a bit “straighter” than others. The cuts and further prospective cuts in state funding are, as Frank Pasquale noted, “one more sad example of the procyclical nature of federalism here--states have less tax revenue during recessions, when need is greatest. No one should be surprised if more and more of the jobless uninsured, denied even basic dental care due to such cuts, fall into a "death spiral" of unemployment, disfiguring ailments, and a tendency to be underemployed due to such ailments.”

Ms. Sarosahn Kahn also makes a very important point about medical infrastructure:

Hospitals' credit woes will continue to constrain providers' operations. Reports from all of the major credit rating agencies, including Standard & Poors, Fitch, Best and Moody's, have all negatively opined about the state of hospital finance for 2009. Fitch and Moody's downgraded the nonprofit hospital sector to negative. The American Hospital Association's survey in November 2008 found that 1 in 2 hospitals was considering or actually postponing capital expenditures. This would include renovations, increasing capacity, and other capital programs. The cost of borrowing money has made it nigh impossible to find hospital financing for improvements.

This too would seem to qualify for “straight line” prognostication. Hospitals are closing, layoffs have ensued, and as we and A.P. noted earlier this week, industry consultants predict “More closings and mergers are on the way.”

The A.P further noted that

Hospitals, which employ 5 million people, are reporting that donations and investment returns are down, patient visits are flat and profitable diagnostic procedures and elective surgeries are declining as people with inadequate insurance delay care. But those patients are turning up later at ERs, seriously ill...

Ms. Kahn also points out that among the ill, prescriptions are not being filled.

Manhattan Research found that 40 million Americans didn't fill prescriptions due to cost constraints by the fourth quarter of 2008. This number could increase in 2009, leading to worsening health outcomes. In particular, scripts for mental health conditions weren't filled as frequently as Rx's for other types of conditions.

All in all, the equation itself would seem to not require Daniel; if left unchecked, only the particulars of the miserable sum remain unknown.

There are a few bright spots in this analysis, however, Ms. Kahn points out that

Clinical effectiveness is becoming part of the larger analysis for spending scarce resources. There's no better time than a recession to bring this concept into play on a mass scale.

She's right, when times are tough, people have a tendency to want specifics when they get the bill-- and to know that what they paid for worked.

And there is this larger point,

Policymakers and influentials have come to understand that health is integrated into the larger macroeconomy. It is a welcome sign that those who will be at the helm of the new economy on Team Obama recognize the intimate relationship between health and the American economy. Peter Orszag, just out of the Congressional Budget Office and soon to lead the Office of Management and Budget, has spoken publicly about health care costs and the GDP over the past eighteen months. His sober and smart observations give me comfort insofar as he will be playing a key role in reshaping the broken U.S. Economy.

As we ring in the New Year and begin to contemplate the inter-relatedness of the macro-economy and commence what may well be the “fall into a 'death spiral' of unemployment, disfiguring ailments, and a tendency to be underemployed due to such ailments,” it might be worth a moment to consider the often sudden and unexpected nature of both job loss and catastrophic illness-- and John Donne.

The bell which John Donne refers to in his most famous quote is "the passing bell," tolled by the Church for those who are dying. As Donne lay very ill in his bed and heard this bell being tolled, he wondered if he were, in fact, sicker than he thought. And that perhaps that bell was being rung for him personally. He came to realize, however, that whether that was the case or not was largely irrelevant because

"No man is an island, entire of itself; every man is a piece of the continent, a part of the main. If a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as if a manor of thy friend’s or of thine own were. Any man’s death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee."