Impact of unemployment on healthcare delivery

Healthcare

Research current rates of employment in various sectors of the economy. Examine the impact of increasing unemployment rates on the healthcare delivery system. What utilization trends might one expect to see in times of higher-than-average unemployment rates? What financial trends could one expect to see in times of high unemployment?

In the United States, the majority of citizens obtain healthcare through their employers. When unemployment rates climb, particularly over a protracted period of time, fewer and fewer Americans have access to healthcare because they lose their health insurance. However, the need for healthcare does not go away. The nature of healthcare demand does change in response to market demand: unemployed workers lacking healthcare are more apt to postpone preventative care and to only seek care when absolutely necessary. This can increase the strain upon emergency rooms and other acute care facilities.

Over the long-term, having a large population of uninsured workers can increase the strains upon the industry because of the worsening health of the citizenry. The old cliche that a 'once of prevention is worth a pound of cure' is particularly true of healthcare. Of course, when the economic level of workers falls extremely low, workers will also turn to Medicaid and other government assistant programs to enable themselves to obtain basic care. Regardless of whether the workers are eligible, they will likely have to cut back on other parts of their budget, including food, to obtain healthcare when it is necessary. There may also be a rise in medical bankruptcies.

Demand for healthcare during a recession will thus likely be lower -- people are less apt to seek out less-than-absolutely necessary medications and treatments. Still, they cannot entirely forego care at all. In contrast, during times of higher-than-average employment, more workers are likely to have healthcare. Previously unemployed workers may seek out medical care for complaints of long standing that they were unable to treat beforehand, because they did not have insurance. Workers are more apt to seek out treatment because they are less concerned about paying high co-pays. The 'worried well' who might otherwise forego certain treatments during times of economic difficulties are likely to be more apt to seek out additional treatments for their health complaints to enhance rather than merely prolong their lives.

From a supply-and-demand point-of-view, healthcare benefits are an additional benefit for workers that incentivizes them to work (Jacobs & Rapoport 2002: 256). During times of labor scarcity, workers have less of an incentive to take low-paying jobs, and employers have more of an incentive to provide benefits, to attract a higher-quality workforce. During times of high unemployment, workers are more desperate for jobs and will accept work at lower wages and lower benefits. But over a long duration of time, poor health status can actually result in higher rates of unemployment and lower wages, as conditions become more chronic and impede a worker's ability to labor: for example, 64% of males with diabetes and 40% of women with diabetes between the ages of 50 and 60 were employed; versus 82% of males and 60% of female without diabetes (Jacobs & Rapoport 2002: 259). Diabetes is a condition often associated with the working poor and very poor, and if the disease goes unmanaged it can become more chronic and impede the ability of workers to obtain both labor and benefits.