Is a shortage of patients hurting hospitals?

Annals of an economic contraction: Rumors fly of revenue shortfalls attributed to a drastic decrease in sick people willing to pay for health care

Published February 3, 2009 11:15PM (EST)

I just returned from the dentist, where the secretary told me that a friend of hers, who works at a large health care organization based in Oakland, Calif., is worried that non-union employees are about to face significant benefit cuts and potential layoffs.

The reason? The organization is facing a drastic shortfall of patients -- people who either have become uninsured in recent months or feel otherwise unwilling to pay any out-of-pocket medical expenses that their insurance doesn't cover.

A quick news scan revealed no previously reported corroboration for this info-nugget, so readers are advised to treat it with care -- it's a third-hand anecdote of uncertain provenance. But it fits right in with a report from the dentist, who said "every other" one of his patients had recently been laid off or was close to someone who had hit economic hard times. And given that the job numbers for January, due to be released on Friday, are once again expected to be grim, it certainly wouldn't surprise me to learn that the story is true.

Regardless of its veracity, the scenario does provoke another way to think about the stimulus plan. Any government spending that can be quickly injected into the economy and saves or creates jobs is by definition stimulative. Government aid that reduces health care costs, right now, offers a good illustration. If, for example, the stimulus plan subsidizes COBRA payments for unemployed workers, those workers will be more willing to seek medical care, which in turn means hospitals and other health care organizations won't experience such drastic revenue shortfalls and be forced to lay off their own doctors and nurses and staff.

Who then join the ranks of the unemployed who can't afford health care. And so on.

UPDATE: The comments thread on this post provides oodles more anecdotal evidence from within the health care industry that support the theory of the vanishing patients.



By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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