The Healthcare Industry – Recession Proof?

I have read articles and heard talk that the healthcare industry is the only safe haven when it comes to a recession. I am guilty of believing this to be true until I did a little research of my own. If you think about it, it seems plausible that it is indeed recession proof. Just because money gets tight it doesn’t mean that people stop getting sick, needing routine boosters, pediatric checkups, having babies, getting cavities taken care of or having much needed surgery. So why did I change my position? After reading many articles to both claims I thought about it for a while and came to the conclusion that nothing is recession proof. Here are some thoughts as to why it is just as likely to be hit during a recession:

1. When money gets tight the first thing to go are “extras” and while a life saving heart surgery is not sacrificed the elective surgeries are. Cosmetic surgery is sure to get hit heavy with people putting off that much desired perky nose or pouty lip look until they are able to afford it.

2. With more people losing their jobs and healthcare coverage more families are applying for Medicaid and other government assisted health care options. While this is a great help to those in need, I have read a number of articles from many sources that reflect the same assertion: public healthcare programs usually pay hospitals much less than the hospital has billed. There is no negotiation for fees like there are with insurance companies. The government sets the fee they will pay – no negotiation - and the monies paid, in many cases, do not cover the actual cost.

3. For those who still have healthcare through their employer they may now have to pay higher deductibles and co-pays as companies try to save money by sharing the cost for healthcare. This may lead to the delay of routine care. People may skip a check up or dental cleaning in order to pay for groceries.

To wrap things up, while there is still a need for healthcare when times are tough, the healthcare industry is not recession proof. There is definitely a decline in routine and elective care as well as a loss that will be reflected on the books of many hospitals and doctor offices due to non negotiated payments that do not cover operating expenses. Without income generated to pay operating expenses things will need to be cut. It’s just the way it is.