Posts Tagged ‘recession’
Tuesday, February 2nd, 2010
Americans spent an average of $7,681 per person on healthcare during 2008, just a 3.5 percent rise over the previous year - the slowest growth rate in 48 years. According to a report issued by the Department of Health and Human Services, healthcare spending totaled $2.3 trillion in 2008 and accounted for 16.2 percent of the GDP.
The culprit is the recession, which achieved what a generation of public officials attempted without success. Federal officials said the slowdown in health spending resulted from the soft economy, people delaying elective procedures, for example, and did not cite any factors that will alter the long-term outlook for continued increases as baby boomers age and physicians rely more on new technologies to treat patients.
According to Micah Hartman, a government statistician who contributed to the report, federal spending for health services and supplies grew 10.4 percent in 2008 and equaled 36 percent of federal receipts, up from 28 percent in 2007. “In 2008, federal Medicaid spending increased 8.4 percent - the highest rate of growth since 2003 - while state spending declined by 0.1 percent, the first decline in these expenditures in program history,” Hartman said. “Spending for healthcare by private businesses grew just 1.2 percent in 2008, in part because of a drop in the proportion of employer-sponsored insurance paid by employers. Private business’ health spending remained relatively flat as a share of compensation at 7.9 percent.”
In other findings, the report noted that “private health insurance premiums and benefits grew in 2008 at their slowest rate since 1967, 3.1 percent and 3.9 percent respectively.” The slowdown reflects a drop in the number of Americans with private health insurance. That fell to 195.4 million in 2008, compared with 196.4 percent in 2007.
Tags: GDP, Healthcare, healthcare reform legislation, healthcare spending, Medicaid, Medicare, Micah Hartman, President Barack Obama, recession
Posted in Healthcare | No Comments »
Tuesday, June 16th, 2009
The recession and its impact on investment portfolios, as well as declining Medicare and Medicaid reimbursements, are making physicians rethink their retirement dates.
Some physicians have seen their stock markets portfolios fall by as much as 50 percent. In today’s economy, selling practices might not bring the anticipated profit, according to William Jessee, M.D., president and CEO of the Medical Group Management Association. “I look at my 401(k) and think ‘Okay, I just turned 62, and 70 is starting to look like a better retirement field,’” Dr. Jessee said.
A 2007 survey of 1,200 physicians found that 48 percent aged 50 to 65 were planning to retire, find non-clinical jobs, work part-time, close their practices to new patients and/or substantially reduce their patient load. Since the survey was conducted, Americans’ retirement funds have lost as much as $2 trillion.
“It has not been entertaining watching all my hard-earned money disappear,” according to Jeffrey Sankoff, 41, a Denver physician. “But I’ve got about 10 to 15 years before I need to worry because my 401(k) will just sit there and eventually recover and grow. Those physicians closer to retirement age - hopefully their portfolio is balanced in such as way that this catastrophe won’t have as big of an impact as it’s had on me.”
The silver lining in these deferred retirements is that they could prevent a physician shortage, a result of medical schools capping their enrollments at 16,000 students per year because they believed that managed care would create a glut. It is estimated the shortage could be as much as 250,000 physicians in the next 10 years.
Tags: 401 K, 401K, American, economy, investment portfolio, Medicaid, Medical Group Management Association, medical school, Medicare, non-clinical jobs, physician shortage, physicians, profit, recession, reimbursements, retirement, retirement funds, stock market, stock market portfolio
Posted in Economics, Healthcare, Hospital Systems | No Comments »
Tuesday, May 26th, 2009
It’s not easy being a physician in these hard times. Insurance reimbursements have been falling for some time, a situation that is unlikely to change for the better very soon. Thanks to the recession and the growing number of people who are losing healthcare insurance along with their jobs, patient visits to physicians have leveled off and even declined.
Maywood, IL-based Loyola University Health Center is taking a proactive approach to this dilemma by extending the hours its outpatient clinics in Chicago’s south and west suburbs are open for business. Loyola’s move to increase patient accessibility is paying off. In March, clinic visits rose 11 percent to 5,332 after 250 physicians opted to work longer hours. Clinic visits are up an average of 1,100 each week.
“People really don’t want to leave their jobs and come to our offices (during their work hours)”, said Dr. Paul Whelton, chief executive of Loyola University Health System, parent of the medical center. “Physicians are making themselves more available. We need to be more user-friendly. Our volumes are up and we are gaining market share.” Some clinics even added Saturday hours for their patients’ convenience.
According to the American Academy of Family Physicians, Loyola’s extended clinic hours are part of a national trend. Of members surveyed, 42.4 percent of physicians are providing extended office hours.
Tags: American Academy of Family Physicians, Chicago south suburbs, Chicago west suburbs, clinic, dilemma, employment, extended office hours, extending hours, healthcare insurance, insurance reimbursements, jobs, Loyola, Loyola University Health Center, market share, Maywood Illinois, outpatient, patient, patient accessibility, physician, recession, user-friendly
Posted in Healthcare, Hospital Systems | No Comments »
Wednesday, May 6th, 2009
Even as they struggle through the recession, companies are proving how highly they value their employees by offering financial incentives to make sure they stay healthy. A January survey of 489 large businesses by the National Business Group of Health (NBGH) found that 58 percent offer lifestyle improvement programs, an impressive uptick over the 43 percent reported during 2007.
Of responding companies, 58 percent offer health coaches, 52 percent have weight management programs and 80 percent sponsor health risk appraisals. There’s a good reason why companies offer these financial incentives - they are effective. “The cost of healthcare continues to become so high,” said Scott Keyes, senior group and healthcare consultant for Watson Wyatt, which conducted the survey. “People are looking at long-term solutions. We realize that one long-term solution is to keep our population healthier. We are not seeing people pull away from that.”
Additionally, according to Dr. David Hunnicutt, President of the Wellness Council of America, as employers offer personal health assessments or health risk appraisals, it is an indication that employers want to become engaged in the health and well-being of their employees. It becomes a “win-win” situation for the employee and the employer.
Financial incentives in the $51 to $100 range encourage participation in smoking cessation and weight management programs, and motivate employees to undergo biometric screenings. Not surprisingly, the level of participation increases with the size of the incentive. Typically, incentives are awarded in the form of gift cards or reduced health insurance premiums.
Tags: biometric screenings, financial incentives, health coaches, health risk, Healthcare, healthcare consultant, healthy, National Business Group of Health, NBGH, recession, reduced health insurance, Watson Wyatt, weight management programs, Wellness Council of America
Posted in Economics, Healthcare, Hospital Systems | No Comments »
Tuesday, April 7th, 2009
If Benjamin Braddock graduated from
college today, the clueless Mr. Robinson would likely tell him to go into healthcare - not plastics — as he advised the befuddled young man in the classic 1967 movie “The Graduate”.
Although the economy is shedding jobs at an alarming rate, the healthcare industry added 371,600 jobs during 2008. That momentum has not slowed, despite the fiscal crisis and recession. While the economy lost 1.9 million jobs during the fourth quarter of 2008, healthcare added 93,200 jobs. Hospitals hired 11,900 new workers in December, bringing the nation’s total hospital workforce up to approximately 4.71 million. Physicians’ offices hired 5,600 more staff, bringing that workforce up to nearly 2.3 million employees.
Ambulatory-care centers saw 1,100 jobs vanish during December, a 0.2 percent loss. Still, that fast-growing sector grew to 521,700 jobs during all of 2008, a 1.7 percent increase compared with the previous year.
“The only major private industry sector that continued to add a significant number of jobs was healthcare”, notes Keith Hall, commissioner of the Bureau of Labor Statistics.
According to a new Ernst & Young study on business risk, the global war for talent will be top of the mind for CEOs. Nowhere will this be more evident than in healthcare. There remains a chronic shortage of surgeons and family-practice doctors. Part of this is because U.S. medical schools held enrollment to 16,000 students a year from 1980 to 2005, fearing a glut of doctors under managed care. Perhaps the hiring by hospitals is a correction to 25 years of no-growth within certain specialties and the continuing dearth of nurses.
Tags: ambulatory-care centers, Benjamin Braddock, business risk, chronic shortage, economy, family-practice doctors, fiscal crisis, Healthcare, healthcare industry, hospitals, jobs, no-growth, nurses, physicians, recession, surgeons, US medical schools
Posted in Healthcare | No Comments »
Monday, April 6th, 2009
The recession has put the health care industry’s importance to our economy in sharp relief. It accounted for 17 percent of GDP and added 371,600 jobs last year. Even when the economy lost 651,000 jobs during February, healthcare added 27,000 new positions.
In terms of the construction of new facilities during 2009, healthcare development is expected to fall by five or eight percent. Yet, the drivers that historically have made the healthcare market so strong - obsolescence, new technologies and demographics - are still very much in place.
The collapse of the $330 billion auction rate securities market which let healthcare systems borrow money long term while paying short-term interest rates - cut off a principal source of capital for new development. Hospitals have investment portfolios tied to Wall Street, another source of capital that is being cut off. Endowments are drying up as even the most dependable philanthropists see their fortunes shrink. Access to long-term debt vehicles, such as variable-rate demand bonds backed by letters of credit, is available only to healthcare systems that are A-rated or even better. Even when a provider has superior credit, interest rates to borrow money may be as high as six to 6.5 percent. For some hospitals and healthcare providers, the cost of credit - if they can get it - is too expensive.
To fill the gap, healthcare providers are considering private sources that have the capital necessary to finance projects. The upside of private capital is that it can be committed over the long term to help hospitals and providers fulfill their strategic expansion plans without the same balance sheet implications - something hospitals are focused on in order to maintain a good standing with the ratings agencies.
In a 0 percent federal rate environment when 30-year fixed-rate mortgages have come down to 5.29 percent, capital is competitive with traditional hospital financing, compared with other cycles.
Tags: auction rate securities market, balance sheet, credit, economy, GDP, health care industry, Healthcare, healthcare development, hospitals, interest rates, jobs, mortgages, new technologies, ong-term debt vehicles, philanthropists, private sources, recession, traditional hospital financing, variable-rate demand bonds, Wall Street
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