Americans Avoiding Doctors In Weak Economy, Health Insurers Say

NEW YORK (Lewis Krauskopf) - Americans' use of medical services has not yet rebounded during the weak economy, health insurers say, in a trend that keeps the companies' costs down and could bolster their profits further this year.

Low healthcare utilization was a major reason behind the health insurers posting first-quarter profits well above analyst forecasts earlier this year.

The companies have been factoring increases into their pricing for their plans, but executives at an investor conference this week said utilization continued to stay low.

"Medical costs have not come back to trend levels we anticipated," UnitedHealth Group Inc CEO Stephen Hemsley told the conference, held by Sanford Bernstein.

Hemsley, whose company is the largest U.S. health insurer by market value, said UnitedHealth continued to believe that medical cost trends will return "to more normal levels."

"But to date whether it's driven by economic trends or whatever, the medical costs continue to trend to be more moderate," Hemsley said.

Since the economic downturn, Humana Inc CEO Mike McCallister said, "utilization dropped a little bit and it has actually stayed there."

Historically, McCallister said, some health insurers have failed to anticipate a rebound in medical costs, and priced plans too low -- hurting results and investor confidence.

"The utilization is still relatively softer than we would have expected, no one knows when and if it is going to come back," McCallister said. "We're basically assuming that it's coming back because we're not going to miss that uptick."

Some analysts have suggested that the lower-than-expected utilization is a more fundamental change rather than a fleeting one. Due to structural changes in healthcare plans over the years, such as higher co-pays and other fees, consumers have steadily borne more of the healthcare costs.

"You can argue whether this economic situation we're in is long term and is going to have long-term effects and whether it has fundamentally changed something," McCallister said. "I don't know. I'm not an economist."

Jay Gellert, CEO of Health Net Inc, which operates plans in the Western United States, said the extended downturn, and its associated job losses, makes this situation more unusual.

"Typically, when people come back to work they then use health care services," Gellert said. "But in California if you're at 11.5 percent unemployment, I'm not sure that's the time you think about getting off your job and doing elective procedures."

"And we're a long ways at least now it seems, from a single-digit unemployment in California, from sub-7 in the U.S., and so I think we may see a longer period of depressed utilization," Gellert said.

However, Gellert said, "there's always risk on our side that we misjudge utilization."

"Once you miss it, you're in big trouble," he said.

(Reporting by Lewis Krauskopf; Editing by Gary Hill)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[Reg Corleonis]

10:44 AM on 06/07/2011

I suspect that staying away from doctors has resulted in a surprising and unintended increase in the general level of health.

[SitandStay]

06:38 PM on 06/06/2011

The Republicans want the people that can't pay in these economic conditions to get off the balance sheet so their stock with the healthcare insurers will appreciate EVEN MORE!

[demilieu]

05:57 PM on 06/06/2011

All of our primary care doctors will end up being from foreign, non-English speaking countries, Pakistan, India, etc. All the lucrative specialty residencies are basically reserved for grads from American and English speaking countries...Canada, UK, etc.

[paleoimage]

02:50 PM on 06/06/2011

as long as the US continues to manage healthcare in a "for profit" insurance based manner, the problems will only increase and our slide into third world status will be complete.

[lletaa]

11:44 AM on 06/06/2011

At the very least people have healthcare in single payer countries while unemployed or in recession. Not so in the good ol' USA with our for profit complicated mess of greedy insurance companies. I don't know how far you can push people while some live in fairytale splendor but this system we have is sucking the life and money out of this country.

[AZreb]

10:05 AM on 06/06/2011

What a mess - health insurance companies making more money due to people not being able to afford the co-pays and extras - you know, meds and those other pesky things doctors recommend.

Then we have government telling us to "eat healthy" when food prices are on the rise - never mind what will happen when the thousands of acres of ffarmland along the Mississippi cannot be used for a few years and the jobless and poor are trying to make food stamps last for a month and have to make the choice between "healthy" foods and "filling" foods.

Again - what a mess.

[SitandStay]

02:30 AM on 06/06/2011

Yeah, I wonder if the insurance companies signing the doctors to contracts ever had a plan B when the patients stopped showing up, to help the doctors maintain their profits. Guess it is a losing situation for the Health insurers and the physicians. No sympathy for either. My step-father, a graduate of Emory University School of Medicine and a general practitioner, had his own practice. He drove a Plymouth Reliant, gardened, played poker, raised German Shepherds and enjoyed life without an emptiness that required him to salivate over running tests that were not necessary. He was well respected in his community, something that does not seem of value these days.

[demilieu]

05:53 PM on 06/06/2011

40 or more years ago, consolation was often about the only thing a doctor could offer a patient.

[SitandStay]

06:35 PM on 06/06/2011

And yet we are told our life expectancy has declined. Unfortunately, you're talking to someone whose grandmother was "extinguished" before her cancer got her because of cobalt radiation treatment, my mother passed thanks to tests performed by a resident unsupervised, etc. I recently went to a orthopedic surgeon that I had seen before. When I told him the prescription I was taking, he said, "You shouldn't be taking that". It was a prescription prescribed a couple of months before by another orthopedic surgeon that graduated Magna Cum Laude, and for the same condition.
Thanks. I'll take consolation....which by the way, they don't give. They just snap to the prognosis and depart the room.

[SitandStay]

02:21 AM on 06/06/2011

And we will be healthier for it....I have an aversion to doctors and their expensive tests, which they can never tell me beforehand how much it will cost!!!!!!!! What's wrong with THAT picture!

[Ruyur]

07:42 PM on 06/06/2011

That picture looks like a good representation of the medical insurance industry: hiding behind a mask with a hand around the patient's throat.

[fortressfountain]

09:44 AM on 06/05/2011

The problem is not the Drs. who should not have to work harder for less. The problem is most big corps like hospitals are run by ceos who have to make millions and the insurance companies who have to make millions.
People pay more than ever for insurance and also have to pay more than ever for out of pocket.
Who gets the money-rates keep going up.
The lazy ceos and others on the sidelines who want to make money doing nothing.

[Indigo1941]

07:30 AM on 06/05/2011

Austerity at work guarantees poor health care and future health problems. There's that Republican Plan again, get sick, die young.

[politicky]

08:28 PM on 06/04/2011

I am incredibly lucky to have insurance that is low cost and even luckier to have health providers that accept the low percentage of the billing that the insurance company actually pays.

Medical bills prompt more than 60 percent of U.S. bankruptcies
June 05, 2009|
By Theresa Tamkins
"...Overall, three-quarters of the people with a medically-related bankruptcy had health insurance, they say..."

http://articles.cnn.com/2009-06-05/health/bankruptcy.medical.bills_1_medical-bills-bankruptcies-health-insurance?_s=PM:HEALTH

[whoknew42]

07:45 PM on 06/04/2011

This is a no-brainer

No job - no money

No money - no insurance

No insurance - no doctor

Long gone are the days when doctors would see patients based on need. I remember when emergency rooms first started asking for insurance cards. Before, they just asked for basic information and would treat you.

But we live in an age where emergency rooms will - and have - turned people away that are not insured, especially in urban areas.

I'm not saying doctors don't deserve to get paid, but it seems that the only reason people get into the medical field anymore is to make money, and not to help people. Our health system is fast becoming like third world countries, where the poor seek medical attention from poorly staffed, poorly trained facilities - if one is available, and only the wealthy can afford state-of-the-art, life-saving treatments.

I know families that never send their children to the doctor because they can't afford it. They just drug the kid with pain killers and hope whatever they have goes away. The tragedy is that Americans have to do that in this country. How can we claim to be the best country in the world when we can't even take care of our sick and needy?

[wiscdecathlon]

02:10 AM on 06/05/2011

Since 1986, emergency rooms and consultants have been required to provide emergency care regardless of the patients' ability to pay (EMTALA). Charity care in the emergency setting is an unfunded federal mandate, and the average ER doc provides 138,000 dollars of charity care a year. There definitely is an access problem, but it results from ERs closing when they can't pay the bills, treating too few patients who can actually pay. ERs treat everyone, and are at risk for insolvency when the rate of uninsured or low reimbursement federal programs(Medicaid) usage is high. Increasing funding for Medicaid and reducing the uninsured section of our society would increase access to care.

[JackWhistle]

10:08 PM on 06/05/2011

Then why is it that the uninsured are twice as likely to die in the emergency room as someone who is?
The reality somewhat.. negates your argument.

[Ruyur]

07:49 PM on 06/06/2011

"The immediate goal is to make sure there are more people on private insurance plans. I mean, people have access to health care in America," he said. "After all, you just go to an emergency room."
G W Bush 2007

http://www.washingtonpost.com/wp-dyn/content/blog/2007/07/11/BL2007071101146_pf.html

[rkimball]

05:48 PM on 06/04/2011

Even more disturbing...we had a mass destitute funeral service this week for people unable to afford a burial for their loved ones.

[Cherie Lyon]

12:53 PM on 06/06/2011

That is horrible. I can't imagine what that must have been like.

[rdk70816]

05:30 PM on 06/04/2011

The medical community is raising their prices to accommodate their life styles and lack of business. Surely we can not expect them to suffer like the rest of us.

[loki]

04:14 AM on 06/05/2011

nah, they are taking their cues from the electric, gas , water, city and state property taxes, the ivy greed capitalist of the oil, telecommunications, and the food corporations. When the economy is in the tank, Cut the Jobs

[pattiepcomedy]

02:52 PM on 06/04/2011

'in a trend that keeps the companies' costs down and could bolster their profits further this year.'

Those fees that we are paying are supposed to be put in an account for when we do get sick and need our health insurance ... just because we're not using the money we pay into health insurance right now shouldn't mean that amount becomes an insurance company profit.

[frank day]

03:43 PM on 06/04/2011

Keep dreaming.