UNEMPLOYMENT AND HEALTH OUTCOMES: MEDICARE'S IMPACT ON THE US HEALTHCARE INDUSTRY

Purpose: Recessions are characterized by increased morbidity and mortality, reduced access to private health insurance and strain on public health insurers.  This study sought to evaluate the effect of unemployment on health outcomes, Medicare and overall healthcare spending, and the US healthcare industry.

Method: Data were collected for 50 states and DC from 1999-2009.  Unemployment, healthcare facility and occupational employment data were obtained from the Bureau of Labor Statistics.  Mortality and morbidity data were collected from the Center for Disease Control and Prevention.  Healthcare spending data were derived from the Centers for Medicare and Medicaid Services.  State fixed effects regressions were performed to examine the relationship between unemployment, Medicare and overall healthcare spending, and health outcomes (i.e. morbidity and mortality).  Regressions were also performed to model the association between Medicare and overall healthcare spending and healthcare facility and occupational employment.  Medicare models controlled for each state’s elderly population rate.  All statistical tests used a two-sided α significance level of p<.05.  Statistical analyses were performed with STATA.

Result: Unemployment was associated with declining self-reported health status and increased mortality rates for males (p<.01) and females (p<.001) aged 16-64 years old.  Further, as the economy contracts, Medicare’s share of state overall healthcare spending increased (p<.001) while all other state healthcare spending declined (p<.001).  An increase in Medicare’s share of state overall healthcare spending would positively affect statewide employment at general medical and surgical hospitals, outpatient physician offices and home health agencies (p<.001). Further, an increase in Medicare’s share of state overall healthcare spending would also increase statewide employment of registered nurses, home health aides, pharmacy techs, and physician assistants per 100,000 (p<.001), while it would negatively affect employment of internists and surgeons (p<.01).  To the contrary, as all other state healthcare spending increased, statewide employment of registered nurses, home health aides, and pharmacy techs decreased (p<.001), while employment of primary care physicians, internists, and surgeons increased (p<.05).

Conclusion: Unemployment is associated with increased morbidity and mortality.  Recessions are also associated with increased Medicare spending as a share of state overall healthcare spending, with statistically significant impacts on statewide healthcare facility and occupational employment.  During economic contractions, imbalanced numbers of healthcare providers might also lead to increasing morbidity and mortality rates for working age individuals.