Is a recession on the horizon? According to Alex Bryson, Professor of Quantitative Social Science at University College London and David Blanchflower, Professor of Economics at Dartmouth College, the answer is “yes.” In their article “Expectations data indicate the US is entering recession about now,” for Vox EU, they point to a number of data points that were missed in 2007 that were “an early indicator of recession” that have reappeared in 2021.  

Economics is not magic, so, despite the prediction, no one can say for certain what will happen. One thing that IS certain is that recessions have large impacts on every aspect of American life, including healthcare. Read on for ANA-Illinois’ analysis of what happens to healthcare in America during a recession.

General Population

While some economists believe that healthcare is recession proof, the data is mixed. According to this article published by The Hill, healthcare spending grew at a much smaller rate in 2008, the year that the last recession began, than it did in 2007. The article states:

“Household spending on healthcare grew by 4.3 percent in 2008 compared to 5.9 percent in 2007…. Likewise, patients’ out-of-pocket spending on healthcare grew much more slowly: 2.8 percent in 2008, down from 6 percent in 2007. ‘In 2008, people may have foregone some medical treatment — particularly those who lost health insurance as a result of unemployment,’ the report [from the Office of the Actuary at the Centers for Medicare and Medicaid Services] says.

The fact that this share of Americans would skip medical care during a recession is an alarming one. CNBC recently reported that, last year, 22% of Americans avoided medical care and 29% did not take their prescriptions as prescribed, both because of cost. If a recession is on the horizon, this percentage, which is already high, would likely increase.

Healthcare Providers

In “How does a Recession Impact Healthcare Providers?” published by the website Advanced Billing and Consulting Services, the author breaks down how the last recession impacted healthcare providers. Some of the results were surprising.

First, the 2008 recession actually reduced the shortage of healthcare workers. The article speculates that “Part of this was because some retired nurses rejoined the workforce. Other nurses delayed retirement and some part-time nurses sought full-time work. All of these factors would work to alleviate the nursing shortage.”

Second, as can be determined by a recession’s effect on the general population, there is less demand for certain types of services. As result, healthcare providers end up making less money (or the amount of money brought in increases by a smaller percentage than in the previous year). Accentuating this, the article goes on to state that “Hospitals and health systems may also suffer from reductions in charitable giving and less funding from local, state and/or federal government.”

Healthcare During a Recession – A Complex Picture

The relationship between healthcare and economic recession is not clear. What is clear is that working class Americans suffer during a recession – often deciding to forego medical treatment that they need. ANA-Illinois believes that no-one should have to skip medical treatment because of its cost and strongly advocates that affordable care be available to every American — whether another recession is on the horizon or not.