As Economic Downturn Takes Toll
By VANESSA FUHRMANS
As the credit crunch threatens to throw the economy into a deep slump, Americans are already cutting back on health care, a sector once thought to be invulnerable to recession. Spending on everything from doctors' appointments to preventive tests to prescription drugs is under pressure.
The number of prescriptions filled in the U.S. fell 0.5% in the first quarter and a steeper 1.97% in the second, compared with the same periods in 2007 -- the first negative quarters in at least a decade, according to data from market researcher IMS Health. Despite an aging and growing U.S. population, the number of physician office visits also has been declining since the end of 2006. Between July 2007 and 2008, the most recent month for which data are available, visits fell 1.2%, according to IMS.
As consumers cut back, spending on everything from doctors' appointments to preventive tests to prescription drugs is under pressure.
In a survey by the National Association of Insurance Commissioners last month, 22% of 686 consumers said that economy-related woes were causing them to go to the doctor less often. About 11% said they've scaled back on prescription drugs to save money. Some of the areas being hit include hip and knee replacements, mammograms, and visits to the emergency room, according to a survey conducted by D2Hawkeye Inc., a Waltham, Mass., medical data analytics firm, on behalf of The Wall Street Journal.
Since sales at the Sebring, Fla.-area car dealership where Christopher Pye works have dwindled, so have the commissions that were 40% of his income in good times. Barely able to afford his $850 monthly mortgage and pay for groceries, he says something had to give: his two young sons' annual medical checkups.
"It's just a little too expensive right now," says Mr. Pye, 32 years old, who says he can't afford to have his family on the company health plan or to pay up front for the visits. This month, Mr. Pye is canceling his own insurance, hoping the $56 he'll save in weekly premiums will pay for the exams of his boys, ages 3 and 4, later.
Health-policy experts say that patients' short-term care cutbacks could lead to more medical problems and higher spending down the road. As more people forgo screenings or wait until minor medical problems blow up into serious complications, hospital and emergency-room admissions could eventually spike.
"Once you've had that heart attack and end up in the hospital, that's when the expensive stuff begins," says Dana Goldman, director of health economics at the Rand Corp., a nonprofit research institute in Santa Monica, Calif.
Health-care companies say the current economic slump's impact on demand for medical services has been surprisingly swift. Laboratory Corp., the country's second-largest clinical lab-testing company by sales after Quest Diagnostics Inc., says the number of blood tests and other types of lab work it does for uninsured customers fell 8% in the second quarter, compared with the 1% quarterly growth it usually sees.
The company's analysis of outside market data also shows that obstetrician-gynecologist visits, the sole source of preventive care for many women, dropped 6% in the first quarter compared with the same period last year.
 
"That says to me that people are just deferring care if it's not acute," says Laboratory Corp.'s chief executive, David King.
Speaking at an investor conference this month, Walgreen Co. Chief Executive Jeffrey Rein said the U.S. is experiencing the "tightest prescription market" in his 27-year career, as more cash-strapped patients skip their pills or take half doses. He said the company has looked at different ways to get people to fill prescriptions. For example, pharmacists are reaching out to patients through phone calls and emotional appeals such as, "Do they want to be around when their kids grow up, or their grandkids?" Mr. Rein said.
Pricey Blood Test
Marianne Falacienski of Pensacola, Fla., had health coverage through her husband's land-surveyor job until he was laid off in April last year. Her husband, Brian, has since bought a policy for himself and their 2-year-old daughter on the individual market, but the family couldn't afford to include Ms. Falacienski, who has a chronic inflammatory bowel disease called Crohn's. The premiums charged by insurers for health plans purchased by individuals with pre-existing conditions can be prohibitive.
Ms. Falacienski, 33, has been putting off a pricey blood test to monitor her Crohn's-related anemia, which if it worsens, can indicate bleeding in the intestines. She says she already owes more than $3,000 for a blood transfusion she needed in January -- the result, she says, of skipping the tests last year and thus failing to spot her worsening blood count in time.
"I'm just trying not to get sick again," she says. She found a receptionist job in July but won't be eligible for its health benefits until late fall.
A recent analysis of claims from 250,000 people in several dozen mid-Atlantic employer health plans suggests even people with coverage are cutting back on care. The study, conducted for The Wall Street Journal by research firm D2Hawkeye, found that a number of preventive or nonacute areas of care saw declines despite little change in benefits or employee cost-sharing. Knee replacements per 1,000 people fell 18.6% between March 2008 and March 2007, pap smears fell 6% and dispensed prescriptions for antidepressants dropped 29%, the D2Hawkeye analysis shows.
Jim King, a family physician in Selmer, Tenn., says patient visits at his practice this summer were down 10% to 15% compared with summers past, even though 90% of his patients have some form of insurance. A big problem, he says, is getting patients to come back for tests to check their diabetes or to act on referrals to specialists, many of whom are at least 40 miles away in Jackson, Tenn.
"It's hard to get people to follow up when they're having to decide between the gas bill, the electric bill or deciding to come in and see the doctor," Dr. King says.
Many insured Americans face much bigger out-of-pocket costs today than just a decade ago. The average family plan deductible at an employer last year ranged from $759 for health-maintenance organizations to $3,596 for a high-deductible plan with a savings-account option, according to the Kaiser Family Foundation. The cost of premiums to employees has nearly doubled to $3,281 a year since 2001.
People who buy health plans on their own often face even higher deductibles. Patricia Campbell of San Diego bought a $7,500 deductible plan after she took fewer freelance television production assignments to help care for her mother, who has Alzheimer's disease.
Her doctor has told her that the longer she waits to get a cataract in her left eye removed, the harder it will be. But she says she can't afford to pay for the surgery because she is still paying off her share of the costs of an appendectomy last year. "Since I don't work out of the home, it's not that crucial," she reasons. "And I can drive with one eye."
Gabrielle Kenna, 33, who suffers from debilitating rheumatoid arthritis, says she occasionally skips her weekly dose of methotrexate. The pills help with pain and inflammation, and require a $10 monthly co-pay. But Ms. Kenna says she has to balance that with the price of her main medication, a specialty drug called Remicade that costs her nearly $180 every six weeks. "When I'm not feeling so bad, I'll try to stretch [the methotrexate] out or wait until I have the money," she says.
That task is about to get tougher now that her job as a school social worker in Fort Wayne, Ind., has been cut to a part-time position. Beginning this month, she'll no longer have health benefits. To stay on the school district's plan for a temporary period under federal Consolidated Omnibus Budget Reconciliation Act, or Cobra, rules, she'll have to pay $570 a month in premiums.
Her mother, Edith Kenna, says she has been skipping her osteoporosis drug every other week and stopped taking her antidepressant, each of which require a $40 monthly co-pay, to help pay for her daughter's treatments. But, she worries about the day her daughter's Cobra benefits run out since Remicade can cost more than $12,000 a year.
Hitting the Coverage Gap
Medicare beneficiaries on fixed incomes say higher energy and food prices are making it tougher for them to pay for drugs as well, even those who have the government program's drug benefit. Some, like Joan Stroup of Butte, Mont., are starting to hit the drug plan's coverage gap, which is $3,215 this year. The gap in 2008 begins after beneficiaries and their plans pay $2,510 in drug costs, at which point plans aren't required to pay benefits until spending reaches $5,725. Then benefits kick in again.
For Ms. Stroup, a 73-year-old retired elementary-school principal, that means paying roughly $1,000 a month for various medications until she's bridged the gap. To make do, Mrs. Stroup says she's been skipping her asthma medication Advair, sometimes a week at a time, and switched to a cheaper but less effective pill for her acid reflux. "I don't always want to tell people I don't have the money for it," she says, "so I might wait a week or so to go to the drugstore to pick it up."