How Insurance Works

Why the Health-Care Sector May Not Rebound to Its Former Size | WSJ

– [Narrator] The U.S. economy
lost more than 20.5 million jobs in April, and 1.4 million
of them were in healthcare, a sector that has historically
been recession-proof. This chart shows employment
numbers between 1990 and 2020. This downturn is the great
recession, where millions of workers were laid off. You can see healthcare
jobs continue to rise during that same period. And the same can be seen
during other recessions, too. But this time it’s different,
and experts say that the impact from the coronavirus
crisis could fundamentally change the healthcare
sector, and a lot of the jobs lost are not likely to return. – Healthcare has been among
the most resilient industries in the economy, and there are
really two reasons for this. – [Narrator] David Cutler
is an economics professor at Harvard, and has done a
lot of work understanding how the medical system
operates, and how it responds to events like COVID-19. – One is because people have insurance, and second is because
people’s illness tends not to vary too much over
expansions and recessions. Since the pandemic, anything
that’s not emergency, people have cut enormously,
and even many emergencies, use of care for emergencies
is way, way down. – [Narrator] To help the
sector cope with the virus, some healthcare restrictions
were relaxed as part of the $8.3 billion
coronavirus stimulus package. That gave a big boost for different parts of the healthcare industry,
including telemedicine, that saw one company report a
50% rise in telemed services. – Now people both in private
insurance and in Medicare are using telemedicine
a lot, it’s hoped that that can then become a
usual part of practice. On a scope of practice
front, we enabled a lot of nurse-practitioners,
medical assistants, physicians’ assistants to do
more, now that we’ve done that, we want to be able to keep that. And the third one which
is really important is, most physicians’ practices
and hospitals get their money by doing more services. When people don’t go to the doctor, the providers lose money. A way out of that is to pay
on a fixed, say per-patient- per-month basis, and so
that’s another change people would like to see become
a permanent change. – [Narrator] Another reason
a rebound in healthcare will be harder than in previous years is people’s financial
exposure to healthcare. Just looking at the last
recession, and the out-of-pocket expenses were far less
than what they are today. – If you’re in a big
recession, and you now learn that you’re gonna pay $2500 out-of-pocket before insurance pays anything, people may decide they’re
happier cutting back, particularly since they just
had experience cutting back during the first phase
of the COVID epidemic. If you then add on top of
that what the potential, for example, COVID to
come back in late summer or fall, and by that point,
you really have people with a very different
outlook for what they want in the medical system, providers
in very different shape, and people in a financial
situation where they may not want to go back to the care
they were receiving. – [Narrator] Healthcare in
the U.S. continues to be one of the most debated
issues among lawmakers and politicians and on a
global level, the U.S. spends at least 17% of GDP on
healthcare, whereas most other developed countries spend
50% less, on average. So while it is critical
for the U.S. economy that healthcare rebounds
and that it continues to provide care for those
who regularly need it, economists are watching
for signs that it emerges from the pandemic more streamlined. – So it’s really a very bad
idea to have a healthcare system that’s bloated, they pay a lot and they don’t get what they need. Now the best way to deal
with this is not to just shut everything off at once and
lay off a ton of people, but to gradually do things
so that you make that change. So what I would hope is that
after we make it through the first part of the
epidemic phase, we come back in a way that’s more
streamlined, so that healthcare isn’t as expensive and
then we help those people who we’re not bringing back to
find other really productive things that they can do, as well.

Reader Comments

  1. Healthcare is a human right. We need to Nationalize the entire healthcare system. Medicare for All! Now!! πŸ”₯πŸ”₯πŸ”₯✊✊✊

  2. If the healthcare industry goes under we will better for it. Its an industry full of scammers, swindlers and thieves. Healthcare should be for all not just the wealthy. Maybe the govt will finally step up to the plate and provide coverage for all like we should have been doing 50 years ago.

  3. Trump is trying to force hospitals to reveal the hidden prices patients are charged that drive up costs. Hospitals, insurance companies, lobbyists and investor groups oppose the revealing of their prices held in each hospitals charge description master (CDM) that is detail listing of all items and services that can be billed. Democrats are opposing it.

  4. This show the stupidity of the lockdown, intended to β€œflatten the curve”.
    There are some serious diseases out there, that are ignored because of the Wuhan virus craze, that in the end proved to be really dangerous only through the panic that was unleashed sand through the huge economic damage that will lead to vastly more lives lost than from the virus itself.

  5. Considering all the tiktok dance videos from bored nurses "sacrificing" everything on the "front-line", maybe it's not a bad thing.

  6. Sagacious, insightful, and bona fide facts. Healthcare sector is also information asymmetries already. Therefore, major changes will cause significant paradigm shifts intrinsically. This time is really different.

  7. Republicans answer to universal health care: how are we going to pay for that?
    But the numbers show we already pay more than most countries with universal healthcare!

  8. Universal Healthcare would fix that for half the cost. Just like it does in every other single developed country and most non developed. Sad

  9. I work at a large hospital in St Louis and they have laid off 1200 workers since the pandemic started

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  11. If democrats win in the next election cycle there is a chance for regulation and enforceable change to occur. If repubs stay in majority then it will be business as usual and rural areas with fewer hospitals will suffer

  12. compared to other countries america spends more of gdp in health care yet no medicine, protective clothes and ventilators?

  13. The government should force insurance companies to offer catastrophic insurance for things over say 25K. Then folks could pay for their own healthcare events and 'subscription medicine' while knowing if a highly unlikely catastrophic illness or injury occurs, they could eventually recover financially.

  14. As forewarned, the pain will continue for a considerable period of time. The problem is vaccine development,
    leadership, and people's mind.

  15. Out of Human reach πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°πŸ’°They will take yourπŸš˜πŸ˜οΈπŸ§πŸ‘—πŸ‘šπŸ‘”off your back if you don't pay….We cannot afford to get sick……..If we don't buy, the Hospitals die,,,,,,Make the cost affordable, not Blood Sucking Greedy, Overkill tactics
    Enough. Vote BIDEN πŸ‡ΊπŸ‡ΈπŸ’― Now

  16. Am British and am horrified by your healthcare system. Ours is not perfect but no matter your income group, even if you’re on the streets you will get treated and it won’t cost you a penny ( obviously it’s paid for through general taxation). So if you get cancer what you worry about is if you will recover and how soon you can get back to work/ will you still be fit to do your job. Being able to pay for treatment is nowhere in the equation.

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