Economic Crisis and Medical Care Usage

Within countries, negative shocks to wealth and employment are strongly associated with reductions in routine medical care.

The global economic crisis, which began roughly in July 2007, took an historic toll on national economies and household finances. In The Economic Crisis and Medical Care Usage (NBER Working Paper No. 15843), co-authors Annamaria Lusardi, Daniel Schneider, and Peter Tufano examine the relationship between the global crisis and individual decisions related to routine medical care. To conduct their study, the researchers survey individuals in Canada, France, Germany, and Great Britain, all of which have universal health care systems, and in the United States, which does not. They find that within all countries, negative shocks to wealth and employment are strongly associated with reductions in routine medical care. The size of the reductions in the use of medical care, however, depends upon the degree to which individuals must pay for it.

Individuals and families across all five developed countries lost wealth through falling stock prices. They also lost income because of unemployment. These effects were strongest in the United States, where nearly 55 percent of American respondents reported some decline in wealth. These losses affected medical care usage. "The greater the reported loss in wealth, the larger the net reductions in routine care," the authors find.

U.S. citizens, lacking universal coverage and paying the highest out-of-pocket amounts for care, reported the most dramatic reduction in seeking routine care during the global economic crisis. Between 2007 and 2009, more than 25 percent of Americans reported reducing their use of health care - a rate two to five times that of Europeans, who also reduced their use of routine medical appointments during this period. Compared with their British counterparts, Americans were 16 percentage points more likely to reduce their use of medical care. The most pronounced reductions were found among the unemployed, the young (ages 16-24), and those with lower incomes.

-- Sarah H. Wright