Depression 2009: What won’t it look like?

Yesterday’s Boston Globe Ideas section led off with a typically cheery piece. (See Depression 2009: What would it look like?) The subtitle:

Lines at the ER, a television boom, emptying suburbs. A catastrophic economic downturn would feel nothing like the last one.

The article by Globe writer Drake Bennett is fairly insightful overall. Whereas the Great Depression of the 1930s was characterized by bread lines, threadbare clothes, and migrations from the Dust Bowl to California, the new one, he says, will put the strain on health insurance, housing, transportation and child care. I think that’s right, but the characterization of health care is somewhat off base:

The lines wouldn’t be outside soup kitchens but at emergency rooms…

It’s true that a new depression will put great strain on the health care system, but it’s unlikely to lead to lines at the emergency room. Those lines are more a symbol of prosperity and boom times than of a depression –which is why overcrowding of emergency rooms has been a problem for the last several years. While people think it’s the uninsured clogging up the emergency room, actually people with insurance use the emergency room –and other kinds of medical services– more. In a depression, demand for health care services will drop along with demand for everything else –it just won’t drop as much.

At the macro level, some of the impact may actually be positive, and this isĀ  hinted at by the top story on the front page of the same edition of the Globe, which points out that academic medical centers in Boston charge a lot more than community hospitals for the same services, even when quality is the same or lower. (See A healthcare system badly out of balance.) For many years, employers and health plans have gone along with these price differentials, on the assumption that employees won’t accept having their access to downtown teaching hospitals restricted.

My prediction is that this situation is going to change in Boston (which is unusual in its high use of teaching hospitals), and that the same forces are going to drive change elsewhere. In particular, patients will start rationing care themselves. They won’t go for the most expensive or newest procedure or drug, because they realize they can’t afford it and that something cheaper may be just as good or better. Patients will stop blaming the managed care industry for being cheapskates and will actually seek its help keeping costs under control. And people won’t line up at the emergency room for expensive, inconvenient care.

November 17, 2008

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