Tuesday, November 8, 2011

End Of COBRA, The Reason For Healthcare Decline?

Our hospital has been in a slump lately. Starting about September, everybody has noticed a distressing decrease in the number of procedures being performed. This slowdown has not let up since then. Surgeons are bringing fewer cases to the operating rooms. Anesthesiologists are being told to go home by early afternoon, if not before then. I've been told that the hospital's revenue so far this year is down significantly compared to last year.

Naturally everybody is blaming the shortfall on the economy. Here in California, we still have 12% unemployment, the second highest in the country. If you count the underemployed, those who can only find part time work but want to work full time, the percentage jumps up to 23%. But the economy has been slumping for so long, and according to government statistics the recession ended in the summer of 2009, why hasn't the medical community been slammed by the recession until now?

Then I realized that contrary to what the media may portray, people don't lose their health insurance right away after they are fired. The government has a rule called COBRA that allows people to buy health insurance through their company for the same premiums they were paying while they were still working there. This group rate is much much cheaper than the rates that a person would have to pay if they had to go into the individual markets to buy health insurance. The premium reduction from COBRA lasts for fifteen months after a person is let go. Thanks to one of the government's stimulus packages, people eligible for COBRA can continue to pay for the lower insurance premiums for the 15 months after May 31, 2010. Okay, so let's see. May 31, 2010. Plus 15 months. Bingo, now we are exactly at September 2011. Coincidence? I think not.

Want further anecdotal observations? The surgery centers around town have been hurting at least since last year. These are the places where they take cash only. Thus they are the first to feel the effects of the recession and unemployment. Some plastic surgeons have even been spotted here in the hospital, doing cases for insurance, and even, GASP!, Medicare. So you know times are tough all over.

Unfortunately nobody saw this cliff coming last summer. We hired all the recent residency graduates that we could find since we were extremely busy at the time. Everybody was complaining about the lack of rest and lost vacation time. Now we are severely overstaffed and people are grumbling about all the new people taking away the cases, or why the old guys won't retire. The healthcare sector has consistently been one of the top creators of new jobs in the economy. At the rate this is going, with the end of COBRA, this may not always be the case.

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