In Sickness and Health, Economy Continues to Drive Health Care Utilization

Health care utilization will continue to be depressed as long as the nation’s economic woes continue, Wall Street analyst Carl McDonald said at the AcademyHealth policy conference. The economy has historically driven health care utilization and that won't change, he said. When the economy picks up, utilization will follow, he added.

For publicly traded managed care companies, a better economy as well as Republican wins in the upcoming elections would be the best scenario, he said.

But McDonald argued that the expected Supreme Court decision on the health care reform this summer won't have nearly the impact that many expect. Instead, a bigger factor is present in the form of the young and healthy, he said. Faced with spending several thousand dollars a year on health insurance they'll never need or paying a $95 fine, it's clear what this group will choose, he said. And without the young and healthy in the pool, the older and the sicker will be the primary portion of the pool, contributing to the dreaded "adverse selection."

"For the sickest, it will be health insurance Christmas," he said.

Overall, health reform is a bad thing for the managed care industry, he said.

On the outside for managed care companies, there's soon to be a lot of growth as "dual eligibles," those eligible for Medicaid and Medicare, begin to be moved in large numbers into managed care environments.

Editor’s note: CHI’s Deb Goeken, Michele Lueck, and Jeff Bontrager are attending AcademyHealth’s National Health Policy Conference in Washington D.C. For real-time updates, follow Deb on Twitter or search #NHPC12 for updates from other attendees.

Deb Goeken is a vice president at CHI.