Thursday, July 29, 2010

Americans Cut Back on Visits to the Doctor, But Increase Visits to Retail Health Clinics by 36%

From today's WSJ article "Americans Cut Back on Visits to Doctor":
Insured Americans are using fewer medical services, raising questions about whether patients are consuming less health care as they pick up a greater share of the costs. Doctor visits have declined each month this year, including a 7.6% drop in May 2010 from May 2009.

The drop in usage is showing up as health-care companies report financial results. Insurers, lab-testing companies, hospitals and doctor-billing concerns say that patient visits, drug prescriptions and procedures were down in the second quarter from year-ago levels.

"People just aren't using health-care like they have," said Wayne DeVeydt, WellPoint Inc.'s chief financial officer, in an interview Wednesday. "Utilization is lower than we expected, and it's unusual."
Well, maybe it's not really so unusual based on this report "MinuteClinic visits up 36% in Q2":
Fewer physician visits have contributed to a lift in visits to MinuteClinic as patients look for convenient and cost-effective access to healthcare services.

"Recent reports by IMS have indicated that fewer people are visiting doctors. We see this data on the fourth quarter versus the first quarter of this year, and we are expecting to see the same in the second quarter," said Tom Ryan, chairman and CEO of CVS Caremark. "Patients are visiting fewer primary care doctors and specialists. Obviously, the sluggish economy and continued high unemployment has impacted peoples' ability to afford physician visits."

Clearly, this trend, coupled with MinuteClinic's expansion of service offerings and increased awareness, has helped drive the MinuteClinic business, as people in need of convenient and affordable health care take advantage of MinuteClinic's portfolio of roughly 500 clinics in 25 states and the District of Columbia.

MinuteClinic visits rose 36% during the second quarter. "We believe that MinuteClinic's strong growth reflects our expansion of services and the improved awareness around our clinical offerings," Ryan said.
Bottom Line: Consumers aren't necessarily consuming less health care like the WSJ suggests; rather, they are shifting their demand for health care away from expensive, conventional physician offices with limited hours to affordable and convenient retail clinics.  Especially when consumers are spending their own out-of-pocket money for health care and they have a choice, they prefer market-driven, consumer-driven options like affordable, convenient retail clinics over conventional physician offices.

13 Comments:

At 7/29/2010 11:59 AM, Blogger Hydra said...

The first wave of baby boomers are retireing, and losing their health insurance in the process. They probably maximize dental and preventive care while approaching retirement.

While they remain healthy they will tend to do without, temporarily lowering health care demand from exactly those you would expect to need it the most.

 
At 7/29/2010 12:22 PM, Blogger Jet Beagle said...

Not sure what you are implying, Mark. I will agree that households without incomes - or with temporarily low incomes - will choose "affordable, convenient retail clinics" in order to retain funds for food and shelter. But I doubt that many will continue that choice once their incomes are restored.

I am positive that my household will not rely on "out-of-pocket" solutions for funding health care. The financial risk in doing so is simply too great, and we will always attempt to share that risk with pools of other households.

Economists frequently attempt to distinguish between routine and catastrophic health events. The argument is generally made that by paying out-of-pocket for routine health events, overall costs could be reduced.

As I see it, it is not the routine health events which have caused health spending to skyrocket. For example, the four months of intensive care hospital costs incurred by my brother-in-law before his death exceeded by many times the total health spending by his entire family over the past 30 years.

 
At 7/29/2010 1:05 PM, Blogger Bloggin' Brewskie said...

Mark,

This is completely off topic, but I found a great article by Robert Rapier offering a critical examination on Matt Simmons's hyperbolic deepwater spill claims. It's long, it goes into a bit of detail... but it's ultimately a worthwhile piece; the article ends up being funny without efforts of being so.

 
At 7/29/2010 1:35 PM, Blogger Hydra said...

I also think it is a matter of getting the urgent care clinic model more established. It takes time to grow a client base.

I recently used one to have a test done, with the results sent to my doctor, in order to save a few miles of driving. this wasn;t a replacement but an augmentation for my regular doctors service.

 
At 7/29/2010 1:35 PM, Blogger Hydra said...

This comment has been removed by the author.

 
At 7/29/2010 2:04 PM, Blogger Hydra said...

"For example, the four months of intensive care hospital costs incurred by my brother-in-law before his death exceeded by many times the total health spending by his entire family over the past 30 years."

=================================

This is typical. For most people 90% of their lifetime health costs will occur in the last four years of life.

 
At 7/29/2010 2:32 PM, Blogger Jet Beagle said...

Is the problem really that consumers are not paying out-of-pocket for health care? Or is it that the government interferes so much in health insurance markets? IMO, mandated coverage and restrictions on insuror cost control has contributed much more to the cost of health insurance than has the indirect payment of services. Health insurors are perfectly capable of controlling costs, and capable of offerring a variety of products which appeal to consumers' varying incomes and levels of risk adverseness. State and federal restrictions prevent them from doing so.

 
At 7/29/2010 5:53 PM, Blogger Hydra said...

State and federal restrictions prevent them from doing so.

================================

Are the state regs superceded by the federal regs under Obama's HCR?

 
At 7/29/2010 5:59 PM, Blogger Hydra said...

Insurors are capable of doing a lot of things, bu they may not have enough incentive to do them. competition doesn't exist in health care the same way as pizza parlors. My insurance company fired me as a customer, didn't care whether I was there or not, and refused even to explain why they kicked me off the rolls.

We need to recognize as JB pointed out that some people use a lot of resources for not much benefit. We don't live longer because of health care, we just die longer.

 
At 7/29/2010 6:09 PM, Blogger Jet Beagle said...

Hydra: "Are the state regs superceded by the federal regs under Obama's HCR?"

I think so, but that's a question for our legal system. In 1945 the U.S. Congress passed the McCarron-Ferguson Act which enables each state to regulate health insurance within the state. As I understand it, that act also gives the U.S. Congress the right to override such state regulation. McCarron-Ferguson was not designed to limit the power of Congress. Rather, it simply prevented insurors from invoking the interstate commerce clause in attempts to circumvent state insurance regulations.

 
At 7/30/2010 10:26 AM, Blogger Hydra said...

"....in attempts to circumvent state insurance regulations."

==============================

That's pretty funny. I got the state insurance commisioners office involved in a dispute with my isurance company, and I was told ins os many words that the insurance company had all the rights and I had none.

In a neighboring state the insurance commisioner there was suing the same insurance company over the same practice: a practice that will be outlawed under HCR.


Overall, I'd put health care in the category with environmental protecion and anything else that is important-but-discretionary-compared-to-rent. If you don't have the money, it changes your attitude as to what you can afford and what you need.

On the other hand I doubt if you will see a drop in the number of emergency appendectomies performed.

 
At 7/30/2010 10:55 AM, Blogger juandos said...

Hmmm, ObamaCare?

I can't help but wonder if Czar Berwick will help drive traffic to these clinics...

 
At 7/30/2010 7:08 PM, Blogger Jet Beagle said...

This comment has been removed by the author.

 

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