MONITORING ATLANTA’S ECONOMIC HEALTH: THE HEALTH CARE INDUSTRY: No vaccination for recession

With a family to raise and her husband self-employed, Angela Henderson is glad she’s a nursing student nearing graduation.

“I’m thanking my lucky stars that in this economy, I have chosen the route I’ve chosen,” said Henderson, 33, a Georgia State University senior.

Henderson will enter a field that’s considered recession-proof. Nursing and other health professions are seen as immune from the economy’s wrath —- and are projected as hot jobs for the future.

But on the flip side, the health care industry that will hire graduates such as Henderson is limping through the current economic downturn.

Georgia hospitals, doctors and other medical providers are reporting financial pain from an increase in patients who can’t pay bills —- or who postpone care.

That trend stems, in part, from the rise in Georgia’s unemployment rate, which has swelled the ranks of those without health insurance. In addition, many Americans who have insurance face higher deductibles and other out-of-pocket costs, making a medical bill harder to pay.

The recession also has caused more people to cut back on elective surgeries, scheduled procedures and appointments, and prescription drugs, according to surveys and medical professionals.

Health care is relatively insulated from downturns because urgent medical needs get treatment, said Roger Tutterow, a Mercer University economist. But he added that “with health services that you can postpone, the softening of the economy probably hurts.”

And Georgia’s budget shortfall of $1.6 billion to $1.8 billion has forced state officials to shelve a long-anticipated payment increase under Medicaid for hospitals, doctors, nursing homes, dentists and other medical providers.

The faltering economy and payment crunch have hurt the state’s 170-plus hospitals, industry officials said.

“Elective procedures are decreasing rapidly,” said Kevin Bloye of the Georgia Hospital Association. “For a lot of hospitals, it’s their bread and butter —- hernia repairs, knee replacements, bariatric procedures.”

Hospitals are delaying equipment purchases and renovations, Bloye said. The credit crunch has raised their costs of borrowing money.

A recent American Hospital Association survey of 736 hospitals found about half have experienced an uptick in the proportion of patients unable to pay for care, which is putting pressure on hospitals’ financial health. Many hospitals, including some in Georgia, have cut administrative costs, staff and services.

Across the state, rural hospitals’ percentage of patients who have no insurance has climbed to 20 percent from 12 percent to 14 percent, said Jimmy Lewis of HomeTown Health, an organization of rural hospitals in Georgia.

Grady Memorial Hospital also has seen an increase in the number of uninsured patients, which now hovers at about 40 percent for the Atlanta safety-net facility.

CEO Michael Young, though, said the recession also has brought Grady a new type of patient: those who have never previously sought treatment there, but who have lost their jobs and are uninsured for the first time.

“These patients coming to Grady for the first time now recognize what their taxes are paying for and are appreciative,” Young said. “They say, ‘Now we realize why Grady is here.’ “

Many consumers, feeling pinched by the poor economy, have cut back on medical services. A survey by the National Association of Insurance Commissioners found 22 percent of respondents have reduced the number of times they see the doctor because of the downturn.

Dr. Harry Strothers, a family physician in East Point, said many patients with chronic diseases are canceling appointments or not showing up. He cited a woman who had an abnormal mammogram.

“She has put off seeing a surgeon because she has a 20 percent co-pay to pay,” Strothers said. “She doesn’t have the money.”

Delaying necessary services can cause more problems later, Strothers said, adding that patients are also not filling prescriptions.

“Going without a medication for hypertension, diabetes or high cholesterol will take its toll later,” Strothers said.

A Georgia Dental Association survey found 69 percent of dentists said patients are not coming in for preventive and routine care as often as before.

“If they don’t take care of minor problems, they will become major problems,” said Martha Phillips, the group’s executive director.

Among other medical trends amid the poor economy:

> The number of prescriptions filled in the United States fell 0.5 percent in the first quarter and 1.97 percent in the second, compared with the same periods in 2007 —- the first negative quarters in at least 10 years, research firm IMS Health said.

> A drug industry program called Partnership for Prescription Assistance —- offering free or reduced-cost drugs to low-income people —- has seen a major increase in applicants nationally, with the number of Georgians seeking this aid jumping from 4,000 in September to 7,000 in October.

> A flood of uninsured patients have recently sought services at Georgia’s network of “free” medical clinics. “A lot of them are new patients,” said Donna Looper of the Georgia Free Clinic Network. “I talked to people who have lost their jobs and have no health insurance.”

Tommie Ward, 63, of Buford lost her insurance when she left her restaurant job because of chronic heart and kidney problems. When she visited a Gainesville free clinic, “I was very close to death,” she said. “If not for them, I would have died.”

More affluent consumers are forgoing discretionary medical services.

Andy Garrard of the Emory Eye Center said Lasik surgery there has dropped 30 percent, mirroring national trends.

The American Academy of Cosmetic Surgery said invasive procedures —- which tend to be more expensive —- have decreased, including tummy tucks, breast augmentations and face-lifts.

Dr. Dan DeLoach, a Savannah plastic surgeon, said his practice began to see the economic fallout last spring, with the elective cosmetic surgery part of his business taking the biggest hit.

Despite the widespread economic damage, though, hiring will continue in health care, pushed by the aging of baby boomers and steady growth in Georgia’s population.

The Georgia Department of Labor has projected that by the year 2016, health services will account for one in every 12 new jobs in the state. Much of that growth will go to hospitals, though employment in physician offices and nursing and residential care facilities will also jump significantly.

Nine of the 20 projected fastest-growing occupations are in health care, including home health aides and physician assistants, according to Labor Department data. Other hot jobs: pharmacists, physical therapists, and, of course, registered nurses.

The recession may alter this timeline, but health care job growth will eventually occur, the Labor Department says.

The poor economy has caused some nurses to add hours or return to work as their spouses lose their jobs, said Susan Grant, interim dean of Emory University’s School of Nursing. The state still has a nursing shortage. But nursing schools in Georgia and elsewhere have capacity problems mainly caused by a shortage of faculty. Emory, though, took more students into the nursing school this year than ever before.

A beginning RN in Georgia can make about $50,000 a year, Grant said.

“We’re seeing people from other professions leave and go into nursing,” she said. “We had a firefighter, Internet company employees, IT folks. They are changing careers for job security.”

ECONOMY AFFECTING MEDICAL DECISIONS

Percent of the public who say they or a family member has done any of the following in the past year because of cost:

Put off or postponed getting health care you needed:

April: 29 percent

October: 36 percent

Skipped a recommended medical test or treatment:

April: 24 percent

October: 31 percent

Didn’t fill a prescription:

April: 23 percent

October: 27 percent

Cut pills or skipped doses of medicine:

April: 19 percent

October: 22 percent

Source: Kaiser Family Foundation poll

HOSPITALS POSTPONING PROJECTS

Percent of hospitals reconsidering or postponing capital expenditures:

> New capacity/renovations: 56 percent

> Clinical technology/equipment: 45 percent

> Information technology: 39 percent

Source: American Hospital Association survey in November

Fifth in a series: Today in Business and for succeeding Sundays, the AJC will look at how the economic crisis is affecting some of metro Atlanta’s key companies and industries.