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Finally healthcare expenditures are shrinking in US

Hospitals laying off workers, blaming in on fewer patients and lower revenue... No statistical model was able to predict it, although the explanation is obvious.

After several years into Great Recession

  • Employers are cutting on healthcare benefits, as insurance fees are soaring
  • Employees who are still insured have to pay higher deductibles, higher co-pay etc.
  • This, combined with job insecurity, makes employees less willing to visit a doctor / hospital
  • The growing number of uninsured / self-employed are saving costs on healthcare, which means fewer hospital visits
  • People get smarter about curing themselves with alternate or home-made, less expensive medicines

You would think that with an aging population of baby boomers, healthcare would become the next big bubble. It seems it is not going to happen this year though, nor next year. Read Swedish hospital system warns staff of likely layoffs to learn more on this trend:

"Utilization of health-care services is down across the country," he (Swedish hospital's CEO) said.

"Individuals are not accessing health care the way they once did."

Major factors, Brown said, include higher health-insurance deductibles and uncertainty in the job market, which has led more people to delay health care because of out-of-pocket expenses or because they don't want to take time away from work.

Patient volumes across the Swedish system so far this year are 8 percent lower than projected, and below what they were a year ago, he said.

In addition, the health-care system is seeing fewer patients with commercial insurance and more patients who are uninsured or covered by Medicare or Medicaid, which "do not adequately cover the cost of providing care," Brown told the staff.

Tizon said the management at Swedish has already taken steps to reduce expenses, including reducing external hires, freezing capital spending except for items needed for "safe, quality patient care" and freezing discretionary spending such as travel for conferences.

Swedish in February finalized an affiliation agreement with the much-larger Providence Health & Services. But Tizon said Providence was not driving the cuts, because Swedish is responsible for managing its own operations.

Last month, Swedish closed its Visiting Nurse Services and laid off 216 employees.

In his memo Monday, Brown asked employees not to panic but emphasized that "we do need to act with a sense of urgency."

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