Time to Have Elective Surgery? With Threat of Benefits Loss, More Go Under the Knife

By Katie Merx, Detroit Free Press

Apr. 10–Thousands of layoffs combined with the specter of more to come have Michiganders rushing to book elective surgeries — for conditions such as back or knee pain — before they lose employer-sponsored health insurance.

Elective surgeries at Henry Ford Health System during the last six months were up 20% compared with the same period a year ago. During the same six-month period, the rise in overall surgical volume was just 10%.

"It suggests that certainly there are people who are getting elective surgeries done now, rather than putting them off," said Henry Ford Senior Vice President and COO Robert Riney. "That’s perhaps driven by concern about job cuts and the loss of health insurance."

The fact that overall surgical volume is up 10%, Riney said, can be attributed to improvements made throughout the health system. That elective surgical volume is up 20%, he said, is "consistent with the idea that people are getting things taken care of before they lose their health coverage."

Historically, that’s what happens in an economic downturn, Riney and other area health care executives said. Elective surgeries and patient volumes rise as people tend to the health concerns they’ve neglected and nonemergency surgeries they’ve postponed.

Indeed, in March, the Detroit Medical Center recorded its highest patient volume in five years, CEO Michael Duggan said. Novi-based Trinity Health also has reported more patients of late.

"The conventional wisdom is that when the economy starts to go into a downturn, that health care utilization typically goes up in the short run because people are concerned about losing health-care benefits," said Patrick McGuire, senior vice president and CFO at Warren-based St. John Health. "They get things done that are elective or shouldn’t be elective but they’ve put off for a while."

"Intuitively, we believe people faced with loss of benefits will use them prior to their coverage ending," said Blue Cross Blue Shield of Michigan spokeswoman Helen Stojic. "For instance, we recall an instance when we saw an increase in prescription drug use in the fourth quarter after it was anticipated that benefit changes would occur on Jan. 1 that would increase employee drug co-payments."

But many health executives said it’s hard to tell if that’s happening across the board this time around. There are other things changing in health care as well. In Michigan and across the country, many working people are finding they are responsible for a greater share of their rising health costs even as their wages stagnate.

Many health care executives say they believe that has led insured working people to seek less nonemergency health care. Regionally, hospital admissions were down an average of 3% in the last three months of 2005, according to a voluntary survey that includes most local hospitals. Dearborn-based Oakwood Healthcare System and Beaumont Hospital in Royal Oak cited declines in patient volumes as the cause of recent layoffs at those hospitals.

And when people seek care, hospitals don’t record whether they have just or are about to lose their jobs. So health executives don’t know for sure whether people worried about the loss of health benefits are seeking more care and people who have higher co-payments are balancing out that effect by seeking less.

Additionally, Henry Ford’s Riney says he believes the region is just at the beginning of the phenomenon of people rushing to get elective care before their insurance runs out.

For one thing, many of the automotive workers who have been laid off or who face that threat will maintain employer-sponsored coverage for several months and will have the option to maintain group benefits, if they pay for them, for another 18 months.

"Oftentimes people who lose their position aren’t without health benefits for up to a two-year period of time," Riney said.

For example, General Motors Corp. severance packages include full-coverage health benefits for up to 15 months, depending on years of service. When that runs out, most employees will have the option to purchase group health insurance at 102% of the company’s price for up to 18 months more.

So the full and obvious effects of health-insurance loss on health systems could be delayed, Riney said.

The hope, he said, is that many of those who lose their jobs and health insurance will find new employment before they run out of benefits.

But despite the usual short-term bump in demand for health –care services that accompanies layoffs, there is significant concern in the health care industry about the regional economy.

"If the economy does not pick back up and replacement jobs are not created, going into 2007 and 2008, there would definitely be a financial impact on health systems," Riney said.

—–

Copyright (c) 2006, Detroit Free Press

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

Unknown:HFH, Unknown:THT, Unknown:BCB, NYSE:GM,