$100 versus $10,000: The timing of the great recession and heterogeneous changes along the health expenditure distribution

Background: The Great Recession of 2007-2009 was the longest recession in the United States history. It has been associated with reduced health care spending among adults. The objectives of this study are: (1) To examine whether the Great Recession was linked to health expenditures and whether this association varied across the health spending distribution. (2) To examine whether racial and ethnic disparities in health care expenditure reduced, persisted or deteriorated during the recession across the expenditure distribution. Method: We employ nationally representative data from the Medical Expenditure Panel Survey of 2005-2006 and 2008-2009. Our outcome variables are annual health care expenditures: total health care spending, and spending on different types of health care services, i.e. physician visits, prescription drug, outpatient visit, inpatient visits, and emergency department (ED) visit. Quantile regressions are employed to estimate the different associations between the Great Recession and health care expenditure variation across the distribution of health care expenditures. Samples: Our analyses include adults aged 18 to 64 years old in the civilian, noninstitutionalized population Results: The Great Recession was significantly associated with reduced health care expenditures, but not at the upper levels of spending. Racial and ethnic disparities were more substantial at the lower end of the health expenditure distribution; however, on average the reduction of health care expenditure was similar for all race/ethnic groups. The Great Recession was associated with significant decreases in prescription drug spending, and it was associated with higher physician expenditures at the 50th percentile and above. The Recession was significantly positively associated with ED costs. The negative association of recession and health care expenditure was more substantial among the uninsured, followed by those with public and private health insurance. Conclusion: The economic recession was associated with a reduction in health expenditure, particularly in lower ends of the health care expenditure distribution, suggesting the possible deterioration in health care access and primary care utilization induced by the recession, especially among people without health insurance. Our study found no reduction in health expenditures among those requiring large amount of health care resources. Prescription drug cost reduction might indicate the likelihood of substituting generic drugs for expensive brand name ones, especially among the racial and ethnic minorities. Higher ED costs and increased physician expenditures during the Great Recession may be related to delays seeking primary care and resilience of physician's pay to economic crises, respectively. Racial and ethnic disparities persisted during the recession.