Economics - General Hospitals

Does a robust economy improve your grandmother’s longevity?

A number of studies have found that economic growth (in the short-run) has adverse affects on individual’s health and economic downturns actually cause health improvements.  During an economic downturn, individuals work less, sleep more and reduce their alcohol and cigarette usage; all these actions have a salutatory effects on health.

For working adults, recessions decreased healthcare use through two pathways: i) a reduction in the number insured, ii) lower income available to purchase health insurance. Because seniors are insured by Medicare, this is not the case.

Do elderly individuals also experience improved health and decreased healthcare utilization during an economic downturn?  It turns out the answer is no.  McInerney and Mellor (2012) find the following:

[From] 1994 to 2008…we observe a fairly robust pattern of countercyclical mortality in the senior population. Further, as state unemployment rates rise, we find that seniors on Medicare report worsening mental health, and we find no evidence that health behaviors improve.”

Thus, improvements in aggregate economic conditions result in decreases in mortality.  Why does this occur?  It could be the case that seniors are getting better access to needed medical care.

Unlike younger adults who seem to use less healthcare as unemployment rates rise, seniors use more inpatient care…the rise in healthcare use may be tied to an increased willingness of healthcare providers to accept Medicare patients.”

Supply elasticities may be the cause of the decrease in mortality.




  1. Interesting data, but this post does display (unintentionally) the immense sense of entitlement that Medicare has created. I used to dislike the classic David Hyman piece on Medicare and the devil, but I may have to revisit it.

    Senior citizens in general have time on their hands, and their bodies are decaying at various idiosyncratic ways. So are their memories, etc. I have been taking care of my mother and father, ages 88 and 89, so this is not just an academic observation.

    Thanks to Medicare supplements and Medicare Advantage, there is no financial barrier for most seniors to see a doctor.

    The complaints that they may report may serious or small, but all are a part of growing old.

    It is misleading to say that their health is declining if more ailments are discovered. I am absolutely positive that if that if you tracked 1000 seniors today and then tracked 1000 seniors from 1964, the group today would be more active by far, less riddled by pain, and living 6 to 9 years longer on average.

    Which is fine, but it is an absolute social luxury. If Medicare part B disappeared in budget cuts and seniors only went to the doctor when they were really hurting (since it would cost $100+), the nation would survive just fine.

    When the English and French give out free pre-natal care but deny dialysis after age 80, they may be right. If we continue to shortchange the health of young people, that is not good,

    Comments Welcome!

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