With the threat of the pandemic forcing everyone to maintain social distancing and avoid physical interaction, many businesses that have been considered “nonessential” by the federal government have been forced to close. Unexpected losses have been experienced by professionals in the health and wellness industry such as hospital workers and health insurance agents.
The effects of COVID-19 on healthcare businesses have been unexpected; historically, healthcare is “immune” to economic recessions. According to the Journal of the American Medical Association (JAMA), demand for health care should be stable across any business cycle and is expected to increase during outbreaks of diseases. Surprisingly, COVID-19 disrupted demand in some sectors.
Who is most affected by COVID-19?
Although there is no official data released by the federal government regarding the impact of COVID-19 on healthcare businesses, several associations have contributed their research to push for a more effective legislative response. Below are the details on how the pandemic affected certain sectors:
In a study by McKinsey & Company, the U.S. private healthcare system costs for COVID-19 cases alone have reached $5.3 billion. This results from hospitals having to purchase personal protective equipment (PPE), treatment apparatus, and even testing kits out of their own pockets. On non-COVID-19 cases, McKinsey & Company also reported that private hospitals incurred a higher cost between $30 to $65 billion due to patients canceling their appointments and unable to pay for their scheduled treatments.
Spas and Massage Facilities
Spas and massage therapy are among the services that were flagged as “nonessential” by the federal government. In Arizona, CNBC has reported that all spas and massage bars have been closed throughout the state. This has forced many massage therapists to close their businesses due to receiving little or no support for their business costs, such as rent and utilities.
Health Insurance Companies
Losing clients have affected even the top health insurance companies in the U.S. In fact, according to MarketWatch’s data, United Health has suffered a consistent negative percentage on its stock performance for the past six months. As of today, its value has dropped to -2.50%. The primary reason why health insurance companies lost clients is job loss. Most Americans rely on their employers to shoulder the insurance expenses. On the other hand, insurance companies cannot offer relief through premium reductions for all their clients.
The New England Journal of Medicine, with the help of Alignable, a network of business owners in the U.S.A., conducted a study to find out how many U.S. employees can continue health insurance payments. Out of 1,634 respondents, only one-third were planning to continue their payments for another two months. According to the Economic Policy Institute, 12 million Americans have lost health insurance policies since February, the early onset of the pandemic in the U.S.
What is the government doing about it?
Many states have tapped health insurance companies to extend the “grace period” for premium payments for cases where premium reduction cannot be given. For lapsed insurance policies, reinstatement processes have been eased off.
The federal government and the local state governments have subsidized and funded private hospitals, so they can be “geared” toward COVID-19. Some of the relief given is additional PPE for the staff, handover of treatment apparatuses, and hazard pay for hospital workers.
Also, as of today, there have been many states that authorized spas and massage bars to reopen their businesses, provided that they would follow the local health protocols given by the state, such as:
- Limiting the number of customers inside their facilities;
- Extensive cleaning of equipment and instruments;
- Testing of employees before work; and
- The mandated wearing of PPE.
For the full list of states that have agreed to reopen massage facilities and the health protocols that should be followed for each state, you can refer toABMP’s news pageandAMTA’s announcement page, both of which are updated regularly.
What measures should you take before reopening your healthcare business?
The first step you should take is to get a full understanding of the laws and ordinances that your state has released. Take note that not all states have the same health protocols regarding the reopening of establishments, and you should strictly adhere to the protocol of the state where your business is registered under.
You have to ensure that extensive cleaning and disinfection are done to every piece of equipment used in your establishment-couple this with observing the proper hygiene protocols for you or your personnel.
Healthcare businesses will bounce back.
Like many small businesses that many states have allowed reopening to help with the economy, healthcare businesses will see its “full reopening” soon. Since many health associations, patients, U.S. employees, and business owners have been appealing to the government to give more support to healthcare businesses, it is unlikely that healthcare businesses would be on complete shutdown amid the COVID-19 pandemic despite the losses.