While the health care industry works nonstop to battle COVID-19, the respiratory disease caused by the new coronavirus, it would seem business is booming.
But the surge of activity in health care right now is deceiving, said Reagan Baughman, associate professor of economics at the Paul College of Business & Economics at the University of New Hampshire. She sees a future “meltdown” in that industry because of the current crisis.
Hospitals and many medical practices rely on big-ticket surgeries, scans and other procedures to subsidize the patient care that doesn’t bring in revenue. That includes much of the treatment and resources now being devoted to COVID-19.
“The types of care they’re providing aren’t money-making types of care,” Baughman said.
Most hospitals have temporarily halted elective surgeries and procedures to focus on the outbreak. That means the revenue from those services has stopped, as well. At the same time, many hospitals have backed off their usual bill collection procedures to ease financial pressure on patients — causing another hit to revenue.
The health care and social assistance part of the economy represents 9 percent of New Hampshire’s gross domestic product, which refers to the value of goods and services sold, according to a report by the Casey School of Public Policy at the University of New Hampshire. That’s slightly more than the 7 percent U.S. share of GDP that comes from that sector, the report shows, based on 2017 data from the U.S. Bureau of Economic Analysis.
Health care and social assistance also accounts for 14 percent of the state’s jobs — the largest single employment sector, reports the N.H. Fiscal Policy Institute. The institute, a nonprofit organization that promotes public policies to enhance economic opportunity, particularly for low- and moderate-income residents, used estimates for January 2020 from N.H. Employment Security in its report.
Hospitals were in a staffing crisis well before the coronavirus hit U.S. shores, and they cannot get the help they need. With the financial pressures of the current outbreak, it’ll get even harder to attract needed workers. Some hospitals already have stopped their contributions to employees’ 401(k) programs, Baughman said.
By observing the current whirlwind, “a lot of people would think the opposite” of health care finances, she said.
Baughman, though, said she expects a downfall is coming and the need for a federal bailout of the health care industry is likely.