Diseases have been posing major challenges to the survival of the human race, as seen through previous epidemics such as the plague. Presently, the world is in a vicious battle against the most severe challenge in this century created by the coronavirus pandemic. Pandemic has had damaging effects on all aspects of the global economy, including healthcare. The COVID-19 pandemic has posed new challenges to the global healthcare system. The issues such as nursing shortage, isolation, and limited access to healthcare could be seen in both developed and developing countries. This paper presents research into the financial impact of coronavirus on the healthcare industry in the United States.
The financial difficulties imposed by the COVID-19 pandemic in healthcare include the change in cost and revenue dynamic. Typically, one of the main expenses in the healthcare system is labor, which takes 50-60 percent of all expenses (Blumenthal et al., 2020). However, with the pandemic, the demand for healthcare drastically increased, meaning that the demand for labor increased as well. Such tendency has shown how problematic the issue of nursing shortage is for the healthcare industry in both the long term and short term. Another additional expenditure that increased financial pressure on the healthcare industry is the provision of personal protection equipment. Such financial burden remains to be a relevant part of everyday costs related to healthcare.
It is hard to evaluate and compare the financial impact of COVID-19 on the healthcare industry and economy in general. Yet, the impact of the pandemic can be witnessed through its effect on economic production. Governments have endeared on enforcing lockdowns as countries seek to curtail the spread of the disease by restricting human movements and interaction (Barnett et al., 2020). Many businesses remain closed or record a decline in the volume of business activity. Travel restrictions and closed borders largely affected the transport and aviation industry (Jones et al., 2020). As businesses close down, the USA presently experiences mass layoffs daily as companies respond to declining economic productivity. The USA recorded an unprecedented 3.28 million claims of loss of employment in one week in March, which is way higher than the 1.6 million estimates (Reeves, Carlsson-Szlezak, and Swartz, n.p). Ideally, the ensuing situation is loss or decline of income among households as jobs diminish.
On the contrary, the healthcare industry is integrated into the economy and suffers the same financial uncertainties. Yet, the type of service provided in the healthcare industry is always in demand, and unlike many other economic industries, the revenue made by the private capital in healthcare remained in place. Hence, despite many issues and challenges, financially, the healthcare industry was impacted less than the economy in general.
After the peak of the COVID-19 pandemic, the healthcare system began to adapt to the new environment along with the economy of the country. Therefore, new strategies and models of receiving revenue are discussed and developed within the healthcare industry. As such, the COVID-19 pandemic emphasized the importance of digitalization in many areas. In healthcare, digitalization is especially relevant as it provides growth opportunities for telemedicine. Hospitals tend to imply measures that focus on cutting costs and expenses associated with healthcare. Technology, data science, and evidence-based approach implementation aid in identifying key areas of reducing expenditure. Therefore, the healthcare industry modernizes to be more sustainable and efficient to be resilient to crises such as the one imposed by the COVID-19 pandemic.
References
Barnett, M. L., Mehrotra, A., & Landon, B. E. (2020). Covid-19 and the upcoming financial crisis in health care. NEJM Catalyst Innovations in Care Delivery, 1(2).
Blumenthal, D., Fowler, E. J., Abrams, M., & Collins, S. R. (2020). Covid-19—implications for the health care system. New England Journal of Medicine, 383(15), 1483-1488.
Jones, L., Brown, D., &Palumbo, D.. (2020) “Coronavirus: A Visual Guide to the Economic Impact.”BBC News, Web.
Reeves, Martin, Philipp Carlsson-Szlezak, and Paul Swartz. “Understanding the Economic Shock of Coronavirus.”Harvard Business Review, Web.