The economy shrank in 2020’s first quarter by a rapid 4.8% rate. Economists say the second quarter will be far, far worse, thanks to coronavirus. The virus’s spread triggered state lockdowns closing or restricting many retail establishments. Even before the lockdowns, fear of the virus shrank sales by discouraging people from leaving home.
But that wasn’t the biggest single reason the economy shrank. No, the biggest decline was in healthcare, due to state governments’ bans on elective surgeries and other elective procedures. The healthcare sector is 18% of the economy. As University of Michigan economist Justin Wolfers notes, “Nearly half” of the shrinkage in the economy was due to “the delaying of elective procedures. It’s a strange reality that in the midst of a pandemic, we have a healthcare-led recession.” How ironic!
Statewide bans on elective surgery never made any sense. In cities and counties hit hardest by the coronavirus, it can make sense to temporarily delay elective surgeries to make beds available for coronavirus patients. But it doesn’t make sense to ban elective surgeries in a state’s other regions, where the coronavirus hasn’t really spread yet. That financially devastates hospitals. Banning most surgeries leaves hospitals without the revenue they need to operate, and forces them to lay off some of the very medical staff they may need to treat future coronavirus patients. “Elective” surgeries are critical healthcare, and a cornerstone of the healthcare system, not needless frills. As the Bacon’s Rebellion blog notes,
Elective surgeries are not cosmetic procedures. They’re often desperately needed surgeries that can be scheduled in advance. That includes some heart procedures, joint replacements, kidney stone removals, gall bladder surgery, eye surgery and a host of other procedures designed to alleviate the pain of thousands.
In early April, researchers predicted that by “June, an estimated 60,000 family practices will close or significantly scale back, and 800,000 of their employees will be laid off, furloughed or have their hours reduced” across America, due to a “decline in elective surgeries” and “preventive care.”
Yet, states banned elective surgeries on a statewide basis. As Virginia journalist James Bacon noted, a “statewide ban on elective surgery is a sledgehammer which may be appropriate for the hardest-hit parts of the state but is wildly inappropriate for others.” In Virginia alone, more than 30,000 healthcare workers were laid off, after “elective procedures and surgeries” were “halted,” reports the Virginia Mercury. Hospitals in the state lost around $600 million between late March and late April, according to the Virginia Hospital Association.
In areas of Virginia where coronavirus was rare, the ban on elective surgery left hospitals empty and impoverished them and their employees. As Bacon observes, “The Carilion Medical Center in Roanoke is the largest hospital in Virginia west of the Blue Ridge Mountains,” with “663 beds” and an average of 40,000 patients per year. But two weeks ago, “reeling from the drastic decline in admissions caused by Governor Ralph Northam’s emergency statewide ban on elective surgery, Carilion Clinic announced a wave of furloughs, reduced hours, and pay cuts for senior administrators as the health system.” The restrictions on elective surgery weren’t needed to conserve scarce beds for coronavirus patients. “The number of COVID-19 patients at the 663-bed Carilion Medical Center Sunday night” was a mere “two.”One of the main reasons behind banning elective surgery was the misguided belief that it would “conserve” personal protective equipment needed to handle coronavirus patients. But it doesn’t even serve that purpose, because the PPE used to treat coronavirus patients is not the same as the equipment used in elective surgery. And even in areas where coronavirus is widespread, most hospitals have beds to spare and now have enough personal protective equipment (PPE) to handle coronavirus patients.