While the coronavirus pandemic continues to disrupt America's health and finances, the Nashville Health Care Council hosted two top economists in June to discuss their expectations for the nation's economy moving forward. Council members heard perspectives from Larry Van Horn, associate professor and executive director of Health Affairs at Vanderbilt's Owen Graduate School of Management and Arthur Laffer, widely known as "the father of supply-side economics."
The pair analyzed the effect of the pandemic on healthcare businesses and emphasized their overall sunny outlook for an improving U.S. economy in the coming months.
Van Horn shared data insights revealing that outpatient volumes saw an average decline of 55 percent across the country from mid-March through May, while emergency medical care experienced anywhere from 20-50 percent in decline. He emphasized that there is a tremendous amount of variability by state - areas that were hardest-hit by the virus saw the greatest patient volume losses. However, as of early June, office visits had bounced back in many places by 30 percent. If visits continue to increase at the same rate, he says, a normal volume could be seen by the end of summer.
The pandemic is also having a dramatic effect on healthcare delivery through telehealth. Utilization of telehealth services skyrocketed from virtually no visits earlier this year to an average of one million telehealth visits per day by mid-April. Since this peak, the numbers have decreased by about 30 percent, and it remains to be seen where it will level off.
"This experience was certainly a boost for telehealth, pushing the market to adapt to the model. We expect utilization to continue at a level higher than it was pre-COVID-19," Van Horn said. "Patients have come to expect it as an option, so we will see persistent demand for telehealth over time."
Arthur Laffer has decades of experience in studying economic highs and lows, having advised many national and world leaders on economic policy since the 1980s. His take on the country's current financial position was relatively positive.
"The U.S. was well-prepared for COVID-19. We had the right healthcare provisions in place, in addition to a great economic position. The initial hit was less than people thought it was going to be. Hospitals have done great work to tackle the learning curve, and they are much better prepared now to treat coronavirus patients than they were just a few months ago," Laffer said.
Laffer pointed out that the stock market has been creeping up since it crashed in mid-March. While some industries such as cruises, airlines and commercial real estate will take a while to recover, he believes most industries will bounce back quickly.
As for the future of the healthcare system, both speakers emphasized pricing transparency as a solution that will drive costs down and make people healthier, which is needed more than ever as 30 million more people are at risk of losing their health insurance alongside their jobs due to the economic downturn.
"There are some benefits to downturns," Laffer said. "They lead to 'creative destruction,' a concept coined by economist Joseph Schumpeter. Basically, it causes the market to do-away with long-standing practices that don't work anymore to make way for innovation. These events can lead to stronger and more creative companies emerging for an even greater comeback in the years to come."
This virtual event was held as part of a series of in-depth conversations hosted by the Nashville Health Care Council for its members. Like other organizations, the Council is creatively shifting to meet the needs of its members in safe and productive ways. While in-person events are postponed for now due to social distancing guidelines, the Council is offering a variety of new ways for members to learn and engage through virtual opportunities.
Katie Schlacter is founder and principal of Schlacter Consulting, a strategic communications company serving the healthcare industry, start-ups and non-profits. Schlacter has more than 15 years of experience working with healthcare CEOs and executives. For more information, go to schlacterconsulting.com.