More than half of 147 CFOs surveyed by Deloitte believe the U.S. will be in a recession by the end of 2020.
Eighty-eight percent of CFOs rated the North American economy “good” in the fourth quarter of 2018, but just 28 percent expected conditions to improve in 2020. Larry Summers, former U.S. Treasury Secretary, has also warned of recession twice in the past three months, Fortune reports.
What would a recession mean for healthcare? We looked back to the effects of the 2008-09 recession:
1. A recession could temporarily alleviate or delay workforce shortages. A 2011 report from The Washington Post indicated the 2008-09 recession partially addressed nurse shortages at Washington, D.C., hospitals because some retired nurses rejoined the workforce, some delayed retirement and some part-time nurses sought full-time work.
2. Underemployment and unemployment can lead to significant declines in hospital admissions and elective surgeries for commercially insured patients. A 2013 report from PwC indicated the 2008 financial collapse drove many patients to delay elective procedures, negatively affecting hospital earnings for years after the fact. In fact, the decline in commercially insured patients due to underemployment and unemployment caused the average 300-bed hospital to lose $3.7 million from 2009-11 due to declining admissions, according to a 2012 infographic from Objective Health.
3. A slowdown in healthcare spending could continue to push the industry toward outpatient care. The 2013 PwC report indicated the slow growth rate of healthcare spending post-recession continued to push care to the outpatient setting, which is more consumer-friendly and less expensive.
4. Pediatric care could be recession-proof. A 2014 report from the Health Care Cost Institute found spending on children’s healthcare services under employer-based plans grew an average of 5.5 percent from 2009-12.
5. Healthcare fundraising could decline. In 2011, an Association for Healthcare Philanthropy report indicated fundraising was starting to improve after the recession, but 71 percent of healthcare fundraisers said the recession was still having negative effects.