As non-essential businesses begin to reopen, there’s no guarantee that merely opening the doors will make customers return. A recent Morning Consult poll provides an assessment of the impact of COVID-19 on consumer confidence: fewer than one in five US adults are currently comfortable doing (formerly) everyday activities like eating at a restaurant or going to a shopping mall.
The graphic below provides similar data for healthcare. Consumers’ willingness to visit healthcare providers in person for non-COVID care is only slightly better, at 21 percent. Which providers might see patients return most quickly?
Consumers say they are about twice as likely to visit their primary care doctor’s office than other healthcare facilities, including hospitals, specialists, and walk-in clinics. And when it comes to scheduling a routine in-office visit, nearly half say they will wait two to six months, with almost one in ten not comfortable going to a doctor’s office in person for a year or more.
Healthcare facilities face an uphill battle in bringing back patients—many of whom have ongoing chronic diseases that necessitate care now. Reaching patients through telemedicine and providing concrete messages about how they can safely see their doctor will be critical to staving off a tide of disease exacerbations that will mount as fear delays much-needed care.
Healthcare lost 1.4 million jobs in April amid the COVID-19 pandemic, primarily in ambulatory healthcare services, according to the latest jobs report from the U.S. Bureau of Labor Statistics.
The April count compares to 43,000 healthcare jobs lost in March.
Within ambulatory healthcare services, April job losses included offices of dentists (503,300), offices of physicians (243,300), and offices of other healthcare practitioners (205,100).
Hospitals lost 134,900 jobs last month, compared to the 200 positions they added to the U.S. economy in March.
The April jobs report marks the second consecutive month that healthcare employment did not grow. In the 12 months prior to March — the month the World Health Organization declared the COVID-19 spread a pandemic — industry employment had grown by 374,000, according to the bureau.
Bloomberg reported the number of healthcare workers has doubled to 16 million in the last three decades, and until March, the industry has lost jobs in only four months during that period.
Overall, the U.S. lost 20.5 million jobs in April, and the unemployment rate reached 14.7 percent, the highest since the Great Depression, according to the bureau.
The unemployment rate does not reflect Americans still working who have had their hours or pay reduced, The New York Times noted.
YEAR-OVER-YEAR CHANGE IN STATE TAX REVENUES
April 2020 vs. April 2019, select states
Early numbers show how significantly the coronavirus is devastating states’ revenue streams — and could force choices between raising taxes or gutting services and laying off public employees.
Why it matters: Even as some states move toward reopening, the economic ramifications of having shut down will haunt them far into the future.
What to watch: Sens. Bob Menendez (D-N.J.) and Bill Cassidy (R-La.) plan to introduce bipartisan legislation as soon as next week that would create a $500 billion fund designed to help struggling state and municipality budgets in the wake of COVID-19.
By the numbers: The Urban Institute has been compiling lost revenue data as states make it publicly available. So far, there are figures for about one in four states that compare this April’s state income and sales tax revenue collections against those from April 2019.
The big picture: Democratic-leaning cities have seen the highest case and death rates. But red and blue states alike are facing serious budget shortfalls.
Between the lines: Much of the burden will likely be pushed on struggling local governments’ plates, White said.
Some state and local governments will wait to make tough budget decisions in the hopes that they get needed funds from Congress, which is in heated negotiations around the fourth stimulus package.
Republican lawmakers have been hesitant to provide this much federal help to states, but they’ve been warming to the idea.
Attorney General Bill Barr had urged the White House to soften its attack on the law during the pandemic.
President Donald Trump on Wednesday said his administration will urge the Supreme Court to overturn Obamacare, maintaining its all-out legal assault on the health care law amid a pandemic that will drive millions of more Americans to depend on its coverage.
The administration appears to be doubling down on its legal strategy, even after Attorney General William Barr this week warned top Trump officials about the political ramifications of undermining the health care safety net during the coronavirus emergency.
Democrats two years ago took back the House of Representatives and statehouses across the country by promising to defend Obamacare, in particular its insurance protections that prevent sick people from being denied coverage or charged more because of a health condition. The issue may prove to be even more salient in November amid the Covid-19 outbreak that health experts believe will persist through the fall.
The Justice Department had a Wednesday deadline to change its position in a case brought by Republican-led states, but Trump told reporters Wednesday afternoon his administration would stand firm. DOJ declined to comment.
“Obamacare is a disaster, but we’ve made it barely acceptable,” Trump said.
The Supreme Court later this fall will hear a lawsuit from the GOP-led states that argue the Affordable Care Act was rendered invalid after Congress eliminated its tax penalty for not having health insurance. A coalition of Democratic state attorneys general and the Democratic-led House of Representatives are defending the law in court.
The Trump administration had previously shifted its legal position in this case, but appears to have decided against doing so again. DOJ originally argued the courts should throw out just Obamacare’s preexisting condition protections, before last year urging that the entire law be struck down.
The Supreme Court is expected to hear the case during its next term starting in October, but it hasn’t scheduled arguments yet. A decision is unlikely before the Nov. 3 election. The court has previously upheld Obamacare in two major challenges that threatened the law’s survival.
About 20 million people have been covered by Obamacare, and the law is expected to provide a major safety net during the economic freefall brought on by the coronavirus. Millions more are expected to join the Medicaid rolls, especially in states that joined Obamacare’s expansion to poor adults. Others who lost workplace health insurance can sign up on the law’s health insurance marketplaces, though the Trump administration isn’t doing much to advertise coverage options.
House Democrats in a filing to the Supreme Court on Wednesday said the pandemic showcased why justices should preserve the law.
“Although Congress may not have enacted the ACA with the specific purpose of combatting a pandemic, the nation’s current public-health emergency has made it impossible to deny that broad access to affordable health care is not just a life-or death matter for millions of Americans, but an indispensable precondition to the social intercourse on which our security, welfare, and liberty ultimately depend,” their brief read.
Obamacare has grown more popular since the GOP’s failed repeal bid during Trump’s first year in office, though the law is still broadly disliked by Republicans. Many Democrats are eager to again run on their defense of Obamacare this fall. That includes presumptive presidential nominee Joe Biden, who has advocated for building on the health care law rather than pursuing a comprehensive progressive overhaul like “Medicare for All.”
Top Trump officials have long been split on the legal strategy in the Obamacare lawsuit. Barr and Alex Azar, the Health and Human Services secretary, both opposed a broader attack on the law, but White House officials have been more supportive, seeing it as a chance to fulfill Trump’s pledge to repeal Obamacare. Barr, in a Monday meeting with Vice President Mike Pence and other White House officials, made an eleventh-hour plea for the administration to soften its legal stance ahead of the Supreme Court’s briefing deadline.
Like a global tsunami, the coronavirus pandemic has caused a huge loss of life and taken a massive economic toll.
In the US economy, skyrocketing unemployment is the most-visible sign of the devastation: almost overnight, at least 30 million workers lost their jobs.
The April employment report, due out Friday, is expected to show the jobless rate soaring into double digits, perhaps as high as 20 percent, far surpassing the worst of the global financial crisis and reaching levels not seen since the Great Depression last century.
The US government and central bank worked at a stunning pace to rush out aid and financing to workers and businesses to try to prevent a complete economic collapse, but there is a growing fear that the temporary shutdowns imposed to contain the spread of the virus will become permanent for many companies.
The coronavirus has infected nearly 1.2 million people in the United States and killed around 70,000, according to a count from Johns Hopkins University, and analysts fear some of the economic damage may be permanent.
“We took the elevator down, but we’re going to need to take the stairs back up,” Tom Barkin, president of the Federal Reserve Bank of Richmond, said in a recent speech.
Despite nearly $3 trillion in financial aid approved by Congress in March alone and trillions more in liquidity provided by the Federal Reserve, the US economy contracted by 4.8 percent in the first three months of the year — a period that included only a couple of weeks of the strict business shutdowns.
The second quarter could see the economy plunge by twice that amount.
– The worst is yet to come –
The data on the jobs market has become so bad so fast that there are no comparisons.
Statisticians in the Labor Department’s Bureau of Labor Statistics (BLS), which produces the monthly unemployment report, are using natural disasters as a point of reference.
“The closest that we have in terms of what was in our playbook has been usually hurricanes, because they tend to be large and impact significant periods of time, or areas,” BLS Associate Commissioner Julie Hatch Maxfield told AFP.
But even devastating events, like Hurricane Katrina in 2005, were regional — not national and certainly not global.
The job losses spread from airlines and hotels to restaurants and factories as states ordered lockdowns and then closed schools, sending initial claims for unemployment insurance surging from mid-March, with 20 million posted in the four weeks of April alone.
But those figures could underestimate the true size of the shock, since many people have not been able to file for benefits, and others do not qualify.
The official unemployment rate in March jumped from a historic low of 3.5 percent to 4.4 percent, with 701,000 jobs lost.
But the monthly data, which are separate from the jobless claims reports, are calculated only during the pay period that includes the 12th day of each month, so they too missed the real picture. BLS said the survey of households likely underestimated the jobless rate, which should have been 5.4 percent.
April will be far worse, with some economists projecting jobs losses at 28 million and a 17 percent unemployment rate. And as more businesses report their data, job losses in March are expected to be revised higher as well.
Employment in the private sector alone collapsed 20.2 million last month, US payroll services firm ADP said Wednesday. But ADP acknowledges the data do not present the complete picture.
“Job losses of this scale are unprecedented. The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession,” said Ahu Yildirmaz, co-head of the ADP Research Institute.
– False rebound, slow comeback –
Job losses during the global financial crisis in 2008 and 2009 totaled 8.6 million and the unemployment rate peaked at 10 percent.
Even among workers who are still employed, many have seen their hours cut.
“It’s now clear the economy was in a downdraft much more rapidly than anyone expected,” Diane Swonk, chief economist at Grant Thornton, told AFP.
The expansive government aid programs mean the US might see a temporary pickup in hiring in May and June, Swonk said.
But if small businesses aren’t fully back to normal by July, which depends on consumers feeling safe enough to go back to restaurants and shops, “they’re going to have to lay them off again,” she said.
The coronavirus pandemic is lasting longer than Congress and the White House anticipated when it committed hundreds of billions of dollars to individuals and small businesses, Axios’ Dan Primack and Alayna Treene report.
Why it matters: These bailouts were meant to stop the bleeding, to buy time while the wound cauterizes. Unfortunately, the injury was more severe than originally diagnosed.
Treasury Secretary Steve Mnuchin told CBS that “the entire package provides economic relief overall for about 10 weeks.”
Paycheck Protection Program (PPP) loans require that small businesses maintain staffing levels for eight weeks. For early recipients, that means their payroll obligations could run out by month’s end.
All of this makes economic reopening even more complicated.
The bottom line: The small business loans and individual checks were designed as bridges to reopening, but if they only delayed layoffs and economic pain by a couple of months, then they may end up being remembered as bridges to nowhere.
People losing their employer-based health insurance in the coronavirus economy would find a pretty stable Affordable Care Act market if they need it — not that the Trump administration is advertising that fact, Bob writes.
Why it matters: ACA plans will be an important backstop for some newly uninsured people, many of whom could likely find affordable coverage on the law’s insurance marketplaces.
Where it stands: The average monthly premium for ACA coverage was down 3% in this year’s enrollment period, compared with 2019, according to a federal report that was released earlier this month but not publicly promoted.
Yes, but: You won’t hear much about those options from the Trump administration, which has been consistently hostile to the ACA and has declined to open up a special enrollment window that would let anyone who has been disrupted by the economic shutdown to buy coverage.
It feels like some big, terrible switch got flipped when the coronavirus upended our lives — so it’s natural to want to simply flip it back. But that is not how the return to normalcy will go.
The big picture: Even as the number of illnesses and deaths in the U.S. start to fall, and we start to think about leaving the house again, the way forward will likely be slow and uneven. This may feel like it all happened suddenly, but it won’t end that way.
What’s next: Nationally, the number of coronavirus deaths in the U.S. is projected to hit its peak within the next few days. But many big cities will see their own peaks significantly later — for them, the worst is yet to come.
The future will come in waves — waves of recovery, waves of more bad news, and waves of returning to some semblance of normal life.
What the post-lockdown world will look like:
And there will be more waves of infection, even in areas that have passed their peaks.
This is all but inevitable in the U.S., too, especially as travel begins to pick back up. Some places may need to shut down again, or at least tighten back up, if these new flare-ups are bad enough.
What we’re watching: We’ll still need a lot more diagnostic testing to make this process work. Public health officials need to be able to identify people who might be spreading the virus before they begin to feel sick, and then identify the people they may have infected.
The real turning point won’t come until there’s a proven, widely available treatment or, even better, a widely available vaccine.
The bottom line: “I’m not going back to Disneyland, I’m not going to take a cruise again, until we have a very aggressive testing system or we have very effective therapeutics or a vaccine,” Gottlieb said.