COVID-19 and for-profit health care

The likely impact on the sector is becoming clearer. It won’t be pretty.

So what do we now know? We know that operators, whose main business lines are discretionary and elective, have seen business crash. Demand for cosmetic surgery, dentistry and ophthalmology will have collapsed almost completely. Routine elective work such as general dentistry and joint replacements will also probably be reduced to near zero in lockdown. The Spanish private hospital association, Alianza de la Sanidad Privada Española (ASPE), has told El Pais that non-Covid related activity in its members has dropped by 80%. 

Much for-profit hospital capacity is being moved to Covid readiness. The nature of the deal here varies from country to country. We hear of quasi nationalisation in Spain and of politicians in the UK saying that Covid work will be done “at cost” in the UK. The picture may be better in Germany.

But so far the switch to Covid capacity is not being used in private hospitals outside of Italy and Spain. Wards have been switched but are empty as peak demand has not yet hit.

Much hangs on payment terms. Medicover and Terveystalo have warned that profitability will fall but much of what they do are subscription-funded services and may be protected in a way that elective hospitals are not.

Are there any silver linings? It is noticeable that UK negotiations with private hospital groups were centralised, rather than conducted through 200+ local NHS Central Commissioning Groups. That feels like progress. And after years of faffing about, publicly funded family doctors have switched in two weeks to telehealth.

And we should see a huge, but very hard-to-service, spike in demand for all kinds of elective procedures when Covid finally passes.

And the future? In The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb, the author relates how when the civil war started in the Lebanon, he, as a teenager from a privileged background, asked many adults close to the government when the shooting would stop. All explained (at length) why it would be over in a few weeks. The only one to get it right was his grandfather’s chaffeur who shrugged his shoulders and said “Only God knows.”

The same applies here. So-called experts don’t know. We will only know the answer when mass antibody testing can give us real infection rates and so more accurate rates. We could be in shut down for 3 months. Or 12. Pick your preferred expert and hope the virus doesn’t mutate. God knows.

We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.