Where We Stand: Economic Impacts of COVID-19
April 20, 2020 Zoom Webinar Summary
President & CEO
Sun Corridor Inc.
President & CEO
El Rio Health
Banner – University Medicine Tucson
Eller College Economic and Business Research Center
The University of Arizona
Joe Snell introduced the panelists, provided an update on the current state of Sun Corridor Inc.’s pipeline and briefly discussed Sun Corridor Inc.’s role in the development of a recovery plan.
On the Front Lines of the Pandemic
Several of Tucson’s healthcare leaders Judy Rich, Chad Whelan and Nancy Johnson provided a unique healthcare perspective on the impacts of COVID-19.
Each healthcare leader discussed how COVID-19 had impacted their operations and their individual approaches to addressing the crisis. Each hospital was swift in their response, establishing command centers and implementing processes and procedures to keep staff protected and safe. Each CEO discussed the importance of consumers using telemedicine resources during this time. The hospitals appear to have the resources they need, for now.
One of the biggest challenges for hospitals has been the canceling of elective surgeries. There has also been a dramatic decline in volume. They are finding that people are fearful about coming to the hospital. With the right guidelines, the hospitals will resume elective surgery when the Governor allows. They will need to make sure that they have identified which surgeries to start with, what protocols they will use to determine the need for testing, and decide what physical areas they would start doing the elective procedures in.
While there have been challenges, including the sudden reallocation of resources and workforce furloughs due to loss of elective surgery business, there has also been sufficient capacity and supplies to manage COVID-19 patients. The panelists highlighted that there has been a decline in severity – the worst appears to be over and the hospitals are stable.
The chance that COVID-19 disappears entirely is low and it will be a part of our future, reiterated the panelists.
What type of data tells us when to go back to work? We should be looking at the prevalence in the population (how much of the disease is present) and the trend of that prevalence. This will be complicated by the fact that our initial testing was so limited, which will underestimate the prevalence. Other numbers to consider are hospitalization rates, rates in essential workers – again, trends will be the most important factor. Two advances in testing are being explored to make it easier to loosen restrictions. Widespread rapid antigen testing (the ability to detect the virus) will allow us to detect and quarantine a lot faster/more broadly and do effective contact tracing. Antibody testing is also getting a lot of attention. However, we do not yet know what having antibodies to the virus really tells us except that someone has been exposed, so may not prove as useful as some are hoping for.
What have been the biggest takeaways from this experience?
“We have come together in a different way because of this and that’s a good thing.” – Judy Rich
“We have to figure out how to deliver care and keep an economy going with a pandemic in our midst.” – Chad Whelan
“Never be too confident that we have the systems in place that we need to address any emerging diseases.” – Nancy Johnson
Early Picture on the Economy
George Hammond discussed the impacts of uncertainty around the outbreak’s progression in the coming months on the economy. He talked about the coming economic recovery’s dependence on controlling the outbreak. He also offered a brief overview of what we can expect from an economic downturn, including various scenarios for job losses and a potential timeframe for when we can expect to see job numbers and retail sales return to what they were pre-outbreak.
- Tucson and Phoenix economies were in good shape before the outbreak. Tucson growth was the fastest we had seen since 2006.
- The Arizona economy will suffer major downturn
- Huge job losses in near term, across all sectors
- Federal monetary and fiscal relief will help but not eliminate the downturn.
- Gradual return to growth once outbreak is contained.
- Impacts of Social Distancing have a huge impact on employment and labor market.
- There should not be too much near-term inflation risk. In the medium-term, the Federal Reserve will have to carefully remove liquidity from the banking system in order to ensure that inflation does not accelerate beyond their targets. There is some risk there, but the Fed has experience now dealing with a greatly expanded balance sheet.
- The closure of the border to non-essential crossers has had a big negative impact on retail and hospitality in the border communities, as well as impacts on Tucson and even Phoenix. The longer the closure continues the deeper and longer lasting the pain will be. Getting control of the outbreak is key to getting travel back up and running, the sooner that happens the better.
- Forecasts in progress:
- Huge job, income, and retail sales losses in Tucson and Phoenix
- Unemployment will peak well above 2008-2009 recession high
- Outbreak will result in lower population growth
- If social distancing eases in July or August, it will be late 2022 before we can return jobs and retail sales to what we saw before.