Needless Ban on Elective Surgery Shrank the Economy

by Hans Bader

The economy shrank in 2020’s first quarter by a rapid 4.8% rate. Economists say the second quarter will be far, far worse, thanks to coronavirus. The virus’s spread triggered state lockdowns closing or restricting many retail establishments. Even before the lockdowns, fear of the virus shrank sales by discouraging people from leaving home.

But that wasn’t the biggest single reason the economy shrank. No, the biggest decline was in healthcare, due to state governments’ bans on elective surgeries and other elective procedures. The healthcare sector is 18% of the economy. As University of Michigan economist Justin Wolfers notes, “Nearly half” of the shrinkage in the economy was due to “the delaying of elective procedures. It’s a strange reality that in the midst of a pandemic, we have a healthcare-led recession.” How ironic!

Statewide bans on elective surgery never made any sense. In cities and counties hit hardest by the coronavirus, it can make sense to temporarily delay elective surgeries to make beds available for coronavirus patients. But it doesn’t make sense to ban elective surgeries in a state’s other regions, where the coronavirus hasn’t really spread yet. That financially devastates hospitals. Banning most surgeries leaves hospitals without the revenue they need to operate, and forces them to lay off some of the very medical staff they may need to treat future coronavirus patients.

“Elective” surgeries are critical healthcare, and a cornerstone of the healthcare system, not needless frills. As the Bacon’s Rebellion blog notes,

Elective surgeries are not cosmetic procedures. They’re often desperately needed surgeries that can be scheduled in advance. That includes some heart procedures, joint replacements, kidney stone removals, gall bladder surgery, eye surgery and a host of other procedures designed to alleviate the pain of thousands.

In early April, researchers predicted that by “June, an estimated 60,000 family practices will close or significantly scale back, and 800,000 of their employees will be laid off, furloughed or have their hours reduced” across America, due to a “decline in elective surgeries” and “preventive care.”

Yet, states banned elective surgeries on a statewide basis. As Virginia journalist James Bacon noted, a “statewide ban on elective surgery is a sledgehammer which may be appropriate for the hardest-hit parts of the state but is wildly inappropriate for others.” In Virginia alone, more than 30,000 healthcare workers were laid off, after “elective procedures and surgeries” were “halted,” reports the Virginia Mercury. Hospitals in the state lost around $600 million between late March and late April, according to the Virginia Hospital Association.

In areas of Virginia where coronavirus was rare, the ban on elective surgery left hospitals empty and impoverished them and their employees. As Bacon observes, “The Carilion Medical Center in Roanoke is the largest hospital in Virginia west of the Blue Ridge Mountains,” with “663 beds” and an average of 40,000 patients per year. But two weeks ago, “reeling from the drastic decline in admissions caused by Governor Ralph Northam’s emergency statewide ban on elective surgery, Carilion Clinic announced a wave of furloughs, reduced hours, and pay cuts for senior administrators as the health system.” The restrictions on elective surgery weren’t needed to conserve scarce beds for coronavirus patients. “The number of COVID-19 patients at the 663-bed Carilion Medical Center Sunday night” was a mere “two.”

One of the main reasons behind banning elective surgery was the misguided belief that it would “conserve” personal protective equipment needed to handle coronavirus patients. But it doesn’t even serve that purpose, because the PPE used to treat coronavirus patients is not the same as the equipment used in elective surgery. And even in areas where coronavirus is widespread, most hospitals have beds to spare and now have enough personal protective equipment (PPE) to handle coronavirus patients.

Hans Bader is an attorney living in Northern Virginia.

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7 responses to “Needless Ban on Elective Surgery Shrank the Economy

  1. Time to fix that ingrown toenail.

    I’m gonna bet that the vaccine developers will make that shortfall in a week, oh, about 10 months from now.

  2. For once, I agree with Northam. When the outbreak first became obvious nobody knew what to do. Caution was warranted. Sick, asymptomatic patients getting elective surgery would get the health care workers sick. There weren’t enough tests (there still aren’t). There wasn’t enough PPE. We might have needed a lot more beds for COVID 19. Nobody knew.

    Northam should have reopened the hospitals to elective surgeries sooner but he was right to stop those surgeries at the outset.

    • I get your point. March was a time of tremendous uncertainty. People were worried about hospitals getting overwhelmed with COVID-19 patients. (I myself was fanning the flames of alarm). Still, instead of a blanket edict, Northam should have phased in the elective-surgery restrictions by geographic area, depending upon the level of concern. If hospitals began to fill up, it would not have been a hard thing for them to cancel or reschedule surgeries and procedures. It happens all the time in the best of times.

  3. This is really silly monday-morning quarterbacking after-the-fact.

    Never mind, that virtually every single state in the union ALSO did some version of the temporary ban.

    And nevermind the idea that if a hospital was out of Covid-19 ppe that they’d use nothing rather than elective surgery ppe.

    What kind of sense does any of this make right now?

  4. As the other commenters note, this is Monday-morning quarterbacking. Anyone following this blog in March will remember the several postings, which Jim refers to, predicting dire shortages of hospital beds. So, the virus has not spread all over the state. That likely means that the social distancing and stay-at-home orders worked. One can fault the administration in using too broad a tool and not ending the ban on elective surgeries sooner, but, in March and early April, no one knew how quickly it would spread and there was not enough time to experimental and selective.

    In addition to engaging in easy second-guessing, Bader offers faulty statistics and misquotes his sources. First, the claim that nearly half the decline in GDP was due to the ban on elective surgeries. His claim is based on a tweet by Univ. of Michigan economist Justin Wolfers. Wolfers himself followed up his original tweet with this update: “I’ve dug a bit deeper into this, and it appears that the decline in healthcare was driven somewhat more by a decline in physician services (“visiting your doctor”) than by the hospital sector.”

    Next was the claim that “60,000 family practices will close or significantly scale back, and 800,000 of their employees will be laid off, furloughed or have their hours reduced across America” due to “decline in elective surgeries” and “preventive care.” But his source did not attribute that decline to a decline in elective surgeries, but to a general decline in business. It is worth noting that the Governor’s orders closing businesses did not limit the provision of medical services, other than elective surgical procedures. Doctors’ and dentists’ offices have seen reductions in revenues and have furloughed employees or reduced hours not because of an edict from the Governor, but because people elected to stay home. Some voluntarily limited their patient traffic, for example, my dentist.

    Mr. Bader has conflated routine care in doctors’ offices with elective surgery and mistakenly blamed the ban on elective surgeries for almost half the reduction in economic activity. Even his own primary source has backed away from this original claim.

  5. re: ” Mr. Bader has conflated routine care in doctors’ offices with elective surgery and mistakenly blamed the ban on elective surgeries for almost half the reduction in economic activity. Even his own primary source has backed away from this original claim.”

    I wonder if he/others even actually separated the “bans” between rural places and urban places where the bans were actually willingly initiated by the hospitals themselves.

    Some of this stuff is just what I call “turning the crank” stuff – what they do and agree fast and loose with the facts sometimes.

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