Vital Signs Fall 2021: Healthcare and Medical Office Report

VITAL SIGNS

The Healthcare Sector: Recovering, Revitalized and Resilient

In March 2020, the U.S. Department of Health and Human Services (HHS) took the extraordinary measure of requiring that all elective procedures, nationwide, be suspended so that healthcare providers could more readily focus on and treat COVID-19 patients and their emergent health conditions. This directive remained in place for nearly eight weeks, resulting in significant declines in outpatient procedures and electives. All non-life-threatening procedures were essentially suspended and deferred during these two months. As a result of the decline in procedures, both healthcare employment and spending saw their largest drops in nearly 30 years, contributing significantly to the U.S. GDP collapse, which plunged from a 5% annual rate decline in Q1 2020 to an unprecedented 31.2% annual rate decline in Q2 2020. Healthcare spending fell at a 16.2% annual rate or by $97.6 billion in Q1 2020 and then an additional 54.1% or $383 billion in Q2 2020. By far the biggest decline in healthcare spending history, it represented 30% of the entire decline in consumer spending during the first half of 2020. Spending on outpatient care (everything from doctors and dentists to home healthcare and medical labs) fell at a -8.1% annual rate in the first quarter and -61% rate in the second quarter, mirroring not only the mandated shut down, but the challenges of resuming elective cases once the order was lifted.

CONSUMER SPENDING ON HEALTHCARE SERVICES

CONSUMER SPENDING HEALTHCARE SERVICES BY MAJOR CATEGORY

1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 Millions of 2012 Dollars

0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2

Outpatient Hospital & Nursing Home

Millions of 2012 Dollars

Source: U.S. Bureau of Economic Analysis

Source: U.S. Bureau of Economic Analysis

2 | CUSHMAN & WAKEFIELD

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