In the first quarter of 2020, the U.S. saw its biggest drop in gross domestic product since the last recession in 2008, and a major driving force behind that drop was a significant decline in healthcare spending.
According to the Federation of American Hospitals, which cites FTI Consulting's analysis of U.S. Bureau of Economic Analysis data, declines in healthcare spending greatly affected the estimated 4.8 percent decrease in GDP in the first quarter of this year.
The analysis found that in March 2020, the component of GDP related to hospitals fell 12.1 percent. This drop coincided with the declaration of COVID-19 as a pandemic March 13 and widespread bans on elective procedures.
"The healthcare sector is contributing half the decline of the larger recession. When you do a deep dive into the roots of the massive drop in GDP — you see a desperate trend for hospitals. The failing financial health of hospitals could have a lasting negative effect on patient care and on America's economic future," Chip Kahn, president and CEO of FAH, said in a prepared statement.